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Oil Futures Rose Over 4%

General Trend:

  • Equity futures pare declines as no military response has been seen as of yet from the US related to Iran; US President Trump said ‘all is well’ as he suggested that the Iranian attacks did not lead to US casualties thus far
  • Trump also said he will make a statement on Wednesday morning
  • Iran’s Foreign Minister said Iran took and concluded ‘proportionate’ measures in self-defense, does not seek war escalation but Iran will defend itself
  • Samsung rises as Q4 Op profit beat ests
  • Energy shares rise in Asia on the jump in oil prices while airlines trade lower
  • Aussie gold miners gain as gold rose to multi-year high above $1,600/oz
  • Japanese equities underperform, trade-sensitive TOPIX Marine/Transportation index drops over 3%
  • South Korea’s Fin Min suggested it is too early to determine if ‘sharp’ moves in the Korean Won (KRW) are related to Middle East concerns.

Headlines/Economic Data

Australia/New Zealand

  • ASX 200 opened 0.0%
  • (AU) AUSTRALIA NOV BUILDING APPROVALS M/M: +11.8% V +2.0%E; Y/Y: -3.8% V -11.7%E
  • (AU) Australia Dec AIG Performance of Construction Index: 38.9 v 40.0 prior
  • SIG.AU CFO Iona Macpherson resigns by mutual agreement, effective today; appoints Jeff Sells interim CFO
  • CTX.AU Confirms has an approach from parties including EG Group, have not had any proposals since Alimentation Couche-Tard proposals
  • (NZ) Fonterra Global Dairy Trade Auction Dairy Trade price index: +2.8% v -5.1% prior

Japan

  • Nikkei 225 opened -1.5%
  • (JP) JAPAN NOV LABOR CASH EARNINGS Y/Y: -0.2% V -0.1%E; REAL CASH EARNINGS Y/Y: -0.9% V -0.7%E
  • (JP) Japan PM Abe cancels trip to Middle East scheduled for this weekend
  • (JP) JAPAN DEC CONSUMER CONFIDENCE INDEX: 39.1 V 39.5E

Korea

  • Kospi opened -0.9%
  • (KR) South Korea Fin Min: Will spend 62% of FY20 fiscal budget in H1 in order to support growth
  • 005930.KR Reports prelim Q4 (KRW) Op 7.1T v 6.5Te, Rev 59.0T v 60.9Te; Co-CEO Kim: memory chip market is recovering – Korean press

China/Hong Kong

  • Hang Seng opened -1.1%; Shanghai Composite opened -0.3%
  • (CN) China PBoC Open Market Operation (OMO): Skips reverse repos for the 12th consecutive session; Net drain CNY0B v drain CNY0B prior
  • (CN) China PBOC sets Yuan Reference Rate: 6.9450 v 6.9690 prior (strongest fix since early Aug)
  • (CH) CHINA DEC FOREIGN RESERVES: $3.108T V $3.110TE (6-month high)
  • (CN) China Communist Party issued new rules for state owned enterprises (SOEs), giving it greater control; companies must now integrate party leadership into every part of operations – press

Other

  • (IR) Iran confirms it has started attack on Iraq air base hosting US troops – local TV; 90 minutes later another local TV station reported that Iran was launching second wave of attacks on US bases
  • (US) US Official: Iran fired 15 rockets and missed 4 targets; there were very few if any casualties
  • (IR) Iran said to be planning to de-escalate if the US does not retaliate – local press
  • (IR) Iran Foreign Minister Zarif: Iran took and concluded ‘proportionate’ measures in self-defense; Iran does not seek war escalation, will defend ourselves
  • (IR) Iran Pres Advisor: Any military action by US will be met with all out war in the region
  • (TH) Thailand Commerce Min: Concerned about possible chances of being added to US Treasury watchlist of currency manipulators but impact would be limited

North America

  • (US) Weekly API Oil Inventories: -5.9M v -7.8M prior
  • (US) President Trump: All is well! Missiles launched from Iran at two military bases located in Iraq. Assessment of casualties & damages taking place now. So far, so good! We have the most powerful and well equipped military anywhere in the world, by far! I will be making a statement tomorrow morning. – twitter
  • BA Boeing 737 passenger plane crashes after takeoff in Iran due to technical issue – Iran press

Europe

  • (AE) UAE Energy Min Al Mazrouei: Not forecasting shortage of oil supply

Levels as of 12:15ET

  • Hang Seng -0.9%; Shanghai Composite -0.8%; Kospi -0.7%; Nikkei225 -1.5%; ASX 200 -0.1%
  • Equity Futures: S&P500 -0.3%; Nasdaq100 -0.4%, Dax -0.4%; FTSE100 -0.4%
  • EUR 1.1169-1.1145; JPY 108.53-107.64; AUD 0.6884-0.6849; NZD 0.6652-0.6617
  • Commodity Futures: Gold +1.3% at $1,594/oz; Crude Oil +1.3% at $63.49/brl; Copper +0.1% at $2.79/lb
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