Asian Mid-session Update: Mixed sentiment awaits CPI from Eurozone, DOE inventories, and ADP jobs in US
***Economic Data***
- (CN) China Dec Westpac Consumer Confidence index: 112.5 v 111.0 prior
- (AU) AUSTRALIA DEC AIG PERFORMANCE OF SERVICES INDEX: 47.5 V 43.8 PRIOR (10th month of contraction)
- (NZ) NEW ZEALAND DEC ANZ COMMODITY PRICE M/M: -4.4% V -1.6% PRIOR (9th consecutive decline)
- (MY) MALAYSIA NOV TRADE BALANCE (MYR) 11.1B V 4.9BE
- (UK) UK DEC BRC SHOP PRICE INDEX Y/Y: -1.7% V -1.8%E (19th consecutive decline)
***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 +0.4%, S&P/ASX -0.1%, Kospi +0.2%, Shanghai Composite flat, Hang Seng +0.7%, Mar S&P500 +0.3% at 2,000
***Commodities/Fixed Income***
- Feb gold -0.4% at $1,214, Feb crude oil flat at $47.94/brl, Mar Copper flat at $2.76/lb
- (US) API PETROLEUM INVENTORIES: CRUDE: -4.0M (first draw in 4 weeks) v +0.5Me, GASOLINE: +6.9M v +3Me, DISTILLATE: +9.1M v +2.5Me
- GLD: SPDR Gold Trust ETF daily holdings fall 3.0 tonnes to 707.8 tonnes; Lowest level since Sept 2008
- SLV: iShares Silver Trust ETF daily holdings fall to 10,216 tonnes from 10,245 tonnes priors (lowest since Aug 19th)
- USD/CNY: (CN) PBoC sets yuan mid point at 6.1269 v 6.1256 prior setting (weakest Yuan setting since Dec 7th)
- (JP) BOJ offers to buy ¥400B in 1-3yr JGB, ¥400B in 3-5yr JGB and ¥400B in 5-10yr JGB as well as ¥2.5T in T-bills
- (PH) Philippines sells $2B in 25-yr global priced at par, with 3.95% coupon (vs yield guidance of 4.20%)
***Market Focal Points/Key Themes/FX***
- The 5th straight day of selling in the US equity markets abated going into the close, and sentiment is decidedly more mixed in Asia while SP500 futures are pointing to a bounce. Oils prices fell sharply again in US hours, however API petroleum inventories surprised with a draw in crude for the first time in 4 weeks as the focus turns to Wednesday's DOE data. Likewise, the stampede into the US fixed income could take a breather in the event of a strong ADP jobs numbers. Perhaps even more notable, European flash CPI is particularly crucial if it falls into the negative for the first time in 5-years, bolstering expectations of a more aggressive policy response from the ECB. Dollar majors were contained to narrow ranges ahead of these key risk events, with EUR/USD around $1.1880 after an early session test of $1.1850 and USD/JPY around ¥118.80 after a brief rally above ¥119.
- In China, a local press report noted iron ore inventories fell for the 6th straight week and now sit at a 6-month low. This is in line with overnight trade data out of Australia that showed iron ore shipments rise 25% m/m. Economists with Standard Chartered speculated Dec CPI would hit fresh multi-year lows of 1.2% after falling to a 5-year low of 1.4% in November.
- Australia's AiG Services PMI remained in contraction for the 10th month but came off the lows, as "conditions deteriorated slower". Nonetheless, PSI figures suggest growth in Australian demand for goods and services "is likely to be very weak in the December quarter." AUD/USD traded as low as $0.8055, down about 40pips from the highs.
- Korean govt think tank KDI noted recent economic indicators point to a slowing of economy, as CitiGroup researchers speculated the BOK might come in with another easing at its November decision. Korea Fin Min Choi was more upbeat, stating that lower oil prices are helping and that domestic investment is on the mend.
***Equities***
US markets:
- JCP: Reports Nov-Dec Holiday SSS +3.7%, Narrows Q4 SSS guidance "at the upper end of its previous range of 2-4%"; +17.5% afterhours
- SONC: Reports Q1 $0.18 v $0.16e, R$139.8M v $134Me; +5.2% afterhours
- MU: Reports Q1 $0.97 (adj) v $0.93e, R$4.57B v $4.64Be; -4.6% afterhours
- KBIO: Intends to discontinue development of KB001-A in cystic fibrosis; fails to meet primary endpoint; -63.9% afterhours
- TWTR: Follow up: Carl Icahn saying he has not bought Twitter shares - financial press
Notable movers by sector:
- Consumer Discretionary: FamilyMart 8028.JP +2.6% (9-month results); Ryohin Keikaku 7453.JP -8.0% (9-month results)
- Materials: Ramelius Resources RMS.AU +34.4% (Dec production result)
- Industrials: Zhengzhou Yutong Bus 600066.CN +2.2% (FY14 sales result); Hino Motors 7205.JP +6.9% (analyst action)
- Technology: Tencent Holdings 700.HK +3.6% (analyst action); Lenovo Group 992.HK +3.2% (to launch Motorola phone in China in Q1)