Asia Mid-Session Market Update: Thin holiday trade widespread in the region; China SAFE warns may adjust investment in US treasuries
***US Session Highlights***
- Today marked the first two day loss for DJIA in 6 weeks
- Gold declined and the US dollar retreated further from its highs. While better than expected economic data failed to help the market change course, as all was mostly as anticipated.
-(IT) Monte Paschi seems to be facing nationalization after it failed to raise the necessary €5 billion to avoid a government bailout.
-(EU) ECB has said it will wait until the second half of 2017, after the German political elections, to consider any changes to its stimulus program.
***US markets on close: Dow -0.11%, S&P500 -0.19%, Nasdaq -0.44%***
- Best Sector in S&P500: Telecommunications
- Worst Sector in S&P500: Consumer Discretionary
- Biggest gainers: MU +12.7%; ALXN +5.8%; CF +4.2%; CAG +3.4%
- Biggest losers: RHT -13.9%; DLTR -5.7%; BBBY -9.2%; JWN -5.8%
- At the close: VIX 11.52 (+0.25pts); Treasuries: 2-yr 1.196% (-0.008bps), 10-yr 2.56% (+0.011bps), 30-yr 3.128% (+0.005bps)
***US movers afterhours***
- CTAS: Reports Q2 $1.15 adj v $1.16e, R$1.30B v $1.29Be; -3.7% afterhours
- PGNX: Independent Committee's Positive Recommendation for Continuation of Phase 3 Clinical Trial of SPECT/CT Imaging Agent 1404; +8.4% afterhours
- CALM: Reports Q2 -$0.48 v -$0.48e, R$253.5M v $266Me; +1.2% afterhours
- LMT: Pres-elect Trump tweets: "Based on the tremendous cost and cost overruns of the Lockheed Martin F-35, I have asked Boeing to price-out a comparable F-18 Super Hornet!"; -1.9% afterhours
- DPRX: Dipexium and PLx Pharma (private) Announce Merger Agreement; +81.3% afterhours
***Key economic data:***
- (SG) SINGAPORE NOV CPI M/M: 0.3% V 0.3%E; Y/Y: 0.0% V 0.0%E; CORE Y/Y: 1.3% V 1.2%E
- (SG) SINGAPORE NOV INDUSTRIAL PRODUCTION M/M: +6.1% V -2.1%E; Y/Y: 11.9% V 1.6%E
- (UK) DEC LLOYDS BUSINESS BAROMETER: 39 V 32 PRIOR
- (US) Weekly Fed Balance Sheet Total Assets for week ending Dec 21st: $4.47T v $4.47T prior; Reserve Bank Credit: $4.44T v $4.43T prior; M1: +$8.5B v -$30.2B prior; M2: +$4.9B v -$26.4B prior
- (US) US based stock funds see $21.6B outflow in week ended Dec 21st v $6.8B inflows in prior week - Lipper
***Asia Session Notable Observations, Speakers and Press***
- Thin trade ahead of the Christmas holiday and shortened trading sessions in several markets left little to break the malaise in the Asia region. Taking a cue from Wall St. markets had little to get excited about with the Dow failing to reach the pivotal 20,000 level and the first two days of losses recorded in 6-weeks. Macro news was limited, though the Singapore dollar saw some strength ahead of its CPI data testing 1.4427. Italy's Govt approved €20B plan to support Monte dei Paschi and the banking system.
China:
- (CN) China leaders said to aim for growth of ~6.5% in 2017 v 6.5-7.0% target for 2016 - Chinese press
- (CN) China Daily Op ed: Peter Navarro's appointment by Trump is another sign of the confrontational approach the incoming Trump administration seems intent on taking in relations with China. Govt must discard any illusions and make full preparations for any offensive move by the Trump government
- (CN) China SAFE official Li Hongyan: China may adjust investment in US treasuries
Australia:
- TTS.AU: Tatts determines Pacific Consortium's proposal is not superior to proposed Tabcorp deal
South Korea:
- (KR) South Korea ruling party asks govt to plan extra budget in Feb
- (KR) South Korea Finance Ministry: to frontload 58% of its fiscal spending in H1 as downside risks to the economy rise and consumption is expected to be weak
Europe:
- (SE) Sweden parliament committee will spend the next 2.5-yrs assessing laws that govern its central bank after it struggled under an existing mandate to reach 2% inflation target
- (IT) Italy Cabinet meeting on banks concluded with an approval of €20B decree to support banks. BMPS will ask for a precautionary recapitalization, which will not trigger bail in.
- Deutsche Bank reaches settlement in principal with DoJ on RMBS; $3.1B penalty and $4.1B in consumer relief in US; Sees Q4 pretax charge of ~$1.17B
***Asian Equity Indices/Futures (00:00ET)***
- Nikkei closed for holiday, Hang Seng -0.5%, Shanghai Composite -0.6%, ASX200 -0.3%, Kospi flat
- Equity Futures: S&P500 +0.02%; Nasdaq -0.04%, Dax +0.04%, FTSE100 +0.14%
***FX ranges/Commodities/Fixed Income (00:00ET)***
- EUR 1.0433-1.0450; JPY 117.38-117.65; AUD 0.7203-0.7227; NZD 0.6898-0.6909
- Feb Gold +0.17% at 1,132/oz; Feb Crude Oil -0.47% at $52.70/brl; Mar Copper -0.40% at $2.49/lb
- (CN) PBOC to inject combined CNY145B v CNY220B prior in 7-day, 14-day and 28-day reverse repo operation
- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.9463 V 6.9435 PRIOR
- (HK) Hong Kong Monetary Authority sells combined HK$34.7B in 3-month and 1-yr bills
- (CN) China MoF sells 3-month bonds at 2.7876%
***Asia equities / Notables / movers by sector***
- Consumer discretionary: Tatts Group TTS.AU -2.9% (rejects offer); Ansell ANN.AU +1.5% (recover from losses); Shaver Shop Group SSG.AU -14.6% (cuts Dec sales)
- Consumer staples: Kweichow Moutai Co 600519.CN -1.1% (guidance)
- Financials: Intueri Education Group IQE.AU -11.8% (Received confirmation of 2017 funding); Goldin Financial Holdings 530.HK +6.0% (wins MTR development tender)
- Industrials: Yang Ming Marine Transport Corp. 2609.TW +3.4% (shareholders approve new plan); MMA Offshore MRM.AU -5.3% (affirms guidance)
- Technology: Mesoblast MSB.AU +2.5% (equity purchase agreement); Acer Inc 2353.TW -1.1% (Jefferies cuts to reduce)
- Materials: Saracen Minerals SAR.AU -2.4% (precious metal drops); Alumina AWC.AU -1.4%(Credit Suisse cuts to underperform)
- Energy: Liquefied Natural Gas LNG.AU +3.9% (receives approval)
- Healthcare: Prima Biomed PRR.AU +5.6% (Interim data from the AIPAC Phase IIb clinical trial); Admedus AHZ.AU +4.5% (affirms guidance)