Asian Mid-session Update: Partial US Consumer Spending data released early; NZ narrows trade deficit, as oil prices rise
***Economic Data***
- (NZ) NEW ZEALAND NOV TRADE BALANCE (NZD): -0.78B V -0.81BE; Exports: 4.1B v 3.9Be; Imports: 4.9B v 4.8Be
- (MY) MALAYSIA NOV CPI Y/Y: 2.6% V 2.3%E
- (NZ) New Zealand Nov M3 Money Supply Y/Y: 8.4% v 7.7% prior
- (IN) India Nov Conference Board Leading Economic Index: -0.5% v +1.0% prior
***Index Snapshot (as of 04:30 GMT)***
- Nikkei225 closed, S&P/ASX +0.6%, Kospi +0.6%, Shanghai Composite +0.2%, Hang Seng +1.1%, Feb S&P500 -0.2% at 2,032
***Commodities/Fixed Income***
- Feb gold -0.1% at $1,072/oz, Feb crude oil +0.7% at $36.39/brl, Mar copper +0.4% at $2.11/lb
- (AR) Argentina Central Bank sells $299M in Lebac bonds with rates at 3.25-3.50%; Sells ARS28.6M in bonds with rates of 31-36%
- USD/CNY: (CN) PBoC sets yuan mid point at 6.4731 v 6.4746 prior
- USD/CNY: Offshore Yuan Hibor overnight fixing rises to record high at 9.45%
- USD/KRW: Onshore opens at KRW1,172 v KRW1,173 prior close
***Market Focal Points/FX***
Broader Asian markets noticeably more positive, following the stronger lead from US data. Oil prices saw buying, with WTI rising above Brent, the first time since a short period in Nov 2014. Excluding Nov 2014 WTI has traded at a discount to Brent since 2010. Volume remained light in the region with Japan closed for holiday and several markets to be closed later in the week. 3 IPOS in Shenzhen rose to their limits, trading well above initial IPO pricing. China continues to draw attention to plans to accelerate IPOs in 2016. Miners in Australia (BHP, +3.5%; RIO +4.9%) were supported by firmer iron ore prices. NZD/USD hit 0.6817 on improving trade deficit. The Aussie traded in a tight range against the greenback holding near its high of 0.7038.
US Bureau of Economic Analysis accidentally released November consumer spending (PCE) data early, showing that spending increased 0.3% on the month or $12.43T v $12.39T prior. Prior month's figures also indicated a downward revision to flat from the initially reported 0.1%. The full report, including the income figures and the Fed's preferred inflation measure, will be released 8:30ET Wednesday as scheduled.
China NDRC Chairman Xu Shaoshi in an interview noted that China may face more severe economic situation next year. China is facing relatively large downward pressures including Fed rate hike and a fragile economic recovery.
After the US close saw major retailer Nike report strong earnings in Q3. On the conference call Nike indicated that Q3 Rev would rise in the high single digit to low double digit range and FY16 Rev would rise to higher mid-single digit percent. This gave Nike an afterhours boost of 2.4%. Bed Bath and Beyond revised their Q3 guidance lower sending it over 6% lower afterhours.
***Equities***
US equities / ADRs:
- CELG: Settles REVLIMID patent litigation with Allergan unit; +5.8% afterhours
- CHD: To be added to S&P 500 Index; SNX promoted to S&P400, and GBX to enter S&P600 after the close of trading on Dec 28th; +2.5% afterhours
- NKE: Reports Q2 $0.90 v $0.85e, R$7.7B v $7.81Be; +2.4% afterhours
- MU: Reports Q1 $0.24 v $0.23e, R$3.35 v $3.52Be; Guides Q2 -$0.12 to -$0.05 v +$0.22e, Rev $2.9-3.2B v $3.47Be - presentation slides; -5.8% afterhours
- BBBY: Cuts Q3 guidance $1.07-1.10 v $1.18e (prior $1.14-1.21), Narrows Rev $3.0B v $3.03Be (prior $2.99-3.06B); -6.3% afterhours
Notable movers by sector:
- Consumer discretionary: CJ CGV Co 079160.KR +1.2%, Wanda Cinema 002739.CN -0.4% (denies on stock swap speculation); Slater & Gordon SGH.AU -6.1% (clarification)
- Financials: Guotai Junan International Holdings 1788.HK +8.4% (Chairman returns to work); Haitong Securities 6837.HK +2.8% (terminates share buyback); Bank of Zhengzhou 6196.HK +1.0 % (IPO debut)
- Industrials: China Railway Group 390.HK +1.0% (cooperation with local govt)
China State Construction Engineering 601668.CN +0.8% (signs agreement); Posco 005490.KR +3.5% (agreement to jointly develop technology); Aurizon Holdings AZJ.AU -11.3% (impairment changes in H1)
- Technology: Siliconware Precision Industries 2325.TW +4.4%, Advanced Semiconductor Engineering 2311.TW +5.2% (ASE's new offer)
- Materials: Orocobre ORE.AU +0.8% (guidance); Atlas Iron AGO.AU +5.9% (signs restructuring support agreement)
- Healthcare: Greencross Limited GXL.AU +0.8% (TPG plans to raise stake)
- Utilities: DUET Group DUE.AU +0.4% (guidance)