HomeContributorsFundamental AnalysisChina Regulatory Headwinds Weigh On The Market Sentiment

China Regulatory Headwinds Weigh On The Market Sentiment

General trend

  • Markets traded lower as China continues to layout new regulatory moves, today issued its first white paper on exports. Australia was the only positive performer with its first day of trade after Christmas holiday.
  • Yen traded in a tight range with large options expiring today, analysts note its unlikely to break 115 until the new year. With little major news currencies were little changed.
  • COVID cases continue to rage in South Korea and Australia, while manufactures in Xi’an China make alternative plans while COVID cases are addressed.
  • China uses another large OMO operation, sending the overnight repurchase rate down 29bps.
  • Japan press focuses on self driving tech in autos.
  • Musk sells another $1.02B in Tesla shares.
  • China Taiwan Affairs Office takes a tough stance on relations in 2022.
  • With a 30 day grace period, Evergrande has not commented if they had made or made plans to pay bond payment that was due Dec 28th.

Headlines/Economic data

Australia/New Zealand

  • ASX 200 opened flat.
  • SYR.AU Gives additional update on Tesla agreement: Contract must reach agreement on AAM specs by the end of 2022.
  • (AU) Australia PM Morrison: National cabinet meeting on COVID will take place on Thursday Dec 30th.
  • (AU) China sets 2022 Australia wool import tariff quota at 40.2Kt.

Japan

  • Nikkei 225 opened -0.3%.
  • (JP) Japanese car makers said to plan fitting their produced cars with self-driving features as soon as in 2022 – Nikkei.
  • (JP) Japan set to keep border rules against Omicron variant spread for now – press.
  • 3086.JP Reports 9M Net +ÂĄ3.7B v -ÂĄ15.6B y/y; Op +4.4B v -18.5B y/y; Rev ÂĄ237.5B v ÂĄ230.7B y/y ( shares +10%).

Korea

  • Kospi opened -0.6%.
  • (KR) South Korea Jan Business Manufacturing Survey: 92 v 88 prior; Non-Manufacturing Survey: 78 v 83 prior.
  • (KR) South Korea Nov terms of trade: 88.3, -10.1% y/y (9-year low).
  • (KR) South Korea Ruling Party and Govt have agreed on need to extend coronavirus measures.
  • 005930.KR Have flexibility in chip production lines in Xi’an China plants (city currently having a COVID outbreak).
  • (KR) South Korea Foreign Min Chung: South Korea and the US have ‘effectively’ agreed on a draft to end the Korean War – Yonhap.

China/Hong Kong

  • Hang Seng opened -0.1%; Shanghai Composite opened flat.
  • (CN) China PBOC sets Yuan reference rate: 6.3735 v 6.3728 prior.
  • (CN) China PBOC Open Market Operation (OMO): Sells CNY200B in 7-day reverse repos v CNY200B prior; Net inject: CNY190B v CNY190B prior.
  • (CN) China Q4 Beige Book shows companies cut investment and remained cautious on borrowing.
  • (CN) China PBOC to conduct CNY5.0B in 3-month Central Bank Bill Swap (CBS) operation on today’s session v CNY5.0B prior.
  • (TW) China Taiwan Affairs Office Official Ma: Will be more forceful against Taiwan independence; To query on the report that China spies have infiltrated the Taiwanese military.
  • (CN) China releases an export control white paper – China state media.
  • (CN) Expects that China will set the TC/RC floor for copper in Q1 at $70/t and $0.07/lb, flat q/q – Press.
  • (CN) Shanghai Sec News: China is planning to add participants and derivatives into the national carbon trading market.
  • (CN) China State Planner (NDRC) has approved building clusters of data centers in the Inner Mongolia, Gansu, Guizhou, and Ningxia provinces.
  • 1810.HK Expected to announce CNY100B 5 year R&D plan, targeting to be top mobile phone brand within 3 years – HK press.
  • JD Enters into 5-year $2.0B green loan facility; Raises share buyback amount by $1.0B to $3.0B and extends length through Mar 2024.
  • 3333.HK Have ~$7.4B of bond coupon payments and repayments due during 2022 (reminder had 2 USD bond payments due on Dec 28th, have a 30 day grace period before a default can be declared).

Other

  • (TW) China Official Ma: Will be more forceful against Taiwan independence.
  • (SL) Sri Lanka Central Bank Gov Cabraal: Official reserve position at $3.1B, reserves to remain around current level through end of year.

North America

  • (US) Weekly API Crude Oil Inventories: -3.1M v -3.7M prior.
  • TSLA CEO Musk files form 4 to exercise ~1.56M options at $6.24/shr; Sells ~$1.0B in shares.

Europe

  • (IE) Ireland Dec Economic Pulse: 79.9 v 83.2 prior.
  • (RU) Russia Dep PM Novak: Russia is ready to export more gas to EU if long term supply contracts are signed, have enough resources to meet any EU Demand; Oil price of $65-80/barrel is comfortable in 2022.
  • GAZP.RU Has not booked gas transit capacity for exports via the Yamal-Europe pipeline for Dec 29th (9th day in a row).

Levels as of 00:15ET

  • Hang Seng -0.9%; Shanghai Composite -0.7%; Kospi -0.8%; Nikkei225 -0.8%; ASX 200 +1.2%.
  • Equity Futures: S&P500 +0.1%; Nasdaq100 +0.3%, Dax -0.0%; FTSE100 +0.3%.
  • EUR 1.1315-1.1298; JPY 114.88-114.74; AUD 0.7236-0.7213; NZD 0.6813-0.6791.
  • Commodity Futures: Gold -0.3% at $1,806/oz; Crude Oil +0.1% at $76.02/brl; Copper -0.7% at $4.41/lb.

 

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