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General Trend:

• Nikkei reverses opening gain, large component Fast Retailing is among the decliners
• IT index weighs on the Shanghai market in early trading; Energy sector gains
• Chinese officials seek to ease concerns about economy, Q4 GDP figures expected next week (Jan 21st)
• New Zealand sells 2029 bonds at a bid to cover of less than 2.0x
• Australia Jan consumer inflation expectations decline to lowest level since 2016
• Indonesia Central Bank expected to hold rate decision later today, unchanged expected
• US companies expected to report earnings on Thursday include American Express, Morgan Stanley and Netflix (includes afterhours)
• Rio Tinto expected to report quarterly production on Friday

Headlines/Economic Data

Japan

• Nikkei 225 opened +0.5%
• (JP) Bank of Japan (BOJ) Deputy Gov Amamiya: Aging could have negative impact on economy
• 6366.JP Said to be seeking ¥100B in financial aid - Japan press
• (JP) Bank of Japan (BoJ) Gov Kuroda: With low interest rate environment, there is a greater risk that central banks will face zero lower bound problem
• (JP) Japan Center for Economic Research (JCER): Japan GDP -0.7% in Nov v 0% prior month; notes declines for capital spending, consumption and exports – Nikkei

Korea

• Kospi opened +0.2%
• (KR) US Vice Pres Pence: North Korea has yet to take "concrete steps" to dismantle its nuclear weapons program – Yonhap
• (KR) South Korea Fin Min Hong: Govt to increase the number of hydrogen fuel cell electric vehicles to ~80K units by 2022 as part of a broader effort to give a boost to the "hydrogen economy" – Yonhap
• (KR) South Korea National Pension Service (NPS) to diversify its investment portfolio this year in an effort to boost returns; to invest more in overseas securities and alternatives while cutting back on bond investments - Yonhap

China/Hong Kong

• Hang Seng opened +0.2%, Shanghai Composite +0.1%
• 960.HK Substantial shareholder Junson Development International sold a total of 150M shares at HK$22.70/share
• (CN) Analysts see China Q4 GDP at 6.4% y/y (would match the slowest pace since early 2009 ) - US financial press
• (CN) China PBoC Open Market (OMO): Injects CNY400B combined in 7-day and 28-day reverse repos v CNY570B injection of 7-day and 28-day prior; Net: CNY380B injection v CNY560B injection prior
• (CN) China PBOC sets Yuan Reference Rate: 6.7592 v 6.7615 prior
• (CN) China PBOC Deputy Gov Pan: important to build a transparent and open bond market; 'hopefully' no immediate repatriation of proceeds from Panda bonds
• 486.HK, RUALR.RU Senate fails to advance sanctions measure against Rusal and EN+ - press
• HUAWEI.CN US federal prosecutors reportedly to pursue criminal charges against Huawei over theft of trade secrets; indictment could come soon - WSJ
• US senators getting ready to introduce bill targeting Huawei and ZTE that would ban the sale of their products and components in the US
• (CN) FTSE Russell Exec: Seeking consensus from investors on including China bonds into its global indices

Australia/New Zealand

• ASX 200 opened +0.2%
• WHC.AU Reports Q2 production managed saleable coal 5.6Mt v 5.0 y/y; ROM coal 7.4Mt v 5.4M y/y; Affirms FY19 guidance
• WPL.AU Reports Q4 Rev $1.42B v $939.3M y/y; Production 24.1MMBOE v 23.3e v 21.9 y/y; Guides FY19 production 88-94 MMBOE; CAPEX $1.6-1.7B
• (NZ) New Zealand Dec REINZ House Sales Y/Y: -12.9% v +2.6% prior
• (AU) Australia Jan Consumer Inflation Expectation: 3.5% v 4.0% prior
• (AU) AUSTRALIA NOV HOME LOANS M/M: -0.9% V 2.2 % PRIOR; Owner Occupier Loan Value m/m: -1.4% v 3.5% prior
• (NZ) New Zealand sells NZ$250M in 3.00% 20209 bonds; avg yield 2.2709% v 2.5990% prior; bid to cover 1.59x v 2.89x prior

Other Asia

• (SG) Singapore Dec Non-Oil Domestic Exports m/m: -5.7% v +3.0%e; y/y: -8.5% v +2.0%e; Electronic Exports y/y: -11.2% v 4.3% prior
• 2330.TW Reports Q4 (NT$) Net 99.9B v 99.1Be; Op 107.1B v 108Be; Rev 289.8B, +4.4% y/y

