Asia Market Update: Broad dollar weakness on the 1st day of trade in 2018, Won surges, Manufacturing PMIs mixed
***Headlines/Economic Data***
General Trend: Equity markets (ex-Japan) open 2018 generally higher, led by China and Hong Kong
-Singapore Q4 GDP above estimates (first major Asian economy to issue Q4 GDP data)
- China Dec Caixin PMI Manufacturing rises to highest level since Aug 2017
- Taiwan Dec Manufacturing PMI hits multi-year high
-Asian currencies gain: Korean Won (KRW) trades at highest level since Oct 2014; Singapore Dollar (SGD) hits highest since mid-2016; Taiwan Dollar (TWD) continues to trade at over 4 year highs
Japan
-Nikkei 225 closed for holiday
Looking ahead: Japan to be closed for holiday on Wednesday
Korea
-Kospi opened +0.3%
- KRW rises to 3-yr high against USD, attributed to exporters selling dollars
-(KR) South Korea Unification Min Cho: confirms have offered high ranking talks with North Korea on Jan 9th
- (KR) South Korea Dec PMI Manufacturing: 49.9 v 51.2 prior
-(KR) South Korea Finance Chief: Reiterates to take steps on drastic fx moves
- (KR) Bank of Korea Gov: Further interest rate hikes should not be related to retirement of BoK Gov, but instead based on economic indicators
-(KR) South Korea President Moon: To put policy in focus on jobs and household income
-(KR) South Korea sells KRW1.0T in 3-month monetary stabilization bonds at 1.55%
- 005380.KR (Hyundai Motor) Vice Chairman: 2017 was the hardest year due to China sales slump; expect car demand to slow in major markets; -3% at the open
- 000270.KR (Kia Motor) Guides 2018 vehicles sales 2.88M units; Sees rising uncertainties including strong Korean Won (KRW) and geopolitical risks; -1.6%
035250.KR (Kangwon Land): To reduce casino operating hours and table facilities; -10.6%
-090430.KR (Amore Pacific): +2.5%: China govt lifts ban on group tours to South Korea, according to a South Korean press report
China/Hong Kong
-Hang Seng opened +0.4% before rising over 1% above 30,000; Shanghai Composite +0.2%
Hang Seng Property Index +2.8%: China may not adopt a property tax until 2020, said an earlier released Chinese press report.
- (CN) CHINA DEC GOVT OFFICAL MANUFACTURING PMI: 51.6 V 51.6E; NON-MANUFACTURING: 55.0 V 54.7E
- (HK) Macau Dec Gaming Rev +14.6% v ~20%e; Hang Seng Services Index -2% (weighed down by gaming stocks, Wynn Macau -3.5%, MGM China -3.5%)
- (CN) PBoC: Skips OMO for 7th straight session; Net drains CNY290B
- (CN) PBOC Gov Zhou reiterates prudent monetary policy and reasonable loan growth in 2018 – press
-(CN) CHINA DEC CAIXIN PMI MANUFACTURING: 51.5 V 50.7E (highest reading since Aug 2017)
- USD/CNY (CN) China PBoC sets yuan reference rate at 6.5079 v 6.5342 prior (strongest level since Sept 11th)
-(HK) Overnight HK$ HIBOR -66bps (most since Nov 1st); 1-week HIBOR -47bps (most since Oct 2008)
-54.HK Sells 66.69% stake in Hopewell Highway Infrastructure
Australia/New Zealand
-ASX 200 opened flat, trading slightly lower with little direction; closed -0.2%
- (AU) Australia Dec CoreLogic House Price Index M/M: -0.4% v -0.1% prior
-(AU) Analysts caution that the risk of a rise in Australian inflation has not been adequately priced in - AFR
- BLK.AU To raise A$36M through entitlement offering; to defer repayment of term loan to Jan 15th 2018; Names Milan Jerkovic as Executive Chairman as part of recapitalization plan
Other Asia
- (SG) SINGAPORE Q4 ADVANCED GDP SAAR Q/Q: 2.8% V 1.6%E; Y/Y: 3.1% V 2.6%E; 2017 GDP: 3.5% v 2.0% prior v 3.0-3.5% official target
North America
- (US) Democrats in high-cost, high-tax states are devising ways to blunt the impact of the recently passed tax law’s clampdown on the state and local tax (SALT) deduction – press
Looking ahead: US Weekly API Crude Oil Inventories to be released on Tuesday
Europe
- (ES) Spain Econ Min sees Catalonia crisis cost at €1.0B
-(UK) Economists see UK 2018 GDP growth of no more than 1.5% vs 1.4% forecast of the Office for Budget Responsibility (OBR) – FT Poll; The economists expect the BoE to raise rates by 50bps in 2018.
Looking Ahead: UK Dec Manufacturing PMI to be released
***Levels as of 01:00ET***
- Nikkei225 closed, Hang Seng +1.7%; Shanghai Composite +1.0%; ASX200 -0.1%, Kospi +0.3%
- Equity Futures: S&P500 +0.2%; Nasdaq100 +0.2%, Dax untraded; FTSE100 -0.1%
- EUR 1.2023-1.2004; JPY 112.79-112.58; AUD 0.7843-0.7795;NZD 0.7122-0.7058
- Feb Gold -0.0% at $1,309/oz; Feb Crude Oil +0.3% at $60.62/brl; Mar Copper -0.5% at $3.28/lb