Sat, Jan 22, 2022 @ 15:06 GMT
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Asian Market Update: China Services PMI Prints 4-Month Low

China Services PMI prints 4-month low

Asia Mid-Session Market Update: China Services PMI prints 4-month low; Hong Kong PMI contraction deepens

US Session Highlights

(RU) Russia Energy Min Novak: too soon to say if a global deal on oil output cuts will be extended

(US) INITIAL JOBLESS CLAIMS: 223K V 245KE (lowest since Mar 1973); CONTINUING CLAIMS: 2.07M V 2.06ME

(US) CNBC’s Harwood: Treasury Sec Mnuchin said to have told Senate Banking Republicans that he opposes border adjustment tax

(US) Feb ISM New York: 51.3 v 57.7 prior

(US) WEEKLY EIA NATURAL GAS INVENTORIES: +7 BCF VS. -3 TO -5 BCF EXPECTED RANGE

(US) Fed’s Powell (moderate, voter): Rate hike in March is on table for discussion

US markets on close: Dow -0.5%, S&P500 -0.6%, Nasdaq -0.7%

Best Sector in S&P500: Utilities

Worst Sector in S&P500: Financials

Biggest gainers: MNST +12.8%, BBY +6.4%, URBN +5.7%, GPS +3.3%, AES +2.5%

Biggest losers: FCX -4.9%, KR -4.3%, CAT -4.3%, ENDP -4.1%, MUR -3.9%

At the close: VIX 11.8 (-0.7pts); Treasuries: 2-yr 1.31% (+2bps), 10-yr 2.49% (+3bp), 30-yr 3.08% (+1bps)

US movers afterhours

HABT: Reports Q4 $0.07 v $0.04e, R$73.9M v $73.3Me; Guides initial FY17 R$338-342M v $338Me; SSS +2%; Capex $44-47M; +10.9% afterhours

GWRE: Reports Q2 $0.28 v $0.14e, R$115.6M v $110Me; Guides Q3 -$0.05 to -$0.02 v +$0.09e, R$102-106M v $111Me; +2.4% afterhours

MRVL: Reports Q4 $0.22 v $0.19e, R$571M v $571Me; +2.0% afterhours

ADSK: Reports Q4 -$0.28 v -$0.33e, R$479M v $473Me; -1.4% afterhours

COST: Reports Q2 $1.17 v $1.35e, R$29.1B v $30.0Be; To increase membership fees by $5; -4.3% afterhours

WING: Reports Q4 $0.15 v $0.14e, R$24.8M v $24.9Me; -6.8% afterhours

AOBC: Reports Q3 $0.66 v $0.54e, R$233.5M v $234Me; Guides Q4 adj EPS $0.32-0.42 v $0.56e, R$200-220M v $242Me; -7.0% afterhours

BBG: Reports Q4 -$0.18 adj v -$0.12e, R$51.6M v $63.6Me- Guides initial FY17 production 6.0-6.5 MMboe; Guides initial FY17 capex $255-285M; -10.3% afterhours

NTNX: Reports Q2 -$0.28 v -$0.35e, R$182.2M v $179Me; Guides Q3 -$0.48 to -$0.45 v -$0.34e, R$180-190M v $187Me, gross margin 57-58%; -13.8% afterhours

KPTI: Interim Analysis of Phase 2 SOPRA study evaluating Selinexor in Relapsed/Refractory Acute Myeloid Leukemia determines SOPRA will not reach statistical significance for overall survival (OS); -15.1% afterhours

SCYX: Delays initiation of new clinical studies using the IV formulation of SCY-078 at FDA’s request; Ongoing and future clinical development using the oral formulation of SCY-078 are unaffected; -26.6% afterhours

Politics

(US) President Trump: has ‘total confidence’ in Attorney General Sessions – press

(US) Attorney General Sessions: To recuse himself from any investigations related to the Trump campaign

(US) AG Sessions: Talked with US ambassador about a number of issues, including Ukraine; Did not discuss Trump campaign – Fox interview

