Headlines/Economic Data
General Trend:
Asia markets open generally higher, tracking Friday’s rally in US equities
Energy shares outperform
Markets in Hong Kong and Shanghai underperform
US dollar (USD) trades generally firmer
Busy week in terms of corporate earnings and macro events (including Australia Q4 CPI, China PMIs, Fed meeting, Germany prelim CPI, US monthly nonfarm payrolls)
Apple due to report quarterly results after the close on Thursday, Feb 1st
Japan Telecoms to report earnings this week (KDDI, Sharp, NTT Docomo)
PBoC skipped open market operation (OMO) for third straight session
PBoC sets yuan at multi-year high for 7th straight session
Japan
Nikkei 225 opened +0.8%; closed flat
Shin-Etsu Chemical: Trades higher by over 4% (Q3 results above ests)
Fanuc [6954.JP]: Gains over 2% (Reported Q3 Net profit ¥50.5B v ¥41.8Be, Op profit ¥61.8B v ¥52.4Be, Rev ¥188.4B v ¥133.2B y/y; Raises FY18 guidance)
Fuji Electric [6504.JP]: Gains over 2% ahead of expected earnings report
Sharp [6753.JP]: +1.5% (Expected to report earnings on Jan 31st) – Auto components firm Koito Mfg: Declines over 5% (FY op profit guidance below consensus)
(JP) Japan’s cryptocurrency exchange Coincheck has confirmed that ~¥58B ($534M) in customers’ virtual currency holdings were taken from its wallets Friday (appears to be the biggest virtual currency heist to date) – Nikkei
(JP) Japan Cabinet Office white paper: consumer prices show signs of picking up – Nikkei
(JP) Japan MOF, BoJ and FSA officials expected to discuss markets during Monday afternoon – financial press
(JP) Bank of Japan: Gov Kuroda did not revise the inflation outlook in his Davos comments (from Friday, Jan 26th):[ ** NOTE: Earlier on Friday: (JP) BoJ Gov Kuroda: Reiterated that medium to long term inflation expectations are projected to rise; Seeing relatively weak prices in Japan; see some indication of rising wages and prices in Japan; we are finally close to our 2% inflation target] Looking Ahead: Japan Dec Household Spending, Unemployment Rate, Retail Sales due for release on Tuesday
Korea
Kospi opened +0.5%
Banks trade broadly higher: Shinhan Financial +2.3%, Woori +1% – Chip makers gain: Samsung Electronics and Hynix trade higher by over 1%
Samsung Biologics [207940.KR] +5.5% (may report earnings on Jan 31st)
Lotte Chemical: Gains over 3% (may report earnings on Feb 1st)
E-Mart: Has gained over 2% (gained over 15% on Friday amid investment in online unit)
(KR) South Korea to layoff 200 public employees (inlc executives), they will be referred to prosecutors over job favor cases – Korean press
(KR) Bank of Korea (BOK) economic focus report: The United States is expected to ramp up protectionist trade policies going forward, which could pose challenges for South Korea – Korean press
(KR) South Korea not excluding possibility of foreigner tax delay – Korean press
(KR) Bank of Korea (BoK) sells KRW800B in 1-year monetary stabilization bonds (MSB): yield 1.88%
(KR) South Korea sells KRW700B 20-year bonds: avg yield 2.65% v 2.405% prior
China/Hong Kong
Hang Seng opened +0.6%, Shanghai Composite +0.2%; Indices later pare gains
Hang Seng Property Index -1%, Information Tech -1%, Consumer Goods -0.9%, Financials -0.5%; Energy +1.5%
Chongqing Iron & Steel [1053.HK]: Higher by over 9% (expects to turn profit in FY17)
Great Wall Motor [2333.HK] Gains over 2% (receives some positive broker commentary despite FY profit warning)
Wynn Macau [1128.HK] Shares declines over 4%, bonds also decline (Shares of Wynn Resorts closed down by over 10% on Friday amid reports of sexual misconduct allegations related to CEO Steve Wynn)
Leshi Internet, 300104.CN Trades down by 10% daily limit for the 4th consecutive day
(KR) South Korea think tank HRI: South Korean companies need to shift their strategies in China as Beijing strives to boost domestic spending by attracting foreign investment and offering higher wages – Korean press
(CN) China NDRC sees 2018 GDP at 6.5-6.8%
