General Trend:
- Shanghai Composite rises in early trading as Consumer Discretionary and Financial shares gain
- Financials are among the gainers in Hong Kong
- Health-care related companies trade generally higher in HK and Shanghai amid recently reported virus outbreak in Wuhan (China)
- Geely rises over 1%, Dec vehicle sales +39% y/y
- China Merchants Land rises over 9% in HK, guided its FY results to increase ‘substantially’
- Securities and Electric Appliance companies are among the gainers in Japan
- Consumer, Telecom and Financial shares are among the gainers in Australia
- Analysts comment on the possible impact of Australian bushfires on economic growth
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.1%
- (AU) Australia Dec ANZ Job Advertisements M/M: -6.7% v -1.8% prior
- PNV.AU Updates: Dec was the company’s first A$2.0M month; Reports prelim H1 Rev A$8.6M v A$3.8M y/y
- (AU) Australia Treasurer Frydenberg: 8,500 claims worth A$700M have been filed related to bushfires since Sept
Japan
- Nikkei 225 opened +0.5%
- (JP) Japan Fin Min Aso: Clear signs that global economy is slowing, solid domestic demand is supporting Japan’s economy
- (JP) Japan Dec Final PMI Services: 49.4 v 50.6 prelim (fastest contraction in 3 years, lowest level since Sept 2016); PMI Composite: 48.6 v 49.8 prelim (3rd consecutive contraction, lowest reading since April 2014)
- 7965.JP Largest shareholder Great Fortune International Development may make an “important” proposal to management (+13%)
- (JP) Japan Economy Min Nishimura: Reiterates speculative moves in financial markets not reflecting fundamentals are not desirable
- (JP) Japan MoF sells ¥2.1T v ¥2.1T indicated in 0.1% 10-year JGBs: avg yield: -0.0050% v -0.042% prior, bid to cover 3.70x v 3.28x prior
Korea
- Kospi opened +0.5%
- (KR) South Korea Vice Fin Min Kim: No direct impact expected on South Korea crude oil imports due to situation in middle east; will closely monitor financial and the currency markets and will take bold measures to stabilize the markets if volatility rises
- (KR) South Korea ambassador asks US President Trump to continue to show leadership on North Korea nuclear issue – Yonhap
- (KR) South Korea President Moon: See clear signs job market is recovering – New years address
China/Hong Kong
- Hang Seng opened +0.5%; Shanghai Composite opened +0.1%
- (CN) China State Taxation Administration: Will make larger effort to further optimize the tax business environment, improve tax administration efficiency, and deepen international tax cooperation; 2019 tax and fee cuts totaled CNY2.0T, 2% of GDP and contributed 0.8% to GDP – Xinhua
- (CN) China State Administration of Foreign Exchange (SAFE): China will “steadily and prudently” diversify its $3.1T foreign exchange reserve holdings; This suggests there could be a change to the way China manages its holdings; this is also the first time SAFE has called for “prudence” in diversifying China’s reserve assets – SCMP
- (CN) China Banking and Insurance Regulatory Commission (CBIRC): Will promote the conversion of household savings into long term capital market fund – guidelines issued
- (CN) China PBOC sets Yuan Reference Rate: 6.9690 v 6.9718 prior
- (CN) China PBoC Open Market Operation (OMO): Skips reverse repos for the 11th consecutive session; Net drain CNY0B v drain CNY50B prior
- (CN) China President Xi: China is confident of better development in 2020 – Xinhua
- (CN) China Vice Agriculture Min: China will not increase annual grain import quotas to accommodate higher US farm purchases
- (HK) Hong Kong Chief Exec Lam: Economic recession in 2020 is expected to be more severe with rising jobless rates, and some businesses are expected to shut down after the Lunar New Year; Will increase monitoring of pneumonia cases
Other
- (US) Defense Sec Esper: US will follow the laws of armed conflict.
- Following the comments from Esper, it was reported in the financial press that the US Pentagon contradicted Trump and said the US won’t strike cultural sites related to Iran.
- On Monday (Jan 6th), White House aide Conway said Trump did not say he’s targeting cultural sites, but he was openly asking a question.
- (IQ) Follow Up: US administration said to have started drafting sanctions on Iran (in line with comments); Treasury Department and White House would likely play a lead role if the sanctions are ultimately implemented – Washington Post
- (SA) Saudi Arabia Vice Defense Min: Discussed cooperation with US Defense Sec Esper
- (IR) Iran Supreme Leader Khamenei: Any attack must be direct and proportional attack on American interests, openly carried out by Iran security forces press citing National Security Council Meeting
North America
- BA Details in memo plan to suspend 737 MAX production in mid-Jan; about 3,000 employees will be affected – press
Europe
- (UK) Chancellor of the Exchequer Javid: March 11th will release budget; it will seize opportunities of Brexit, will unleash a decade of renewal; will make good on pledges to cut taxes
Levels as of 12:15ET
- Hang Seng +0.5%; Shanghai Composite +0.4%; Kospi +1.0%; Nikkei225 +1.5%; ASX 200 +1.4%
- Equity Futures: S&P500 +0.2%; Nasdaq100 +0.4%, Dax +0.4%; FTSE100 +0.4%
- EUR 1.1198-1.1188; JPY 108.50-108.31; AUD 0.6944-0.6926; NZD 0.6680-0.6659
- Commodity Futures: Gold -0.4% at $1,562/oz; Crude Oil -1.0% at $62.63/brl; Copper +0.3% at $2.79/lb