Asia Key economic data

(CN) CHINA FEB CAIXIN PMI SERVICES: 52.6 V 53.1 PRIOR; 4-month low

(JP) JAPAN FEB SERVICES PMI: 51.3 V 51.9 PRIOR; COMPOSITE PMI: 52.2 v 52.3 PRIOR

(JP) JAPAN FEB TOKYO CPI Y/Y: -0.3% V -0.1%E; CPI EX-FRESH FOOD Y/Y: -0.3% V -0.2%E

(JP) JAPAN JAN NATIONAL CPI Y/Y: 0.4% V 0.4%E; CPI EX FRESH FOOD (CORE) Y/Y: 0.1% V 0.0%E

(JP) JAPAN JAN JOBLESS RATE: 3.0% V 3.0%E

(JP) JAPAN JAN OVERALL HOUSEHOLD SPENDING Y/Y: -1.2% V -0.4%E

(HK) HONG KONG FEB COMPOSITE PMI:49.6 V 49.9 PRIOR; 2nd month of contraction

(SG) SINGAPORE FEB PMI COMPOSITE: 51.4 V 51.6 PRIOR

(KR) SOUTH KOREA FEB CPI M/M: 0.3% V 0.1%E; Y/Y: 1.9% V 1.8%E

(KR) SOUTH KOREA FEB CURRENT ACCOUNT BALANCE: $5.3B V $7.9B PRIOR; GOODS BALANCE: $7.8B V $9.4B PRIOR

Asia Session Notable Observations, Speakers and Press

Asia indices are down heading into the weekend, tracking far more restrained sentiment on Wall St after an outsized rally in the wake of Pres Trump’s Congressional address. Concerns over valuations, building expectations of March Fed hike, and political controversy in the White House are being attributed for the decline, as Financials and Materials sold off the most heavily while Utilities rallied. Regionally, ASX200 was pulled lower by mining shares, with Dalian Iron Ore down notably and HSBC warning of potential "massive fall" in the metal. In FX space, USD/JPY and NZD/USD saw more pronounced declines on risk aversion, falling 40 and 35 pips from session highs respectively.

Japan CPI data were mixed, as headline nationwide print ticked up higher while forward looking Tokyo-region dipped deeper in the red. In its regular QE operations, BOJ also pulled back on the purchases of long bonds in an effort to steepen the curve.

In China, Feb Caixin Services PMI slowed to a 4-month low, even as overall Composite improved and composite Employment component rose for the first time in nearly 2 years. Economists noted a rise in new orders along with a sharp rise in input costs in Feb, while the Outlook anticipates growth momentum in Q1 before some slowing in Q2. Hong Kong PMI saw its 2nd straight month of contraction amid receding inflation, biggest contraction in new orders in a year, and rising inventories. Note that China’s annual National People’s Congress (NPC) begins on Sunday with anticipated announcement of 2017 economic targets.

China

(CN) Hangzhou City to further restrict housing purchase to curb property market – Xinhua

(CN) China govt urged to offer a preferential rate to small home buyers – Chinese press

(CN) PwC annual CEO survey: 33% of mainland China execs are "very confident" about their 12-month outlook for op income v 25% y/y – Chinese press

Japan

(JP) Japan Fin Min Aso: to determine contents of US-Japan economic dialogue

(JP) Japan Defense Ministry scrambled its fighter jets after about 13 China airplanes were seen flying through Miyako Strait between Japan’s southern islands of Okinawa and Miyako – Nikkei

Australia

HSBC: Iron ore prices are set for a "massive fall" – SMH

(AU) OECD: Australia housing market could "develop into a rout" – Australian press

Asian Equity Indices/Futures (00:00ET)

Nikkei -0.7%, Hang Seng -0.7%, Shanghai Composite -0.4%, ASX200 -0.8%, Kospi -1.3%

Equity Futures: S&P500 -0.3%; Nasdaq -0.3%; Dax -0.3%; FTSE100 -0.3%

FX ranges/Commodities/Fixed Income (00:00ET)

EUR 1.0500-1.0525; JPY 114.05-114.45; AUD 0.7545-0.7575; NZD 0.7030-0.7065

Apr Gold +0.1% at $1,234/oz; Apr Crude Oil +0.1% at $52.67/brl; May Copper -0.1% at $2.68/lb

GLD SPDR Gold Trust ETF daily holdings rise 1.8 tonnes to 845.3 tonnes; 2nd straight increase

(CN) PBOC SETS YUAN MID POINT AT 6.8896 V 6.8809 PRIOR; 3rd straight weaker setting; weakest Yuan setting since Feb 13th

(CN) PBOC to inject combined CNY30B v CNY30B prior in 7-day, 14-day and 28-day reverse repos

(AU) Australia MoF (AOFM) sells A$800M in 1.75% 2020 Bonds; avg yield: 2.1076%; bid-to-cover: 5.16x

(JP) BOJ To buy ¥100B in JGBs with maturity over 25-yr (down from ¥120B)

Asia equities/Notables/movers by sector

Consumer discretionary: 9983.JP Fast Retailing +2.0% (Feb Uniqlo SSS); 2685.JP Adastria Holdings Co -1.8% (Feb SSS)

Financials: 337.HK Greenland Hong Kong +3.4% (profit alert); BOQ.AU Bank of Queensland -3.1% (JPMorgan cuts rating); AFG.AU Allco Finance -2.0% (CEO steps down); MPL.AU Medibank -3.1% (Macquarie cuts rating)

Industrials: 6104.JP Toshiba Machine Co +4.9%; 1802.JP Obayashi Corp -4.3% (Credit Suisse cuts rating)

Technology: 300104.CN Leshi Internet Info & Tech Co Beijing -4.9% (easing short-term funding pressure, to exit India); 002465.CN Guangzhou Haige Communications Group Inc Co +2.9% (approval for new shares)

Materials: WGX.AU Westgold Resources -1.2% (Bell Potter cuts rating); FMG.AU Fortescue Metals Group -5.4% (iron ore price may face massive fall)

Energy: RIL.IN Reliance Industries +2.4% (Ruffer raises stake)

Healthcare: 9627.JP Ain Pharmacie -1.6% (9-month result); 4694.JP BML -3.0%, 6849.JPNihon Kohden Corp -1.7% (Jefferies cuts rating)

Telecom: NTC.AU Netcomm Wireless -6.0% (Canaccord Genuity Cuts rating)

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