Asian Market Update: PBoC liquidity injection briefly restores calm before explosions in Indonesia renew risk-off; Australia posts modest employment decline; BOK on hold again
***Economic Data***
- (AU) AUSTRALIA DEC EMPLOYMENT CHANGE: -1.0K (first decline in 3 months and largest decline in 8 months) V -10.0KE; UNEMPLOYMENT RATE: 5.8% V 5.9%E
- (JP) JAPAN NOV MACHINE ORDERS M/M: -14.4% (biggest decline since May 2014) V -7.3%E; Y/Y: 1.2% V 6.3%E
- (JP) JAPAN DEC PPI M/M: -0.3% (7th straight decline) V -0.4%E; Y/Y: -3.4% (9th straight decline) V -3.5%E
- (NZ) NEW ZEALAND DEC RETAIL CREDIT CARD SPENDING M/M: -0.2% (first decline in 8 months) V +0.5%E; TOTAL M/M: 0.1% V 0.2% PRIOR
- (NZ) New Zealand Dec ANZ Truckometer Heavy M/M: 2.6% v 0.4% prior
***Index Snapshot (as of 04:30 GMT)***
- Nikkei225 -4.1%, S&P/ASX -1.7%, Kospi -1.6%, Shanghai Composite -1.1%, Hang Seng -1.6%, Mar S&P500 flat at 1,882
***Commodities/Fixed Income***
- Feb gold flat at $1,094/oz, Feb crude oil flat at $30.53/brl, Mar copper +0.5% at $1.96/lb
- GLD: SPDR Gold Trust ETF daily holdings rise 2.4 tonnes to 654.1 tonnes; highest since Dec 1st
- (CN) PBOC to inject CNY160B in reverse 7-day repos, multi-month high; For the week, net injection of CNY40B v CNY190B in prior week
- USD/CNY: *(CN) PBOC SETS YUAN MID POINT AT 6.5616 V 6.5630 PRIOR; 5th straight firmer setting relative to Close
- (HK) Offshore overnight yuan HIBOR 3.6% (1-week low) v 8.3% yesterday
- (JP) BOJ offers to buy ¥400B in 1-3yr JGBs, ¥420B in 3-5yr JGBs, and ¥450B in 5-10yr JGBs
***Market Focal Points/FX***
- Asian equity markets started the day under pressure, taking cue from a steep selloff on Wall St, saw some brief calm around the time of the China open, and then sold off again in the afternoon hours on geopolitical worries. PBoC's daily open market operations saw a multi-month high net injection in 7-day reverse repos, and the central bank also set Yuan fix higher for the 5th straight day. Late-day turbulence arrived with reports of 6 explosions in Jakarta, Indonesia near UN and embassies that also coincided with reports of police activity at the Sydney Opera House. Nikkei225 decline exceeded 4% amid continued strength in JPY - USD/JPY tested below 117.30 several times in the session. Other USD majors also saw similar risk-off flows - AUD/USD and NZD/USD fell 40pips below 0.6920 and $0.6470 respectively. Electronically-traded Copper was also volatile, plunging to multi-year lows of $1.94 before a late-day bounce.
- In key economic data, Australia employment change saw a more modest decline than expected while unemployment rate stayed at multi-month low of 5.8%. Participation rate declined, but analysts noted the figures were generally more positive than expected and should keep RBA on the sidelines. Japan's Machine Orders data registered their first m/m decline since May 2014, while PPI remained in the red.
- As of writing, 3 civilians and 3 police officers were killed in suicide bombings in Jakarta, Indonesia. No group has taken responsibility as of yet, though there were other reports of a 2nd wave of explosions taking place. Jakart Composite was down nearly 2% amid attacks.
- Bank of Korea left rates on hold at 1.5% as widely expected, but cut 2016 GDP and CPI forecasts - GDP target cut to 3.0% from 3.2% and CPI to 1.4% from 1.7%. BOK Gov Lee said that lower GDP target would not necessarily warrant more policy easing, but CPI movements could produce further action. In accompanying statement, BOK also said it would monitor China and Fed policy changes but it still expects economy to recover.
***Equities***
US equities / ADRs:
- MTN: Reports season to date lift ticket ski metrics +19.4% y/y; Expect to exceed prior FY16 Resort Reported EBITDA guidance; +3.3% afterhours
- EXR: To be added to S&P500, replacing CB; +2.0% afterhours
- CLC: Reports Q4 $0.74 adj v $0.72e, R$372.5M v $380Me; +1.6% afterhours
- GPRO: Reports prelim Q4 R$435M (incl $21M reduction) v $513Me; Guides FY15 R$1.6B v $1.7Be; Cuts 7% of workforce; -24.6% afterhours; AMBA -10.4%; FIT -2.8%
After Extended Session:
- WBMD: Said to be in talks to sell parts or all of its business - FT
- TWX: Apple said to be keeping a close watch on possible Time Warner spin off - NY Post
Key movers in Asia:
- INFO.IN +4.1%; Reported Q3
- Australia gold miners NCM +4.2%, NST +6.0%, EVN +6.1% on higher gold prices
- Bic Camera 3048.JP +3.4%; Reported Q1
- Nikon 7731.jp +2.9%; Only gainer on Nikkei225 on Macquarie upgrade
- Skyworth Digital 751.HK +1.2% on transaction
- RIO -1.6%; CEO Walsh has told employees that wages will be frozen in 2016 - financial press;
- China Resource Cement 1313.HK -1.9%; profit warning
- Sumitomo 8053.JP -7.0%; Withdraws FY15/16 forecasts. expect ¥77B impairment loss on AMBAT
- STO.AU -7.4%: JPMorgan Chase and Co Initiates STO.AU with Underweight