Asian Mid-session Update: China HSBC final Manufacturing PMI confirms first contraction in 7 months
***Economic Data***
- (CN) CHINA DEC FINAL HSBC MANUFACTURING PMI: 49.6 V 49.5E (first contraction in 7 months)
- (AU) AUSTRALIA NOV PRIVATE SECTOR CREDIT M/M: 0.5% V 0.5%E; Y/Y: 5.9% (5-year high) V 5.9%E
- (KR) SOUTH KOREA DEC CPI M/M: 0.0% (first non-negative print in 4 months) V 0.0%E; Y/Y: 0.8% (lowest since Oct 2013) V 0.9%E; CPI CORE Y/Y: 1.6% V 1.6%E
- (SG) SINGAPORE NOV BANK LOANS AND ADVANCES: 7.5% V 9.0% PRIOR
- (SG) SINGAPORE NOV M1 Y/Y: 4.6% V 4.0% PRIOR; M2 Y/Y: 2.5% V 2.0% PRIOR
***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 closed, S&P/ASX -0.1%, Kospi closed, Shanghai Composite +0.7%, Hang Seng +0.2%, Mar S&P500 +0.1% at 2,078
***Commodities/Fixed Income***
- Feb gold +0.1% at $1,201, Feb crude oil -0.6% at $53.80/brl, Mar Copper flat at $2.85/lb
- GLD: SPDR Gold Trust ETF daily holdings fall 1.5 tonnes to 712.3 tonnes; Lowest level since Sept 2008
- (US) API PETROLEUM INVENTORIES: CRUDE: +0.76M (smallest build in 4 weeks) v -0.5Me, GASOLINE: +1.7M v +1.5Me, DISTILLATE: +0.31M v +1.5Me
***Market Focal Points/Key Themes/FX***
- Trading conditions are particularly light in the final session of 2014. In Japan, Nikkei225 was already closed for holidays after registering its 3rd consecutive year of gains, while Korea was also closed and Australia was out early. A press report out of Japan speculated the govt issuance of JGBs in FY15 would fall to ¥37T, below ¥41.3T budgeted for this year and below ¥40T for the first time in 6 years. In Korea, central bank Gov Lee pledged to keep monetary policy accommodative in 2015, even as Fin Min Choi forecasted next year's economic performance to improve due to lower oil price and govt policies. Australia put out its November private sector lending, showing a 5-year high rate of increase y/y at 5.9%. Housing credit growth was particularly impressive, rising another 0.6% on the month, while personal and business credit components both rose 0.2%.
- Shanghai Composite was an outperformer in the early going and only added to its gains in the afternoon session with a near 2% rally retesting the 3,200 level. China HSBC final manufacturing PMI for December confirmed the first contraction in 7 months but also fared a 0.1pt better than expected, supporting the mainland index while also boosting AUD/USD to session high above 0.82. HSBC economist Qu remarked that price contraction deepened, and coupled with weaker economic activity, stronger disinflationary pressures warrant further monetary easing in the coming months. Separately, a Chinese press report reiterated 2015 GDP target could be formally set at 7% and 2016 below 7%. In the property space, a research note out of China Academy of Social Sciences (CASS) forecasted 2015 property price decline of another 5%.
***Equities***
US markets:
- NRX: Announces Positive Results for QT Study of Pyridorin; +118.3% afterhours
- MIG: Fosun to Acquire Meadowbrook Insurance Group for $433M; +18.5% afterhours
- HNH: Submits proposal to acquire JPS Industries (ticker: JPST) For $10.00/shr in cash; +1.4% afterhours
Notable movers by sector:
- Industrials: CSR 1766.HK +29.3%, CNR 6199.HK +42.8% (CSR, CNR to merge; resume trading)