Headlines/Economic Data
General Themes: Asian currencies continue to gain
Major Asian equity markets end 2017 higher: Hang Seng YTD return +36.2%, Kospi +21.8%, Nikkei 225 +19.2%, Taiex +14.8%, ASX 200 +7.1%, Shanghai Composite +6.3%
South Korea 2017 inflation below 2% target
Upcoming Euro Zone data in focus
Australia/New Zealand
ASX 200 opened flat; closed -0.4%
ASX 200 REIT Index -0.7%, Consumer Discretionary -0.6%, Financials -0.3%
(AU) AUSTRALIA NOV PRIVATE SECTOR CREDIT M/M: 0.5% V 0.4%E; Y/Y: 5.4% V 5.2%E
Milk Producer Fonterra cuts New Zealand milk collections forecast on dry weather conditions
China/Hong Kong
Shanghai Composite opened flat, Hang Seng +0.2%
Hang Seng Services Index +0.9% (airlines and gaming shares gain), Industrial Goods +0.6%; Information Technology -0.4%
(CN) PBoC: To set up temporary liquidity facility for the China Lunar New Year, which will allow banks to use official required deposit reserves of up to 200bps
(CN) China MOF researcher said to suggest a property tax trial in Xiongan – financial press
(CN) China Finance Ministry (MOF) says to continue to cut tax and fees in 2018; To focus on local govt debt risk prevention in 2018 – Xinhua
(CN) China End-Nov Outstanding Local Government Debt: CNY16.6T – MOF
(CN) PBoC: Skips OMO for 6th straight session; Weekly net drain CNY290B v CNY200B injection w/w; For 2017, the PBoC drained CNY65B
(CN) PBoC sets yuan reference rate at 6.5342 v 6.5412 prior
Smartphone maker Huawei sees slower revenue growth in 2017 vs 2016: Guides FY17 Rev CNY600B v CNY522B y/y, +14.9% y/y; sees smartphone shipments 153M units, +10.1% y/y (Note: In FY16 Smartphone shipments were +29% y/y and total Rev growth was 32%)
(CN) China Copper treatment and refining charges (TC/RCS) for Q1 2018 said to have been set by smelter group at $87/ton vs $95 q/q – financial press
Japan
Nikkei 225 opened +0.2%; closed: -0.1%
TOPIX Securities Index +0.6%
Asahi Glass +2% (Speculation that FY op profit may exceed expectations)
Mitsubishi UFJ +1.2%
Retailer Adastria -8% (9-month profits declined 41%)
Japan Foreign Minister said to visit China in Jan – Japanese Press
Looking ahead: Japanese markets are closed for holiday from Jan 1-3rd
Korea
Kospi was closed in observance of holiday
Nov inflation remained below the Bank of Korea’s 2% target: SOUTH KOREA DEC CPI M/M: 0.3% V 0.3%E; Y/Y: 1.5% V 1.4%E; CPI Core Y/Y: 1.5% v 1.5%e; 2017 Avg CPI: 1.9% v 1.0% in 2016
South Korea Industry Minister Paik: Reiterates expects 2018 exports to rise amid global recovery
South Korea Foreign Ministry: Seized a vessel with a Hong Kong flag in relation to oil sales to North Korea
Other Asia
(SG) Singapore Nov Bank Loans and Advances Y/Y: 7.1% v 6.8% prior
(SG) Singapore Nov Money Supply M1: 7.3% v 8.8% prior; M2 Y/Y: 3.2% v 4.6% prior
(TW) Taiwan Dollar (TWD) +0.5%, continues to trade at 4-year high
(TW) Taiwan Central Bank said to ask banks to purchase US dollars amid gains in the TWD
North America
US equity markets closed higher: Dow +0.3% (record close), S&P500 +0.2%, Nasdaq +0.2%, Russell 2000 +0.3%
S&P500 Real Estate Sector +0.6%, Utilities +0.6%
(US) US based stock funds see $24.1B inflow in week ended Dec 27th (largest since Dec 2014) – Lipper
Networking equipment firm Adtran [ADTN] cut Q4 outlook: Guided Q4 ~$0.01 v $0.15e, Rev ~$125M v $162Me (guided $155-165M prior); cites factors
including slowdown in spending at domestic Tier 1 customer
(US) TREASURY $28B 7-YEAR NOTE AUCTION RESULTS: DRAWS 2.370%; BID-TO-COVER: 2.55 V 2.36 PRIOR AND 2.52 AVG OVER LAST 12 AUCTIONS (highest BTC since Sept)
(US) US President Trump: Been ‘soft’ on trade with China – NYT
(US) DOE CRUDE: -4.6M V -3.5ME
During Asian session, WTI Crude Oil Futures trade above $60/bbl, highest since June 2015 amid US weekly inventories data
Europe
(IT) Italian Pres signs decree to dissolve parliament ahead of elections (as expected); Italy officials confirm general election will be held March 4th
Looking Ahead: Early close for the UK; Dec Preliminary CPI data due to be released for Germany and Spain, along with Euro Zone Nov M3 Money Supply and Private Sector Loans.
Levels as of 01:00ET
Hang Seng +0.3%; Shanghai Composite +0.2%; Kospi closed
Equity Futures: S&P500 +0.1%; Nasdaq100 flat, Dax +0.1%; FTSE100 +0.1%%
EUR 1.1936-1.1949; JPY 112.69-112.97; AUD 0.7790-0.7804 ;NZD 0.7084-0.7103
Feb Gold flat at $1,297/oz; Feb Crude Oil +0.7%% at $60.27/brl; Mar Copper +0.1% at $3.309/lb
