sian Mid-session Update: Markets rally heading into the holiday break; Japan guides FY16/17 bond issuances to 8-yr low
***Economic Data***
(AU) AUSTRALIA OCT CONFERENCE BOARD LEADING INDEX M/M: -0.1% V -0.3% PRIOR
(VN) VIETNAM DEC CPI Y/Y: 0.6% V 0.5%E
(SG) SINGAPORE NOV INDUSTRIAL PRODUCTION M/M: -3.6% V 0.7%E; Y/Y: -5.5% V -3.0%E
(KR) SOUTH KOREA DEC CONSUMER CONFIDENCE: 103 V 106 PRIOR
***Index Snapshot (as of 04:30 GMT)***
- Nikkei225 flat, S&P/ASX +1.3%, Kospi +0.1%, Shanghai Composite -1.4%, Hang Seng +0.4%, Feb S&P500 flat at 2,051
***Commodities/Fixed Income***
- Feb gold +0.5% at $1,073/oz, Feb crude oil +0.6% at $37.73/brl, Mar copper +0.1% at $2.12/lb
- (JP) BOJ offers to buy ¥400B in 5-10yr JGBs
- (CN) PBoC to inject CNY40B in 7-day reverse repos (50th consecutive injection); Injects net CNY30B this week v injected CNY10B prior (2nd week of injection)
- USD/CNY: (CN) PBoC sets yuan mid point at 6.4755 v 6.4731 prior
- USD/KRW: Onshore opens at KRW1,174 v KRW1,173 prior close
***Market Focal Points/FX***
Asian markets broadly tracked a more positive tone from US and European markets, with energy stocks feeding off higher oil prices. China and Japan markets paired their early gains on profit taking heading into a Christmas break with lower liquidity expected until after the New Year. Regional currencies remained range bound: AUD/USD 0.7260/0.7225; USD/JPY 120.98/120.50 and NZD/USD 0.6808/0.6780. Australia, Hong Kong, Singapore and New Zealand, all trade for partial sessions today and are closed for Christmas Day tomorrow.
Bank of Japan (BoJ) released its meeting minutes from Nov decision. Commentary remained on the importance of seeing wage increase in the New Year and the continued commitment to take action as needed to reach 2% price target. Japan Cabinet approved it FY16/17 budget of ¥96.7T and plans to sell ¥147T JGBs next year v FY15/16 target ¥156.2T. New bond issuance is expected at ¥34.4T, which would be an 8-year low. Japan is planning to increase issuance of 40-year JGBs and reduce the sale of 5 and 20 year JGBs. Tax revenue is seen at ¥57.6T a 25-year high.
The screws continue to tighten on online fantasy sports (DIS, YHOO, MSG); with Illinois Attorney General declaring daily fantasy sports constitutes illegal gambling. Reminder this follows the New York Attorney General in November ordering daily fantasy sports websites DraftKings and Fanduel to cease operations in New York.
***Equities***
US equities / ADRs:
- FDX: Some select retailers reportedly have issued warnings of delayed deliveries on packages due to issues at Fedex - press; -0.4% afterhours
- CALM: Reports Q2 $2.27 v $2.28e, R$546M v $561Me; -5.6% afterhours
- RVNC: Announces positive Phase 2 results for RT001 botulinum toxin type A topical gel to treat axillary hyperhidrosis; -6.5% afterhours
Notable movers by sector:
- Consumer discretionary: China Southern Airlines Co 1055.HK -2.5% (Airbus purchase)
- Financials: Industrial Securities Co 601377.CN -6.6% (CNY15B rights issues); CITIC Securities 600030.CN -2.7% (loss from financing business); Devine Ltd DVN.AU -3.9% (CIMIC Group declares final offer)
- Industrials: Zoomlion Heavy Industry Science and Technology Co 1157.HK +0.3% (investment); CRRC Corp 1766.HK +0.3% (to set up JV); China Machinery Engineering Corp1829.HK +1.4% (signs contract); BYD 1211.HK +3.8% (approval for private placement)
CIMIC Group CIM.AU +0.7% (awarded contract);Broadspectrum BRS.AU +2.3% (Board iterates to take no action on Ferrovial offer); Fuji Heavy Industries 7270.JP -0.1% (raises guidance with one-time gain)
- Technology: Epistar Corp 2448.TW +2.0% (seeks financing)
- Materials: BYD 1211.HK +3.8% (approval for private placement)
- Energy: Oil Search OSH.AU +3.8% , Woodside Petroleum WPL.AU +2.1% (oil price higher)
- Healthcare: Shanghai Fosun Pharmaceutical Group Co 2196.HK +0.2% (to set up JV in China)