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Markets Follow Wall Street Lead, In Quiet Trade, But Remain Skittish On Omicron

General trend

  • Risk appetite resumed in US session, reversing a 3 day decline, giving the direction to the session, with little catalyst of its own from data or otherwise, heading into a holiday weekend.
  • Israel Govt now recommending a 4th COVID booster shot, preparations are underway to start with those age 60 or older and health care workers.
  • Deal flow remains strong heading into the end of the year, latest is Link in Australia announcing it will be acquired by Canadian company.
  • Japan Oct meeting minutes stay the course until reaching 2% inflation.
  • Currency little changed all session but USD edged higher across the majors as the session moved into the second part of the day.
  • On the omicron front: Aussie leaders met but do not announce new measures, Singapore freezes quarantine free ticket sales until Jan 20th, New Zealand delays border reopening (yesterday), S. Korea considering tighter measures then what was announced already.
  • Note: Tomorrow is the last full trading day for most markets ahead of Christmas holiday. Friday, Dec 24th Australia, New Zealand, Hong Kong, Singapore all trade half day.

Headlines/Economic data

Australia/New Zealand

  • ASX 200 opened +0.0%.
  • LNK.AU To be acquired by Dye & Durham at A$5.50/shr cash or C$3.2B; Board unanimously recommends deal.
  • (NZ) New Zealand Fin Min Robinson: Work to establish a Parliamentary Budget Office that would oversee Govt fiscal strategy and provide independent cost analysis has stalled.
  • (AU) Australia Nov Westpac Leading Index: 0.1% v 0.3% prior.
  • (NZ) Fonterra Global Dairy Trade Auction Dairy Trade price index: -1.5% v +1.4% prior.
  • Australia PM Morrison: Cabinet agreed to respond to surge in coronavirus cases, to increase payments to doctors to administer coronavirus vaccines.

Japan

  • Nikkei 225 opened +0.3%.
  • (JP) Japan Osaka Prefecture finds 4 cases of the Omicron Variant; unable to trace origins of 3 cases to overseas travel.
  • (JP) Japan Govt said to be looking at a FY22/23 Budget of ~¥107.6T – Press (in line).
  • (JP) Bank of Japan (BOJ) Oct Meeting Minutes: Discussed weak yen impact on economy; Will continue to maintain favorable monetary policy until hitting 2.0% CPI target.
  • (JP) Another press report notes they expect Japan Govt to raises GDP outlook to 3% range – NHK.
  • 4502.JP Receives Complete Response Letter from the U.S. FDA for TAK-721, will not be approved in present form.
  • 8473.JP CEO Kitao: In conjunction with the government, has the option to delist Shinsei Bank Ltd. in order to pay back funds the lender owes to taxpayers – press briefing.
  • 9984.JP Softbank said to be finalizing a $4B loan from an Apollo led group that would be secured by its Second Vision Fund – press.
  • Z.IN To merge with Sony Pictures Networks India; Sony to hold 50.9% stake in Zee after scheme of arrangement; Zee to allot ~265M shares via bonus issue to Essel Holdings.
  • (JP) Japan Nov Crude Steel Production 8.04Mt, -2.2% m/m, +10.7% y/y.

Korea

  • Kospi opened +0.6%.
  • (KR) South Korea Ministry Joint Statement: Coronavirus resurgence adding burden to economy; Korea faces economic uncertainties to stabilize prices.
  • 003605.KR CEO Chey Tae-won fined KRW1.6B by antitrust regulator for allegations that he unfairly received huge profits from the company’s 2017 business deal.

China/Hong Kong

  • Hang Seng opened +1.1%; Shanghai Composite opened +0.2%.
  • (CN) China PBOC has dismissed rumor that an official from China Banknote Printing and Minting surrendered himself on suspicion of “printing CNY2.0T of bank notes with the same serial number.
  • (CN) China Premier Li: Hope that Hong Kong can have deeper integration with China; We hope Hong Kong can directly connect to China’s development strategy – comments while HK Chief Lam is in China for her annual trip.
  • (CN) China PBOC sets Yuan reference rate: 6.3703 v 6.3729 prior.
  • (CN) China PBOC Open Market Operation (OMO): Sells CNY10B in 7-day reverse repos v CNY10B prior and CNY10B in 14-day reverse repos v CNY10B prior; Net inject CNY10B v Net inject CNY10B prior.
  • (CN) Satellite pictures show China military build up in the South China Sea using new warfare style weapons and tactics – press.
  • (CN) Heilongjiang, China Govt called for “all out efforts” to promote the growth of real estate industry – press.

Other

  • (IL) Israel government advisory panel of health experts recommends giving the 4th booster shot.

North America

  • (US) Weekly API Crude Oil Inventories: -3.7M v -0.8M prior.
  • TSLA CEO Musk files form 4 to exercise options for ~2.1M shares at $6.24/share; Sells ~584K shares for ~$528M; Follow Up: CEO Musk: Have sold enough stock to satisfy selling 10% holding in Tesla – tweet.

Levels as of 00:15ET

  • Hang Seng +0.1%; Shanghai Composite -0.2%; Kospi +0.3%; Nikkei225 +0.0%; ASX 200 +0.1%.
  • Equity Futures: S&P500 -0.1%; Nasdaq100 -0.3%, Dax -0.2%; FTSE100 +0.2%.
  • EUR 1.1297-1.1271; JPY 114.18-113.95; AUD 0.7157-0.7127; NZD 0.6772-0.6743.
  • Commodity Futures: Gold -0.0% at $1,788/oz; Crude Oil +0.2% at $71.28/brl; Copper -0.3% at $4.34/lb.

 

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