Headlines/Economic Data
General Trend: Asian markets trade generally higher after Friday’s gains in the US
Property developers in China and Hong Kong outperform amid release of Dec sales figures
Chinese cement names (Anhui Conch, China Res Cement ) raise FY17 outlooks on higher prices
South Korea steps up currency warning: Korean Won (KRW) weakens ahead of Tuesday’s expected talks with North Korea
Japan
Nikkei 225 closed for holiday
Fast Retailing: Reports Dec Uniqlo SSS +18.1% y/y (includes online sales); cites factors including cold weather conditions (from Jan 5th after close)
Korea
Kospi opened +0.5%
Automakers gain: Hyundai Motor +0.9%, Kia +1.1%
Chipmakers trade mixed: Samsung Electronics flat, Hynix -1%
General strength among financials and chemicals: KB Financial +4%, Lotte Chemical +8%, LG Chemical +3.5%
LG Electronics, 066570.KR Reports prelim Q4 (KRW)Op 366.8B v 464Be; Rev 16.97T v 16.3Te
(KR) South Korea reiterates will take steps if one-sided moves are seen in FX market; to take steps ‘sternly’ in case of drastic move in FX; Amid the comments, USD/KRW is now moving higher on the session, currently +0.4%, speculation that South Korea officials may have intervened on today’s session by purchasing US dollars (USD) in order to slow the rise of the Korean Won (KRW)
(KR) Bank of Korea (BoK) sells KRW600B in 6-month monetary stabilization bonds: yield 1.60%
(KR) Bank of Korea (BOK) banks are likely to tighten their rules on household loans in Q1 of this year amid a recent trend of rising interest rates
(KR) South Korea Finance Ministry: finalized the details on a tax code overhaul whose main features are the levying of an additional tax on owners of multiple homes, a move intended to curb rising housing prices, and the raising of the highest corporate income tax rate
(KR) South Korea official: special investigation will be implemented on virtual accounts used for cryptocurrency deals, as part of the government’s recent pledge to crack down on excessive speculations
Looking Ahead: LG Electronics may report prelim Q4 results later today; Samsung Electronics may report prelim Q4 results on Tuesday
South Korea and North Korea expected to hold talks on Tuesday which are expected to cover the Winter Olympics and other issues
China/Hong Kong
Hang Seng opened -0.1%, Shanghai Composite -0.2%; Shanghai markets later pare losses
Hang Seng Property/Construction Index +1.8%; Financials -0.5%
China airlines trade broadly higher: China to permit airlines to independently set prices for top routes – US financial press
(CN) China NDRC: China to support merging of coal and electricity companies, sector names stronger on the news from Friday
(CN) PBOC has asked banks to let foreign firms freely remit yuan profits, dividends – China Daily
(CN) China Hebei province planning to cut 6.0Mt steel capacity in 2018 – Chinese press
(CN) China NDRC: China to support merging of coal and electricity companies
(HK) Hong Kong Monetary Authority (HKMA) Chan: As of Nov Hong Kong home prices 101% above the 1997 peak
(CN) CICC sees PBOC raising interest rates by 25bps in 2018
(CN) China PBOC deputy head of research Ji Min: There is room for an increase in interest rates in the short term as industrial product prices and enterprises’ profitability have improved since last year – China Daily
(CN) Chinese Academy of Social Sciences (CASS) expected China’s economy to post stable growth in 2018 and expand by around 6.7% from 2017, despite headwinds from both home and abroad – China Daily
(CN) China PBoC: Skips OMO for 10th straight session; Net drains CNY40B v CNY130B prior
USD/CNY (CN) China PBoC sets yuan reference rate at 6.4832 v 6.4915 prior (strongest yuan fix since May 2016)
(CN) China Dec Foreign Reserves: $3.140T v $3.127Te (highest since Sept 2016, 11th consecutive gain, biggest gain since July); 2017 FX reserves rose $129.5B to $3.1405 v $3.011Tin 2016 (first annual rise since 2014)
1169.HK Reports FY17 Pretax CNY30B, +41% y/y; Rev CNY241.9B, +20% y/y
HNA Holdings -2.5%: HNA units said have missed payments to more China banks – press
Australia/New Zealand
ASX 200 opened +0.3%; closed +0.1%
ASX 200 REIT Index +0.6%, Financials +0.2%
(AU) Australia Dec Foreign Reserves (A$): 85.4B v 85.8B prior
(AU) Australia Department of Industry, Innovation and Science quarterly Resources and Energy report made near-term changes to the iron ore price outlook but kept longer-term projections unchanged
(AU) Australia Dec AiG Performance of Construction Index: 52.8 v 57.5 prior
Looking Ahead: Australia Nov Building Permits due to be released on Tuesday
Other Asia
(TW) Apple supplier LARGAN Precision -4.5%: Reports Dec Rev NT$4.88B, -10.4% y/y
2409.TW Reports Dec Sales NT$25.8B, -17.1% y/y
North America
(US) S&P 500 companies are expected to report Q4 y/y earnings growth of 10.5%, revenue growth seen at 6.7% – Financial Times; Earnings growth is expected to be led by Energy, Materials and Technology sectors
(US) Pres Trump: will try to get a bipartisan deal on welfare reform or will hold the issue for a later time – meeting with GOP leaders at Camp David; Hopefully economic advisor Gary Cohn will be staying for a long time
(US) Fed’s Williams (2018 voter): Reiterates three rates hike in 2018 makes sense – financial press interview
(US) White House chief economist Hassett: Fed would not need to tighten policy at a faster rate in response to recently passed tax cuts – American Economic Association; White House modelling shows the economic effects of the tax plan result in interest rates that are not inconsistent with the Fed’s current guidance.
Celgene: Confirms to Acquire Impact Biomedicines for $1.1B upfront and up to $1.25B in contingent payments, Adding Fedratinib to Its Pipeline of Novel Therapies for Hematologic Malignancies
Looking Ahead: Consumer Electronics Show (CES) to be held in Las Vegas Jan 9-12
Europe
(UK) UK PM May said to plan cabinet changes, which are expected to include a cabinet minister for ‘no deal’ – UK Press
(EU) ECB’s Weidmann (Germany, head of the Bundesbank): central bank should set a concrete date for ending its QE program; signs for inflation to return to a level that is sufficient to maintain price stability – El Mundo
(UK) UK Visa Dec Consumer Spending Y/Y: -1.0% v -0.9% prior (first Dec decline since 2012)
(SA) Saudi prosecutors confirm 11 princes were arrested for ‘disturbing public order’ after they staged a sit in at a royal palace
UBS CEO Ermotti: Will not discuss relationship with HNA; Wealth management business needs to continue to evolve; premature to discuss stock buybacks
ABLX.BE Rejected proposal from Novo Nordisk to acquire it for up to €30.50 per share in cash
Levels as of 01:00ET
Nikkei225 closed, Hang Seng -0.1%; Shanghai Composite +0.5%; ASX200 +0.1%, Kospi +0.5%
Equity Futures: S&P500 +0.1%; Nasdaq100 +0.1%, Dax +0.3%; FTSE100 -0.0%
EUR 1.20.52-1.2012; JPY 113.27-113.02; AUD 0.7873-0.7836;NZD 0.7184-0.7161
Feb Gold -0.3% at $1,318/oz; Feb Crude Oil +0.2% at $61.55/brl; Mar Copper -0.2% at $3.23/lb
