Markets Mixed With Lower Holiday Volume; China May Target Lower M2 Growth

Dec 26 17, 07:41 GMT

General Trend: Asian indices trade mixed amid lack of US leads due to Christmas holiday

Taiwan listed Apple suppliers decline following report the US company said Q1 iPhone X sales may be below prior target
Heavy data session for Japan: Nov jobless rate lowest since Nov 1993, Core CPI the highest since March 2015
BoJ Kuroda reiterated ‘powerful’ monetary easing stance
Markets in Australia, Hong Kong and New Zealand closed on Tuesday. Also multiple market closures In Europe

Japan

Nikkei 225 opened -0.1%; closed -0.2%
Department store Takashimaya +3.5% (reported 9-month earnings)
(JP) Japan MoF FY18/19 defense spending ¥5.1911T, record high and 6th consecutive rise
(JP) JAPAN NOV NATIONAL CPI Y/Y: 0.6% V 0.5%E; EX FRESH FOOD (CORE) Y/Y: 0.9% (highest since March 2015*) V 0.8%E
(JP) JAPAN NOV JOBLESS RATE: 2.7% V 2.8%E (lowest level since Nov 1993); Job-to-Applicant ratio: 1.56 v 1.56e
(JP) Japan Dec Tokyo CPI Y/Y: 1.0% v 0.6%e; Ex-Fresh Food (Core) Y/Y: 0.8% v 0.7%e
(JP) JAPAN NOV OVERALL HOUSEHOLD SPENDING Y/Y: 1.7% V 0.5%E
(JP) Bank of Japan (BOJ) Oct 30-31 Policy Meeting Minutes: BOJ must persistently pursue powerful monetary easing, additional easing measures should not be implemented now
(JP) Japan Fin Min Aso: Deflation was caused by inappropriate response of Govt and BOJ
(JP) Bank of Japan (BOJ) Exec Dir Miyanoya: prolonged monetary easing is weighing heavily on bank profits, many regional banks could be hurt in the long-run from intensifying competition that forces lenders to cut rates
6502.JP Being sued by 97 investors seeking ¥33B in damages – press
(JP) Japan MoF sells ¥2.2T v ¥2.2T indicated in 0.10% 2-yr JGBs; avg yield -0.136%; bid to cover 4.32x

Korea

Kospi opened +0.3%
LG Display +1.3%: South Korea government approves KRW1.8T investment planned for China
Chipmakers decline: Samsung Electronics -0.5%, Hynix -1.2%
(KR) South Korea Govt and steelmakers in talks on ways to address US trade protectionism, including adjusting steel exports – Korean press
(KR) Bank of Korea (BOK) sells KRW630B 1-yr monetary stabilization bonds at 1.90%
(KR) According to think tank Hyundai Research Institute (HRI) an economic recovery without a wage increase has been picked as one of top 10 global trends next year – Korean press
(KR) South Korea: See no particular activity by North Korea to launch satellite

China/Hong Kong

Hang Seng closed for holiday, Shanghai Composite opened -0.1%
(CN) PBoC head of research Xu Zhong: local governments should be allowed to go bankrupt in a bid to rein in excessive borrowing – CBN
(CN) PBoC OMO: Skips OMO v skips prior; Net drain CNY50B v CNY120B drain prior (3rd consecutive skip)
USD/CNY (CN) China PBoC sets yuan reference rate at 6.5416 v 6.5683 prior (strongest setting since Sept 13th)
(CN) China PBOC Adviser Huang: High leverage ratio may lead to crisis; China slowdown, no govt bailouts to accumulate risks
(CN) China Ministry of Industry and Information Technology (MIIT) sees 2018 industrial production growth ~6% (in line with 2017 target) – US financial press

Australia/New Zealand

Other Asia

(MY) Malaysia Central Bank (BNM) short term rates to remain stable on intervention
(PH) Philippine Central Bank (BSP): See little need to tighten policy now, inflation not flashing warning sign yet
(SG) Singapore Nov CPI M/M: 0.6% v 0.3%e; Y/Y: 0.6% v 0.6%e; Core CPI Y/Y: 1.5% v 1.5%e (**Note this is the measure monitored by the MAS)
(SG) Singapore Nov Industrial Production M/M: -2.3% v -0.5%e; Y/Y: 5.3% v 8.1
(SG) Singapore to release Q4 GDP data on Tuesday, Jan 2nd (first major Asian economy to release Q4 GDP data)
Keppel Corp -3.4%: Offshore & Marine unit to pay ~$422M fine

North America

US markets to resume trading on Tuesday. Canada closed in observance of Boxing Day
AAPL Said to have told suppliers Q1 iPhone X sales will be 30M v 50M units prior – Taiwan press
(US) US financial press article examines possible implications of tax-related corporate repatriations on the US dollar; analysts unclear on impact

Europe

EUR/USD: Financial Press article comments on the sharp and brief decline seen in EUR on Christmas Day; The Euro declined by 3% in minutes, says the article.
(DE) German Finance Ministry Dec Monthly Report: Fiscal Balance €16.1B for Jan-Nov period
(UK) Ineos issued update on Forties oil and gas pipeline (450K bpd): Says repair of the pipeline is now ‘mechanically complete’; pressure testing has
started; reiterates full flows should resume in early Jan
Credit Suisse: Sees Q4 writedown of CHF2.3B due to US tax reforms
Various markets in Europe will be closed on Tuesday in observance of holidays, including France, Germany, Spain, Switzerland, UK and Italy.

Nikkei225 -0.2%, Hang Seng closed; Shanghai Composite +0.5%; ASX200 closed, Kospi -0.2%; Taiex -1%
Equity Futures: S&P500 -0.1%; Nasdaq100 -0.1%, Dax -0.3%; FTSE100 +0.0%
EUR 1.1875-1.1863; JPY 113.36-113.19; AUD 0.7725-0.7711;NZD 0.7037-0.7017
Feb Gold +0.3% at $1,282/oz; Feb Crude Oil +0.2% at $58.53/brl; Mar Copper +0.3% at $3.26/lb