Asia Mid-Session Market Update: China official PMIs slow but remain in expansion; Bulk of Asia indices remain closed for holiday
***Friday US markets on close: Dow -0.3%, S&P500 -0.5%, Nasdaq -0.9%***
- At the close: VIX 14.0 (+0.7pts); Treasuries: 2-yr 1.20% (-2bps), 10-yr 2.45% (-3bps), 30-yr 3.06% (-2bps)
- Best Sector in S&P500: Financials
- Worst Sector in S&P500: Technology
***Weekend US Corporate Headlines***
- DEPO: KKR remains interested in acquiring Depomed - NY Post
- TSLA: Tesla Model X owner files suit in California, claiming the SUV suddenly accelerated while parked - press
- DIS: "Rogue One" remained the top film at the N America box office with $49.7M (3rd consecutive week)
***Politics***
- (US) Incoming White House Press Sec Spicer: Trump plans to repeal many of Obama's regulations and executive actions on his first day in office - US press
- (KR) South Korea impeached President Park denies any wrongdoing, plays down aides influence and says she was "totally framed"
***Key economic data:***
- (CN) CHINA DEC MANUFACTURING PMI (GOVT OFFICIAL): 51.4 V 51.5E (5th consecutive month of expansion); Non-manufacturing PMI: 54.5 v 54.7 prior
- (HK) Macau Dec Casino Rev 19.8B Patacas v 18.8B m/m, +8% y/y (5th consecutive increase) v 14.4% prior; 2016 Casino Rev 223.2B Patacas, -3.3% y/y
- (KR) SOUTH KOREA DEC PMI MANUFACTURING: 49.4 V 48.0 PRIOR (5th consecutive contraction)
- (KR) SOUTH KOREA DEC TRADE BALANCE: $7.0B V $7.1BE
***Asia Session Notable Observations, Speakers and Press***
- Korea's Kospi the only major market open in the first trading session of the year; US and Europe remain closed in extended New Years holiday; FX majors also in extremely narrow ranges.
- China Dec official manufacturing PMI posts 5th straight expansion, though slower than expected; New export orders in expansion for 2nd straight month; Employment component remains in contraction at 48.9 v 49.2 m/m; Input prices at multi-month highs of 69.6 v 68.3 m/m.
- PBoC chief economist notes the new rules on cash transactions and overseas transfers are not capital controls after Chinese central bank increased controls on individuals' FX purchases to convert up to the equivalent of $50K. Recall late last week, PBoC also requested that banks report yuan trading over CNY50K vs CNY200K previously.
- South Korea PMI posts its 5th straight contraction as employment declined at fastest rate in over 2 years, even as new export orders improved for the first time in 5 months. Earlier, South Korea trade balance was in line with expectations, with exports rising for the 2nd straight month by +6.4% v 4.6%e.
China:
- (CN) China Stats Bureau: Manufacturing PMI slowed due to environmental protection measures, but expansion in high-technology and consumer goods sectors accelerated - Chinese press
- (CN) China PBoC chief economist Ma Jun: New rules on cash transactions and overseas transfers are not capital controls - Chinese press
- (CN) China President Xi calls for more efforts on construction of free trade zones (FTZ) - China Daily
- (CN) Hundreds of flights in China were cancelled and many highways shut on Jan 1st due to heavy smog conditions - Chinese press
Japan:
- (JP) Japan Center for Economic Research (JCER): Nov GDP estimated at +0.4% m/m; 3rd consecutive increase - Nikkei
- (JP) Japan Coast Guard: Four China vessels entered into disputed waters near Senkaku islands - press
***Asian Equity Markets/Futures (23:30ET)***
- Nikkei225 closed, S&P/ASX closed, Kospi +0.2%, Shanghai Composite closed, Hang Seng closed
- Equity Futures: S&P500 closed, Dax closed, FTSE100 closed
***FX ranges/Commodities/Futures/Fixed Income (23:30ET):***
- EUR 1.0515-1.0525; JPY 116.70-116.85; AUD 0.7200-0.7220; NZD 0.6915-0.6925
- Feb gold closed, Feb crude oil +0.2% at $53.90/brl, Mar copper closed
- GLD: SPDR Gold Trust ETF daily holdings fall 1.2 tonnes to 822.2 tonnes; 25th straight decline; Lowest since Apr 29th
- (KR) South Korea sells 3-year bonds; avg yields 1.635%