Headlines/Economic Data
General Trend: Nikkei 225 outperforms on catch up rally after being closed for past 3 sessions
Energy shares gain after Wednesday’s up move in oil prices.
South Korean equities underperform
China Caixin Services PMI hits more than 3 year high in Dec
Japan
Nikkei 225 opened +1.4% (in first trading session of 2018); closed +3.3%
Japanese stocks at highest since 1991 as market reopens after New Year holiday break
Topix Securities Index +4.3%, Electric Appliances +3.1%, Iron & Steel +2.1%
Japanese mega banks start 2018 on a positive note: Sumitomo Mitsui Financials +2.7%, Mitsubishi UFJ +2.3%, Mizuho Financial +2.0%
Automakers track US gains: Toyota +2.3%, Honda +2.5%
SBI Holdings: +17.5% (gains attributed to the recent strength seen for the Ripple cryptocurrency)
Fast Retailing +2.7% (to report Dec SSS after close on Friday)
Softbank +4% (tracks gains on the Nasdaq)
Nintendo +4.4%: Pokemon Go expected to finally enter China market, said a press report released on Jan 2nd.
Shin-Etsu Chemical +4.8% (broker commentary)
Chip-related firm SUMCO +3.8% (broker commentary)
(JP) Japan Dec Final PMI Manufacturing: 54.0 v 54.2 prelim (highest level since Feb 2014)
(JP) Japan Fin Min Aso: GDP growth has steadily increased from 5-years ago; Economy, labor and wage environment has also truly changed
Korea
Kospi opened +0.7%, has since reversed gains
Hyundai Motor -2.5% (union announced partial strike), Kia Motors -2.4%: South Korea Dec Auto Exports Y/Y: -40.4%
LG Chemicals -3.4%: China continues to exclude South Korea battery makers from subsidy, said a South Korean Press report.
Amorepacific -2.5% (broker commentary)
Steelmakers track US gains: Posco +2.5%
Lotte Shopping +5.5% (broker commentary)
Mixed trading in the chip sector: Samsung Electronics -0.9% , Hynix +1.4%
(KR) South Korea Fin Min Kim and BOK Gov Lee agree to closely monitor risk factors and take swift measures if needed
(KR) South Korea military: No imminent missile launch seen from North Korea
(KR) South Korea Dec Foreign Reserves: $389.3B v $387.3B prior (record high): Bank of Korea said weakness in the US dollar (USD) increased the value of its holdings denominated in other currencies when converted.
China/Hong Kong
Hang Seng opened +0.4%, Shanghai Composite +0.1%
Hang Seng Energy Index +3%, Information Technology +1.4%
(CN) China researcher sees GDP growth of 6.3%/year by 2020 – 21st Century Herald
(CN) China PBOC outlined plan to limit power use by some bitcoin miners
(HK) Hong Kong Dec PMI Services: 51.5 v 50.7 prior (~4-yr high)
(CN) China PBoC: Skips OMO for 9th straight session; Net drains CNY130B v CNY90B prior
USD/CNY (CN) China PBoC sets yuan reference rate at 6.5043 v 6.4920 prior
(CN) CHINA DEC CAIXIN PMI SERVICES: 53.9 V 51.9 PRIOR (fastest rise since Aug 2014); PMI COMPOSITE: 53.0 V 51.6 PRIOR
Australia/New Zealand
ASX 200 opened +0.2%; closed +0.1%
ASX 200 Energy Index +1.2%, Financials flat ; Utilities -1.1%
(AU) According to industry expects with the Australia property cycle reaching its peak, new floats of A-REITs are unlikely and major offshore investors instead may be eyeing opportunities – AFR
(NZ) Realestate.co.nz reported that New Zealand Dec new listings totaled 7,133, -6.2% y/y
Looking ahead: Australia Nov Trade Balance due for release on Friday
Other Asia
(SG) Singapore Dec PMI Composite: 52.1 v 55.4 prior (first fall in six months and the slowest pace of expansion since July)
(TW) There is speculation that Taiwan could raise interest rates in Q3, would be first rate hike since 2011 – US financial press
(TW) Taiwan Premier: concerned about impact from US tax overhaul
(TW) Taiwan to cut central government budget – Taiwanese Press
North America
US equity markets ended higher: Dow +0.4%, S&P500 +0.6%, Nasdaq +0.8%, Russell 2000 +1.1%
S&P500 Energy Sector +1.5%, Health care +1%, Tech +0.8%
Intel: On Wednesday’s session, Intel declined by over 3% amid a report from The Register that suggested that a design flaw in Intel’s processor chips drove a security-related redesign of the Linux and Windows kernels
Costco Dec SSS above ests: Reports Dec SSS (ex-gas) 8.8%; US SSS (ex-gas) 9.1% v 6.8%e
CVS To hold conference call on Thursday Jan 4th to discuss 2017 and 2018 earnings guidance
(US) FOMC MINUTES FROM DEC 13 MEETING: OFFICIALS SAW MODEST BOOST FROM TAX CHANGES; Generally agreed flatness of yield curve not unusual by historical standards; some expressed concern a possible future inversion could portend economic slowdown; Several Fed officials concerned by low inflation expectations
(US) DEC ISM MANUFACTURING: 59.7 V 58.2E; PRICES PAID: 69.0 V 64.5E
(US) Pres Trump: [Former adviser] Steve Bannon has nothing to do with me or my Presidency. When he was fired, he not only lost his job, he lost his mind – White House
statement ** NOTE Earlier: Steve Bannon was quoted in a new book saying the June 2016 Trump Tower meeting between Donald Trump Jr. and a Russian lawyer was "treasonous"
(US) Weekly API Oil Inventories: Crude: -5M v -6M prior
Looking Ahead: US Dec ADP Nonfarm Employment Change due for release on Thursday, along with the weekly DoE Crude Oil Inventories
Europe
(UK) UK govt reportedly plans to guarantee EU-level farming grants post-Brexit – UK press
(UK) Tony Blair denies claim he told Trump about UK spying – Sky News
(UK) London link may allow for UK stock trading during China hours – US financial press
(DE) Chancellor Merkel’s CDU/CSU and SPD agreed to hold exploratory talks on joint govt from Jan 7th
Looking ahead: UK Dec Services PMI to be released
Levels as of 01:00ET
Nikkei225 %, Hang Seng +0.5%; Shanghai Composite +0.7%; ASX200 +0.1%, Kospi -0.5%
Equity Futures: S&P500 +0.1%; Nasdaq100 +0.2%, Dax +0.3%; FTSE100 -0.1%
EUR 1.2023-1.2005; JPY 112.78-112.48; AUD 0.7842-0.7815;NZD 0.7110-0.7073
Feb Gold -0.6% at $1,310/oz; Feb Crude Oil +0.8% at $62.09/brl; Mar Copper +0.5% at $3.27/lb
