Asian Mid-session Update: Shanghai recovers after 3 days of correction; BOJ released Nov 18-19 minutes
***Economic Data***
- (JP) JAPAN NOV PPI SERVICES Y/Y: 3.6% V 3.5%E
***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 -0.4%, S&P/ASX closes, Kospi closes, Shanghai Composite +2.4%, Hang Seng closes, Mar S&P500 flat at 2,078
***Commodities/Fixed Income***
- Feb gold -0.2% at $1,175, Feb crude oil -1.2% at $55.85/brl, Copper -0.6% at $2.85/lb
- USD/CNY: Yuan may depreciate in 2015 if USD strengthens - Chinese press
- (CN) PBoC won't conduct open market operations (OMO) in today's session (9th consecutive halt); Net zero position this week (2nd week of neutral position)
- USD/CNY: (CN) PBoC sets yuan mid point at 6.1213 v 6.1247 prior setting
- JGB: (JP) Japan MoF sells ¥2.51T in 0.1% 2-yr notes, Avg Yield: -0.003% v 0.005% prior; bid to cover: 5.66x v 5.86x prior
***Market Focal Points/Key Themes/FX***
- After three days of correction in Shanghai Composite, today equities in China recovered 2.4% during the morning session, rising back above 3,000 level. Financials were leading the gains today, as PBoC said to not ask for deposit reserves on inter-institution deposits. Brokers, banks, and insurance companies all moved higher after the news.
- Bank of Japan released Nov 18-19 minutes, which was the first meeting after BOJ surprised markets with additional easing. Many members agreed that QQE is showing intended effects, but also saying downward pressure on CPI continued. Some members showed worries that core CPI may decline below 1.0% temporarily due to low oil price. Yen moved strong by about 15pips after BOJ released minutes. Later on today, BOJ governor Kuroda commented from Tokyo, reiterating Japan inflation expectations rising as a whole, and firms are more active in spending and hiring. Kuroda also reiterated central bank will not hesitate to make adjustments if any needed. Yen little changed after those comments.
***Equities***
US markets:
- HZNP: Files patent infringement lawsuit against Watson Laboratories, Inc. for filing an ANDA against PENNSAID
- ACT: Confirms Complete Response Letter for Nebivolol/Valsartan Fixed-Dose Combination for Hypertension
- GLN.CA: Rogers to withdraw its injunction application to block Bell acquisition; Bell to sell 50% stake in Glentel to Rogers
Notable movers by sector:
- Consumer Discretionary: Japan Airlines Corp 9201.JP -3.9% (to pay FY15 tax on change in tax program)
- Financials: Huaxia Bank 600015.CN +10.0%, Minsheng Bank 600016.CN +3.9% (PBoC scraps reserve requirement for inter-financial deposits)
- Energy: Kansai Electric Power 9503.JP -4.8% (no decision on scrapping reactors)
- Industrials: Sany Heavy Equipment 600031.CN +10.0% (awarded contract)
- Telecom: Japan Communications 9424.JP +7.4% (to enter smartphone business)