North America

• AAPL Reportedly planning to reducing hiring in some divisions (unclear which yet) as iPhone sales slow - press citing his meeting with employees
• (US) Fed's Kashkari (dove, non-voter): Fed has less room to cut rates in a future downturn, but there are other tools
• (US) Senate Finance Committee Chairman Grassley (R-IA): Think that Trump is leaning toward implementing auto tariffs - US financial press
• (US) In 2018 Port of Los Angeles handled 9.46M TEUs (record high), +1.2% y/y - financial press
• (US) According to an un-named official from Trump administration the shutdown will negatively impact GDP by 0.1%/week, analysts see negative impact on the economy of $1.2B/week - Guardian

Europe

• (UK) PM MAY SURVIVES 'NO-CONFIDENCE' VOTE IN PARLIAMENT (as expected); Vote 325 for May and 306 against
• (UK) PM May: there's now an opportunity to find a way forward on Brexit; the last 24 hours have been unsettling for the country
• (UK) Labour shadow Chancellor McDonnell: Think there is a majority in Parliament for Brexit with a permanent customs union - speaking on Peston
• (UK) Dec RICS House Price Balance: -19% v -13%e; Expect next 3 months to be weakest on records dating back to 1999
• (UK) Over 100 business leaders said to favor 2nd referendum on Brexit - UK Times

Levels as of 12:50ET

• Hang Seng +0.2%; Shanghai Composite +0.2%; Kospi +0.2%; Nikkei225 -0.2%; ASX 200 +0.3%
• Equity Futures: S&P500 -0.3%; Nasdaq100 -0.3%, Dax -0.4%; FTSE100 -0.3%
• EUR 1.1378-1.1403; JPY 108.84-109.14 ; AUD 0.7150-0.7176;NZD 0.6742-0.6782
• Feb Gold -0.1% at $1,292/oz; Feb Crude Oil -0.6% at $52.02/brl; Mar Copper +0.3% at $2.68/lb

For the 24 hours to 23:00 GMT, the EUR slightly declined against the USD and closed at 1.1397, amid concerns over Euro-zone's growth outlook.

Data revealed that Germany's final consumer price index (CPI) eased 1.7% on a yearly basis in December, marking its lowest level in 8-months and meeting market expectations as well as confirming the preliminary print. In the prior month, the CPI had registered a rise of 2.3%.

In the US, data showed that the US NAHB housing market index unexpectedly rose to a level of 58.0 in January, rising for the first time in three months and supported by falling borrowing costs. Market participants had envisaged the index to record an unchanged reading. In the previous month, the index had recorded a level of 56.0. Also, the nation's MBA mortgage applications climbed to an 11-month high level of 13.5% in the week ended 11 January 2019, following an increase of 23.5% in the preceding week.

The Federal Reserve's Beige Book survey showed that the economy activity in most US districts reported a modest to moderate growth in December and early January. Further, the report indicated that labour markets tightened across the country and wages grew moderately. Additionally, the report signalled that optimism is fading among US businesses due to government shutdown, trade conflicts, higher borrowing costs and a volatile stock market.

In the Asian session, at GMT0400, the pair is trading at 1.1386, with the EUR trading 0.10% lower against the USD from yesterday's close.

The pair is expected to find support at 1.1368, and a fall through could take it to the next support level of 1.1349. The pair is expected to find its first resistance at 1.1415, and a rise through could take it to the next resistance level of 1.1443.

Going forward, traders would await the Euro-zone's construction output for November and the consumer price index for December, scheduled to release in a few hours. Later in the day, the US Philadelphia Fed business outlook for January, along with housing starts and building permits, both for December, will keep investor on their toes. Also, the US initial jobless claims will garner significant amount of investor attention.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the GBP rose 0.30% against the USD and closed at 1.2880, after British Prime Minister, Theresa May won a no-confidence vote in the parliament.

Macroeconomic data showed that UK's consumer price inflation (CPI) slowed to 2.1% on an annual basis in December, weighed down by declining fuel prices and air fares and notching its lowest level in nearly two years. In the previous month, the CPI had registered a rise of 2.3%. Moreover, Britain's house price index rose 2.8% on an annual basis in November, falling short of market expectations for an advance of 3.0%. In the prior month, the index had recorded a gain of 2.7%. Additionally, the nation's non-seasonally adjusted output producer price index (PPI) rose 2.5% on a yearly basis in December. In the previous month, the output PPI had registered a revised rise of 3.0%.

Separately, the Bank of England (BoE) Governor, Mark Carney, warned that financial markets are likely to remain volatile against the backdrop of Parliament's rejection of the British Prime Minister, Theresa May's Brexit plans.

In the Asian session, at GMT0400, the pair is trading at 1.2873, with the GBP trading 0.05% lower against the USD from yesterday's close.

