Asian Mid-session Update: Japan approves FY15 budget; Shanghai equities traded lower
***Economic Data***
- (AU) AUSTRALIA DEC ANZ JOB ADS M/M: 1.8% V 0.7% PRIOR; 7th consecutive increase
- (AU) AUSTRALIA NOV HOME LOANS M/M: -0.7% V +1.7%E
- (AU) AUSTRALIA NOV CREDIT CARD BALANCES: A$50.5B v A$49.6B PRIOR; CREDIT CARD PURCHASES: A$22.7B v A$24.4B PRIOR
***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 closed, S&P/ASX -0.8%, Kospi -0.3%, Shanghai Composite -2.1%, Hang Seng +0.1%, Mar S&P500 -0.1% at 2,033
***Commodities/Fixed Income***
- Feb gold +0.8% at $1,226, Feb crude oil -1.4% at $47.68/brl, Mar Copper flat at $2.75/lb
- USD/CNY: (CN) PBoC sets yuan mid point at 6.1233 v 6.1296 prior setting
- USO: Soc Gen cuts 2015 WTI Crude forecast to $51/bbl from $65/bbl previous forecast
- USO: Goldman Sachs cuts 2015 WTI Crude oil to $47.15/bbl from $73.75/bbl previous forecast
- USD/CNY: (CN) PBoC official Wang: PBoC to intervene if fx moves out of range - Caixin
- USD/CNY: Standard Chartered revises forecast to 6.12 by end of 2015
***Market Focal Points/Key Themes/FX***
- Japan Cabinet office raised Japan FY15 real GDP forecast to 1.5% (as expected) from 1.4% previously forecasted, also forecasted CPI at 1.4%. Later in the day, Japan Finance Minister Aso officially announced approval of ¥96.3T budget for FY15, in line with press speculation earlier today. Japan forecasted FY15 tax revenues to be ¥54.5T, while forecasted Finance Ministry bond sales to drop to ¥36.9T, both in line with expectations. Dollar/Yen traded little changed today around ¥118.30 level, while Japan equity markets were closed for holiday.
- Over the weekend, Fitch cut Russia's sovereign rating by one notch to BBB- with negative outlook, citing sharp falls in oil prices and the ruble, with a steep rise in interest rates. Fitch noted growth may not return in Russia until 2017. Crude oil continued to fall in today's session. WTI crude dropped to as low as $47.50/bbl, while Brent oil at just above $49/bbl. In terms of the Shanghai equity market, A-shares continued to decline today by another 2.1%, to the worst level so far in the year.
- Australia posted November home loans data at -0.7% m/m, missing consensus of +1.7%. December ANZ job advertisements came in at +1.8% m/m, higher than prior reading of +0.7%, marked 7th consecutive increase. Aussie/Dollar traded higher later in the session to about $0.8250 level.
***Equities***
US markets:
- NPSP: Shire to Acquire NPS Pharma for $46/shr in cash, deal valued at $5.2B
- LORL: Sources say talks to sell itself to Ontario Teachers pension fund have broken off - NY Post
- SEM: Guides initial FY15 $0.84-0.90 v $0.97e, R$3.1-3.2B v $3.17Be
- HCA: Raises FY14 EBITDA to $7.4B, above prior guidance range of $7.25-7.35B
- BURL: Guides Q4 higher to $1.30-1.32 v $1.28e, Rev +9.6-10.1% ($1.25-1.28, Rev +7.2-8.2% prior), SSS +5-5.5%; Announces retirement of CFO, effective Jan 12
- BABA: Reportedly to pay over $550M for a stake in an Indian online shopping company - press
Notable movers by sector:
- Financials: Cheung Kong Group 1.HK +14.6%, Hutchison Whampa 13.HK +12.4% (restructuring plan); Everbright Securities 601788.CN +3.6% (Dec Op results); GF Securities 000776.CN +1.2% (prelim 2014 results); China Merchants Property Dev 000024.CN -4.2% (lower despite strong Dec results); China Merchants Land 978.HK -5.4% (profit warning)
- Materials: Shanghai ANOKY Textile Chem 300067.CN +3.1% (FY14 guidance)
- Energy: Guodian Technology & Environment Group 1296.HK -16.9% (profit warning); Sundance Energy SEA.AU -3.0%, Drillsearch Energy DLS.AU -1.4% (WTI crude lower)