General trend
- KRW declines, SK FX reserves dropped for the first time in 5 months.
- Commodity currencies trade lower.
- WTI Crude pared gains following reports of additional US omicron cases [later rebounded]; US equity FUTs also reversed gains.
- Modest equity moves have been seen in Asia.
- Hang Seng extended decline; TECH index dropped >2% amid DiDi’s comments on delisting, US SEC news; HK property sector in focus; Kaisa Group’s debt exchange failed; Debt concerns also weigh on Aoyuan Property.
- Nikkei has traded slightly higher; Index heavyweights decline [Fast Retailing drops after monthly sales figures; Softbank Group extends decline].
- Shanghai Composite ended morning trading higher (+0.6%).
- S&P ASX 200 pared gain.
- Musk continues to sell Tesla shares.
- Companies due to report during the NY morning include Big Lots, BMO, Genesco, Hibbett.
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened flat.
- (AU) Australia Nov Final PMI Services: 55.7 v 55.0 prelim (confirms 2nd consecutive expansion and highest since June).
- (AU) Australia sells A$1.5B v A$1.5B indicated in 2.75% Apr 2024 bonds, Avg Yield: 0.6718%, bid-to- cover 2.59x.
Japan
- Nikkei 225 opened +0.3%.
- (JP) Japan Nov Final PMI Services: 53.0 v 52.1 prelim (confirms 2nd straight month of expansion).
- (JP) Bank of Japan (BOJ) announcement related to daily bond buying operation: Unchanged.
- (JP) Japan Fin Min Suzuki: Believes cash handout expenditures aren’t too high, will contribute to consumption.
- (JP) Japan Government Draft: Must restore economy first and then deal with fiscal reform.
Korea
- Kospi opened -0.3%.
- (KR) South Korea Govt confirms limiting gathering to 6 individuals in the greater Seoul region; to pursue social distancing measures for the next 4 weeks – Press.
- (KR) South Korea Nov Foreign Reserves: $463.9B v $469.2B prior.
- (KR) South Korea reports record number 736 critical condition coronavirus patients.
- (KR) South Korea Vice Fin Min: Inflation uncertainty is increasing; Govt will take steps to curb excessive inflation expectations.
- (KR) South Korea Parliament approves KRW607.7T 2022 budget (As expected); Projects debt to GDP at 50% during 2022.
China/Hong Kong
- Hang Seng opened -0.5%; Shanghai Composite opened +0.1%.
- (CN) China PBOC sets Yuan reference rate: 6.3738 v 6.3719 prior.
- (CN) China PBOC Open Market Operation (OMO): Sells CNY10B in 7-day reverse repos v CNY10B prior; Net drain CNY90B v Net drain CNY90B prior.
- 1638.HK Kaisa Group Confirms exchange offer has lapsed; Existing $400M in 6.5% notes to mature Dec 7th; No guarantee of meeting repayment obligations.
- (CN) China should improve rules to develop junk bond market – Chinese press.
- (US) Issues joint statement with EU expressing strong concern regarding China’s actions in South, East China seas and Taiwan Strait.
- (CN) China Ambassador to the US Qin Gang: to reduce approval times needed by US Business executives to at most 10 days [easing travel rules for US business execs]; affirmed call for the US to cancel tariffs on China – financial press.
- (CN) China Nov Caixin PMI Services: 52.1 V 53.0E [lowest since Aug].
- (HK) China to appoint National Security advisers in Macau.
- (CN) China to raise coal term contract benchmark prices – Press.
- (US) SEC adopts rule that would require US-listed foreign firms to disclose whether they’re owned or controlled by a govt entity.
- (CN) China govt advisers said to have recommended lowering the official 2022 GDP growth target as headwinds are growing- press.
- (CN) China Ministry of Finance (MOF) sells 3-month and 6-month bills.
- (CN) China releases 5-year plan on green development for the industrial sector.
North America
- (US) New York Gov: 5 coroanvirus omicron variant cases identified in New York [Suffolk County, Queens and Brooklyn]; encourages the use of indoor masks.
- (US) Los Angeles County in California reports 1st omicron variant case.
- (US) Pres Biden to seek a code of conduct at the upcoming Summit for Democracy; Aims to rally partners behind a crackdown on surveillance technology.
- DIDI Begins prep for Hong Kong listing and working on delisting in the US.
- (US) As expected, Senate passes the short term funding bill funding the Govt through Feb 18th.
Europe
- (TR) Fitch revises Turkey sovereign rating outlook to Negative; affirms rating at BB.
- (EU) ECB’s Muller (Estonia): Omicron is not reason to shift PEPP end timeable.
- (IE) Ireland Nov PMI Services: 59.3 v 63.4 prior.
- (UK) Expected that Conservatives have retained seats in the Old Bexley and Sidcup by-elections, with a smaller margin compared to 2019 – UK media.
Other
- (SG) Singapore Nov PMI (Whole economy): 52.0 v 52.3 prior (12th consecutive expansion).
- (IN) India Strategic Petroleum reserve CEO Ahuja: Have yet to receive advise on releasing 5M barrels of oil from reserves; Expects to lease out some capacity by Jan.
Levels as of 00:20 ET
- Nikkei 225, +0.6%, ASX 200 +0.2% , Hang Seng -0.7%; Shanghai Composite +0.7% ; Kospi +0.8%.
- Equity S&P500 Futures: flat; Nasdaq100 -0.1%, Dax +0.2%; FTSE100 +0.3%.
- EUR 1.1307-1.1290 ; JPY 113.24-112.95 ; AUD 0.7102-0.7062 ;NZD 0.6827-0.6783.
- Gold +0.6% at $1,770/oz; Crude Oil +1.9% at $67.78/brl; Copper +0.2% at $4.2968/lb.