The pair is expected to find support at 1.2841, and a fall through could take it to the next support level of 1.2810. The pair is expected to find its first resistance at 1.2901, and a rise through could take it to the next resistance level of 1.2930.

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the USD rose 0.56% against the JPY and closed at 109.10.

In the Asian session, at GMT0400, the pair is trading at 109.04, with the USD trading 0.05% lower against the JPY from yesterday’s close.

The pair is expected to find support at 108.58, and a fall through could take it to the next support level of 108.12. The pair is expected to find its first resistance at 109.35, and a rise through could take it to the next resistance level of 109.66.

Moving ahead, traders would keep an eye on Japan’s national consumer price index for December, slated to release overnight.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD rose 0.20% against the CHF and closed at 0.9900.

In the Asian session, at GMT0400, the pair is trading at 0.9917, with the USD trading 0.17% higher against the CHF from yesterday’s close.

The pair is expected to find support at 0.9888, and a fall through could take it to the next support level of 0.9859. The pair is expected to find its first resistance at 0.9932, and a rise through could take it to the next resistance level of 0.9947.

Amid lack of economic releases in Switzerland today, traders would focus on global macroeconomic events for further direction.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.09% against the CAD and closed at 1.3257.

In the Asian session, at GMT0400, the pair is trading at 1.3273, with the USD trading 0.12% higher against the CAD from yesterday’s close.

The pair is expected to find support at 1.3244, and a fall through could take it to the next support level of 1.3215. The pair is expected to find its first resistance at 1.3293, and a rise through could take it to the next resistance level of 1.3313.

With no macroeconomic releases in Canada today, investors would look forward to global macroeconomic releases for further directions.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the AUD declined 0.39% against the USD and closed at 0.7171.

LME Copper prices rose 0.5% or $29.0/MT to $5911.0/MT. Aluminium prices rose 1.6% or $29.0/MT to $1839.5/MT.

In the Asian session, at GMT0400, the pair is trading at 0.7165, with the AUD trading 0.08% lower against the USD from yesterday's close.

Overnight data indicated that Australia's consumer inflation expectations eased to 3.5% in January, compared to a level of 4.0% in the preceding month. Moreover, home loan approvals dropped 0.9% on a monthly basis in November, less than market expectations. Home loan approvals had climbed 2.2% in the previous month.

The pair is expected to find support at 0.7145, and a fall through could take it to the next support level of 0.7124. The pair is expected to find its first resistance at 0.7199, and a rise through could take it to the next resistance level of 0.7232.

In absence of key economic releases in Australia today, investor sentiment would be determined by global macroeconomic events.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

Daily Pivots: (S1) 108.58; (P) 108.89; (R1) 109.41; More...

Rebound from 104.69 short term bottom is extending and further rise could be seen. But we'd still expect upside to be limited by 109.46 resistance to complete the rebound from 104.69 short term bottom. On the downside, below 107.77 will turn bias to the downside for retesting 104.69 low. However, sustained break of 109.46 will dampen our view and bring stronger rebound instead.

In the bigger picture, price actions from 125.85 (2015 high) are seen as a long term corrective pattern, no change in this view. Apparently, such corrective pattern is not completed yet. Fall from 114.54 is seen as part of the falling leg from 118.65 (2016 high). Break of 104.62 will target 100% projection of 118.65 to 104.62 from 114.54 at 100.51, which is close to 100 psychological level. But in that case, we'd expect strong support from 98.97 to contain downside to bring reversal. Also, this bearish case will remain the preferred one as long as 114.54 resistance holds.

For the 24 hours to 23:00 GMT, Gold rose 0.33% against the USD and closed at USD1293.50 per ounce, amid geopolitical tensions in the US and UK.

In the Asian session, at GMT0400, the pair is trading at 1292.20, with gold trading 0.10% lower against the USD from yesterday’s close.

The pair is expected to find support at 1288.07, and a fall through could take it to the next support level of 1283.93. The pair is expected to find its first resistance at 1295.87, and a rise through could take it to the next resistance level of 1299.53.

The yellow metal is showing convergence with its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, Silver rose 0.13% against the USD and closed at USD15.63 per ounce, tracking gains in gold prices.

In the Asian session, at GMT0400, the pair is trading at 15.60, with silver trading 0.19% lower against the USD from yesterday’s close.

The pair is expected to find support at 15.52, and a fall through could take it to the next support level of 15.44. The pair is expected to find its first resistance at 15.68, and a rise through could take it to the next resistance level of 15.77.

The white metal is showing convergence with its 20 Hr and 50 Hr moving averages.