Asian Mid-session Update: PBoC sets Yuan at new 4-year low; Sharp rallies on reports
***Economic Data***
- (JP) Japan Oct Conference Board Leading Economic Index (LEI) -0.2% v -0.7% prior; 4th straight month of decline
- (KR) South Korea Oct Conference Board Leading Economic Index (LEI) +0.5% v +1.3% prior
- (NZ) NEW ZEALAND DEC ANZ CONSUMER CONFIDENCE INDEX: 118.7 V 122.7 PRIOR; M/M: -3.3% V +6.8% PRIOR
- (NZ) NEW ZEALAND NOV FOOD PRICES M/M: -0.2% V -1.2% PRIOR; 4th straight decline
- (NZ) NEW ZEALAND NOV BUSINESS MANUFACTURING PMI: 54.7 V 53.2 PRIOR
- (NZ) New Zealand Nov Non-resident bond holdings: 67.9% v 68.8% prior
- (KR) South Korea Nov Import Price Index M/M: -1.7% v -3.1% prior; Y/Y: -15.6% v -14.9% prior
- NPD: Nov US total video game sales $2.5B, +2% y/y
- (PE) PERU CENTRAL BANK (BCRP) RAISES REFERENCE RATE BY 25BPS TO 3.75%, AS EXPECTED
***Index Snapshot (as of 04:30 GMT)***
- Nikkei225 +1.0%, S&P/ASX -0.2%, Kospi -0.2%, Shanghai Composite -0.9%, Hang Seng -0.7%, Dec S&P500 +0.2% at 2,052
***Commodities/Fixed Income***
- Feb gold -0.5% at $1,066/oz, Jan crudes oil -0.6% at $36.54/brl, Mar copper +0.8% at $2.08/lb
- (AU) ANZ: Average price for iron ore to fall a further 22% in 2016 to $44/tonne - SMH
- (CN) China aluminum smelters reach agreement to halt capacity increase for at least a year - Chinese press
- USD/CNY: (CN) PBoC sets yuan mid point at 6.4358 v 6.4236 prior; weakest Yuan setting since Aug 2011
- (JP) BOJ offers to buy ¥70B in JGBs with maturity less than 1-yr, ¥350B in 1-3yr JGBs, ¥350B in 3-5yr JGBs
- (AU) Australia MoF (AOFM) sells A$600M in 1.75% 2020 Bonds; avg yield: 2.3840%; bid-to-cover: 3.01x
- (US) Weekly Fed Balance Sheet Total Assets for week ending Dec 9th: $4.48T v $4.48T prior; M1 6.6% v 6.6% prior; M2 y/y change: 6.1% v 6.1% prior
***Market Focal Points/FX***
- Asia stocks were mixed once again in the final trading session of the week before the focus turns to next week's FOMC decision. Snapback rally in the greenback, particularly against the yen, is supporting Nikkei225 with USD/JPY rising some 60pips above 122.20. AUD/USD was down about 40 pips below 0.7220. In other FX majors, EUR/USD traded down about 20pips below 1.0930 while NZD/USD is consolidating overnight gains above 0.6760.
- China markets are underperforming despite the rally on Wall St as investors look ahead to the weekend release of November retail sales, industrial output, and urban investment. Conspicuous disappearance of billionaire co-founder and chairman of the conglomerate Fosun Group is weighing on sentiment, with speculation of another high-profile graft case. Macau gaming names were also softer after reports that China would crack down on illegal use of UnionPay transaction devices. China currency also remained in focus after PBoC continued to weaken the exchange rate setting to a new 4-year low. On the bright side, a survey out of CLSA saw over 60% of China consumers as optimistic about 2016 prospects for economic growth.
- In Japan, shares of Sharp were much higher in afternoon trade on reports of a potential injection from Japanese banks. Recall overnight there were reports of INCJ in talks to acquire company's LCD business. In notable Japanese press, LDP and Komeito reportedly finalized a cut in corporate tax rate below 30% for next fiscal year. Japan Fin Min Aso indicated there were no plans to delay Apr 2017 increase in consumption tax, even as the govt continues to look for an estimated ¥600B to exclude food from the tax hike. Separately, a local press survey estimated average Japan winter bonus to rise about 3.3%, marking the 3rd straight year of increase.
***Equities***
US equities / ADRs:
- FNSR: Reports Q2 $0.25 (adj) v $0.23e, R$321M v $314Me; +14.8% afterhours
- SUNE: J.P. Morgan Asset Management-SunEdison strategic partnership acquires 333 MW of wind-power plants; +7.8% afterhours
- ADBE: Reports Q4 $0.62 v $0.60e, R$1.31B v $1.31Be; +5.2% afterhours
- NSC: Berkshire Hathaway unit BNSF said to consider a higher bid for NSC than Canadian Pacific - financial press; +4.4% afterhours
- PYPL: Launches merchant pilot program with Wholesaler, Alibaba's B2B site; +1.7% afterhours
- UTX: Raises low end FY15 EPS $6.20-6.30 v $6.25e (prior $6.15-6.30); guides initial FY16 EPS $6.30-6.60 v $6.54e, R$56-58B v $58.5Be; +1.7 %afterhours
- RH: Reports Q3 $0.65 v $0.63e, R$532M v $540Me; raises outlook; -1.3% afterhours
Notable movers by sector:
- Consumer discretionary: Belle International Holdings 1880.HK -5.7% (Q3 result); Goodman Group GMG.AU +0.3% (property valuation gains); Sekisui House 1928.JP -4.1% (9-month result); Dr Ci:Labo Co 4924.JP -9.7% (Q1 result); Sands China 1928.HK -1.9%, Galaxy Entertainment Group 27.HK -1.7% (China to crack down illegal Unionpay POS)
- Financials: Dalian Wanda Commercial Properties 3699.HK -2.6% (Nov result)
China Minsheng Banking Corp 1988.HK -1.7% (Fosun-linked)
- Industrials: Nissan Motor Co 7201.JP +1.2% (speculation to raise stake in Renault)
- Technology: Taiwan Semiconductor Manufacturing Co 2330.TW -0.4% (Nov result); Quanta Computer 2382.TW -3.6% (Nov result); Acer Inc 2353.TW -0.9% (Nov result); Hon Hai Precision Industries 2317.TW +0.5% (Nov result); Sharp Corp 6753.JP +4.0% (may get additional financial support)
- Materials: Aluminum Corporation of China 2600.HK -0.9% (agrees not to raise capacity); Perseus Mining PRU.AU +3.0% (adjusts guidance); Showa Denko 4004.JP +0.7% (earnings target); BC Iron BCI.AU-21.1% (JV suspends DSO operations)
- Healthcare: Shandong Weigao Group Medical Polymer 1066.HK -3.6% (Fosun-linked)