(CN) PBoC: Skips OMO (3rd straight session) v skipped prior; Net drain CNY140B v CNY270B drain prior
USD/CNY (CN) PBOC SETS YUAN REFERENCE RATE AT 6.3267 v 6.3436 PRIOR (strongest level since Nov 2nd, 2015)
(CN) China and South Korea economic chiefs to meet in China this week to discuss issues including increasing economic cooperation – Korean press
(HK) CNY 1-month HIBOR 4.70983% (highest level since Sept); 1-week HIBOR 4.17154% (highest level since Nov)
Australia/New Zealand
ASX 200 opened -0.1%; closed +0.4%
ASX 200 Energy Index +1.1%, Utilities +1%, Telecom +0.5%, Consumer Discretionary +0.5%, Financials +0.4%; REIT -0.7%
Energy firm AWE [AWE.AU]: Gains over 16% (Receives bid from Japan’s Mitsui for A$0.95/shr cash or A$602M)
CBA.AU Names retail banking chief Matt Comyn as CEO, effective, April 9th
Iluka Resources [ILU.AU] Gains over 5%: Reports Q4 Mineral Sands Production 298.3Kt 217.5Kt y/y; Total Mineral Sands Rev A$245.4M v A$253.7M y/y
AUD/USD St George Bank raises year-end target for A$ to $0.84 (prior $0.82)
(AU) Australia PM Turnbull: To spend $3.1B to increase stake in global arms exports
SML.NZ Affirms 2017/18 milk price forecast of NZ$6.50 kgMS
AAC.AU Australia farmland values are expected to rise for a 5th consecutive year in 2018 fueled by low interest rates, rising commodity prices, favourable growing conditions and more profitable farmers looking to expand
Australian Agricultural Looking Ahead: New Zealand Dec Trade Balance and Australia Dec NAB Business Confidence due for release on Tuesday
North America
Avon [AVP] Activists investors expected to call for the company to examine options – US financial press
Wynn Resorts [WYNN]: Steve Wynn resigns from post as Republican National Committee (RNC) finance chair amid sexual misconduct allegations – press
Wynn Resorts [WYNN]: Following allegations related to CEO Wynn board said to create special committee – US financial press
Ford [F]: China chief Jason Luo has resigned, effective immediately, new chief to be named in future announcement
(US) Trump team considers nationalizing 5G network in order to counter China – Axios
(US) President Trump will use his State of the Union address to build momentum for legislation on infrastructure and immigration – financial press Looking Ahead: Corporate earnings are expected from companies including Lockheed Martin, Seagate Technology
Europe
(EU) ECB’s Knot (Netherlands): central bank has to end its QE program as soon as possible, arguing that there’s not a single reason anymore to continue with it – Buitenhof
(ES) Spain’s Constitutional Court on Saturday blocked Catalonia’s Puigdemont from returning to power in the region (as expected); The Catalonia regional parliament is expected to vote for a new leader on Tuesday in Barcelona – financial press
(UK) PM May facing Conservative party demands to fire Chancellor Hammond over over his push last week for a “very modest” Brexit – FT [**Note: On Friday, Jan 26th a UK government spokesperson said PM May has full confidence in Chancellor Hammond (Fin Min)]
(UK) Govt officials from both China and UK have declared the “golden era” in bilateral ties between China and the UK is in jeopardy ahead of British Prime Minister May’s visit to Beijing next week amid disagreements over China’s overseas investment drive
(IE) Ireland Jan Bank of Ireland Economic Pulse: 92.8 v 88.9 prior
(AT) Fitch affirms Austria sovereign debt at AA+; outlook Stable (from Jan 26th)
(FR) Fitch affirms France sovereign rating at AA; outlook Stable (from Jan 26th)
Temenos [TEMN.CH]: Responds to recent press speculation and says it has not been approached to be acquired nor is it in discussion to do so
Levels as of 01:00ET
Nikkei225 flat, Hang Seng -0.2%; Shanghai Composite -0.3%; ASX200 +0.4%, Kospi +0.9%
Equity Futures: S&P500 -0.1%; Nasdaq100 -0.0%, Dax -0.1%; FTSE100 -0.2%
EUR 1.2434-1.2385; JPY 108.99-108.51; AUD 0.8118-0.8079;NZD 0.7364-0.7318
Feb Gold -0.4% at $1,346/oz; Mar Crude Oil +0.3% at $66.31/brl; Mar Copper +0.8% at $3.23/lb
