Asian Market Update: Yellen approved by Senate as next Fed Chair; Samsung Electronics prelim Q4 misses estimates; Australia trade deficit narrows
***Observations/Insights*** - As expected, Janet Yellen was approved by the US Senate to take the reins of the Fed from chairman Bernanke starting in February; Final vote tally was 56-26. "Nay" count was below that of Bernanke's 30 in 2010, however a handful of Senators were absent because of weather-related travel disruptions in Washington. All 45 voting Democrats voted in favor and were joined by 11 Republicans, while 26 Republicans voted no. Separately, Senate Majority leader Reid postponed the vote on the extension of unemployment benefits to Tuesday morning. - Samsung Electronics preliminary Q4 missed consensus estimates on the top and bottom line, marking the first time that op profits fell in more than 2 years. Analysts will be quick to attribute part of the disappointing results to stronger KRW impacting exports. After opening slightly lower, shares are up about 0.2% in afternoon trade. Final Q4 results will be released in late January. - Australia November trade figures saw the deficit narrow for to a 5-month low, as exports came in flat m/m while imports contracted 1%. AUD/USD initially rose but quickly reversed those gains to fall nearly 0.5%, with trade components showing m/m declines in exports to China and overall shipments of coal. Subsequent comments from economists showed some optimism that exports did not contract despite economic slowdown, but also warned that lower imports could bode poorly for retail sales data on tap for later this week. - Speaking at the LDP party meeting, Japan PM Abe emphasized the importance of higher wages ahead of the rise in the sales tax in April.
***Economic Data*** - (JP) JAPAN NOV LOANS & DISCOUNTS CORP Y/Y: 2.6% V 2.0% PRIOR - (JP) JAPAN DEC MONETARY BASE Y/Y: 46.6% V 52.5% PRIOR (record high for 10th straight month) - (AU) AUSTRALIA NOV TRADE BALANCE (A$): -$118M V -$300ME (5th consecutive deficit; smallest deficit in 5 months) - (PH) PHILIPPINES DEC CPI M/M: 0.7% V 0.6%E; Y/Y: 4.1% V 4.0%E; CPI CORE Y/Y: 3.2% V 2.8% PRIOR
***Fixed Income/Commodities/Currencies*** - JGB: (JP) Japan MoF sells ¥2.18T in 0.6% (0.6% prior) 10-yr notes; Avg yield: 0.719% v 0.648% prior; Bid to cover: 3.84x v 4.01x prior - (CN) Daily Shibor fixings: O/N: 2.8750% v 2.9200% prior (10th consecutive decline, lowest since May 16th); 1-week: 4.2590% v 4.6330% prior (4th consecutive decline)
- AUD is the biggest mover against the greenback among the majors, falling over 0.5% below $0.8920 in the wake of mixed Australia trade figures. NZD/USD is also on the lows in the afternoon session, fallling 0.4% or about 40pips below $0.8260. USD/JPY consolidated some of its overnight decline, rising over 30pips above ¥104.50, while EUR/USD was flat in a 15pip range, supported by $1.3620 US session lows.
***Speakers/Political/In the Papers*** - (CN) China Academy of Social Sciences (CASS) researcher: PBoC policy to maintain neutral to tight policy; May see prolonged cash squeeze in 2014 - China Daily - (CN) PBoC won't conduct open market operations (OMO) in today's session; On the sidelines for 2 weeks - (CN) China Guangdong Province reports 2 new cases of H7N9 bird flu - Chinese press - (CN) China Ministry of Land and Resources to draft policies to promote economic land use - Chinese press - (JP) Japan Fin Min Aso: To continue aiming for economic growth and fiscal consolidation - financial press - (JP) Japan PM Abe: April will be a critical moment for companies to increase workers' salaries as consumption tax increase goes into effect - Kyodo - (AU) Commonwealth Bank economist comments on Australia trade data: Encouraging that exports are still holding up - SMH - (KR) South Korea Trade Ministry: Strong KRW, weak JPY trend is intensifying - (KR) South Korea Fin Min Hyun: To plan 3-year economic policy plan 'shortly'; to target 4% annual growth rate - financial press - (PH) Philippines Central Bank (BSP) Gov Tetangco: 2013 is a year of challenge; 2014 inflation to be with target
**US/Europe** - (US) FULL SENATE CONFIRMS JANET YELLEN AS INCOMING FED CHAIRMAN, AS EXPECTED; Final vote tally 56-26 (for comparison, Bernanke confirmation vote was 70-30 in 2010) - (US) Senate Majority Leader Reid (D-NV): To delay Senate vote on unemployment benefits until Tues morning - financial press - (UK) British Chambers of Commerce (BCC) releases Q4 survey: Sees record highs in domestic services exports, employment balances - (NL) Netherlands Fin Min Dijsselbloem: Netherlands will meet budget deficit targets in 2015 - financial press
***Equities*** Market Snapshot (as of 04:30 GMT): - Nikkei225 -0.5%, S&P/ASX +0.1%, Kospi +0.5%, Shanghai Composite +0.2%, Hang Seng +0.3%, Mar S&P500 +0.2% at 1,824, Feb gold +0.2% at $1,240, Feb crude oil +0.6% at $93.58/brl
US markets: - NBIX: Announces Positive Results of VMAT2 Inhibitor NBI-98854 in Kinect 2 Study; +63.9% afterhours - CVG: To Acquire Stream for $820M; sees acquisition as highly accretive; reaffirms FY13 $1.10 v $1.10e, R$2.045B v $2.05Be; +18.7% afterhours - SHLM: Reports Q1 $0.57 (adj) v $0.48e, R$585.4M v $532.1M y/y (2 ests); +7.7% afterhours - CYH: Guides FY13 Rev $12.975-13.0B v $13.1Be (prior $13-13.2B); Guides prelim FY14 Rev (assumes acquisition of HMA) $19.7-21.2B; -2.8% afterhours - CYNI: Guides Q4 lower to R$20-21M v $31.2Me ($30-33M prior); -23.0% afterhours
Notable movers by sector: - Consumer discretionary: Wynn Macau 1128.HK +4.9%, Sands China 1928.HK +4.0%, SJM Holdings 880.HK +3.8% (Morgan Stanley raises Macau gaming revenue growth estimate); Sichuan Youli Investment Holding 000584.CN +2.8% (special stock dividend); Daphne International Holdings 210.HK +11.3% (analyst action) - Consumer staples: San-A Co Ltd 2659.JP +7.7% (9M results) - Industrials: Jiangsu Tongguang Electronic Wire and Cable 300265.CN +2.3% (awarded order); CNR 601299.CN +1.3% (awarded order); Boart Longyear BLY.AU +6.8% (CEO appointment); Kubota 6326.JP -1.4% (press reports on FY13/14 results) - Financials: Shanghai International Port 600018.CN +10.0% (prelim FY13 result); QBE Insurance QBE.AU +1.4% (CBA ceases to be substantial holder) - Materials: Shanghai ANOKY Textile Chem 300067.CN +10.0% (FY13 guidance); Midas Holdings 1021.HK +3.7% (awarded contract); Luxin Venture Capital Group 600783.CN -5.5% (some company's bank account frozen) - Technology: Beijing Orient National Communication Science & Technology 300166.CN +3.1% (FY13 guidance; special stock dividend); Shanghai Kingstar Winning Software 300253.CN +1.8% (FY13 guidance, special cash and stock dividend); Samsung Electronics 005930.KR +0.2% (prelim Q4 results) - Utilities: 9501.JP TEPCO -1.2% (chairman replacement)