Asia Market Update: Indices trade generally higher after US gains; Euro weakens; Upcoming US data
-Euro declines amid focus on politics
-Upcoming US Nov data in focus
Australia/New Zealand
-ASX 200 opened +0.2%; closed +0.2%
ASX 200 Energy Index +0.8%, Resources +0.6%, Financials +0.1%; REIT -0.3%
China/Hong Kong
-Hang Seng opened +0.5%, Shanghai Composite -0.1%
Hang Seng Consumer Discretionary Index +0.8%, Property/Construction +0.7%; Services Index -0.5%
-Postal Savings Bank of China +1%: Says press report on HNA cutting stake ‘do not accord with the facts’
-(CN) China CSRC (securities regulator): no change in pace of IPO reviews - press
-(CN) China PBoC is not expected to raise rates in 2018 - China Daily
-(CN) PBoC OMO: Skips OMO, cites high level of liquidity v CNY70B injected in 7,14 and 28-day reverse repos prior; Net drain CNY80B v CNY10B drain prior; For the week, PBoC injected net of CNY200B vs CNY80B injection w/w.
-(CN) China sets yuan reference rate at 6.5821 v 6.5795 prior
-(CN) China Development Bank (CDB) said to sell 20-year bonds at 5.14% - US financial press
-(CN) China Banking Regulatory Commission (CBRC) to effectively prevent risks in property sector
-(CN) China issues guideline related to development of drone industry: Targets CNY60B civil-use drone industry by 2020; Targets CNY180B civil-use drone industry by 2025.
-(CN) China NDRC: To cut on-grid solar power prices for 2018
-(HK) HK Chief Exec Lam: Cooling measures have not suppressed housing prices – HK Media
-(HK)Hong Kong Monetary Authority (HKMA) to monitor capital outflows after year-end effect – HK Press
Japan
-Nikkei 225 opened -0.1%; closed +0.2%
Mega-banks broadly higher: Mitsubishi UFJ +1.9%, Sumitomo Mitsui Financial +1.2%
Fast Retailing +0.7%
TOPIX Pharma Index -1.6%: Eisai -15% (phase 2 Alzheimer’s study did not meet endpoint)
Chip-related names track US declines: Tokyo Electron -2.4%, SUMCO -2%, Toshiba -1.5%
Kobe Steel -2%: Confirmed third party committee needs additional time for data falsification report, expects completion around the end of Feb; To change duties of 3 executives who were aware of fraud
-Japan Cabinet approves annual general-account budget spending of ¥97.71T for FY18/19 (record); Approves FY17/18 supplementary budget with added spending of ¥2.71T (as expected); Confirms plans to sell new bonds worth ¥33.69T (9-year low)
Japan Fin Min Aso: Budget focuses on improving productivity and human capital; budget sticks to fiscal consolidation
Japan Econ Min Motegi: Government will continue to work toward achieving primary budget surplus
South Korea
-Kospi opened +0.3% (declined over 1.7% prior session)
Samsung Electronics +1.3% (declined over 3.4% prior session);China NDRC said to have discussed memory chip prices with the company – Chinese Press
Cosmetics names under pressure, Amorepacific -2.5%; China Shandong said to have halted group tours to South Korea – South Korean Press
-Korean Won +0.3%
-South Korea Minister: Open to talks with North Korea without preconditions
-South Korea denies press report related to military drill – South Korean Press (**Note: An earlier press report said that North Korea and South Korea were said to have discussed military drills and the upcoming 2018 Winter Olympics in South Korea)
-South Korea denies press report related to military drill – South Korean Press
Looking Ahead: UN vote on new sanctions on North Korea due on Friday
Other Asia
-(ID) Indonesia FSA plans to remove cap on bank deposit rates – Indonesia Press
-(PH) Philippines expected to raise 2018 export growth forecast – Philippines Press
-(PH) Philippines Central Bank (BSP) said to allow companies to borrow overseas without its approval
North America
-US equities closed higher: Dow +0.2%, S&P500 +0.2%, Nasdaq +0.1%, Russell 2000 +0.5%
S&P500 Energy Sector +2.2%, Financials +0.9%
-Nike -1.9% in the afterhours (reported Q2 results above ests, Q2 gross margin -120bps, Q2 North America Rev -5% y/y ex currency; affirmed FY18 Rev growth forecast)
-(US) US Senate has enough votes to pass temporary stopgap funding measure; final vote 66-32 (**Note: The measure, which was passed earlier on Thursday by the US House, will now go to President Trump for his signature; The bill funds the government through Jan 19th and avoids a government shutdown on Saturday, Dec 23rd)
-(US) White House Economic Adviser Jeremy Katz said to resign – Washington Post
-(US) Reportedly Larry Lindsey being considered for role of Fed Vice Chair; Lindsey is interested – CNBC (Lindsey, 63, is an economist who was director of the National Economic Council, and the assistant to the president on economic policy for the U.S. President George W. Bush)
M&A: Embraer: Boeing said to have held takeover talks but are currently at a standstill as they seek permission from Brazil govt to pursue a deal – press
Ignyta [RXDX]: Said to be in advanced talks regarding a sale – financial press
Looking ahead: US Nov Durable Goods, Core PCE Index, Personal Income, Personal Spending and New Home Sales due for release on Friday
Europe
-(ES) Catalan separatists have won majority of seats in the regional parliament; The Separatists said to have won 70 out of 135 seats in the regional assembly, according to a financial press report.
-(GE) Germany's Sigmar Gabriel said to warn of minority government - US financial press (**Note: Gabriel has served as Germany's Minister for Foreign Affairs since 2017 and Vice Chancellor since 2013)
-EUR/USD: In early Asia, traded lower by 0.5% amid Germany’s Sigmar Gabriel reportedly warning of minority government, Catalan Separatists win of majority of seats in regional parliament
-(UK) Lloyds Dec Business Barometer: 28 v 24 prior
Looking Ahead: UK third reading of Q3 GDP due for release
***Levels as of 01:00ET***
- Hang Seng +0.4%; Shanghai Composite +0.1%; Kospi +0.5%
- Equity Futures: S&P500 +0.1%; Nasdaq100 +0.1%, Dax +0.2%; FTSE100 +0.1%
- EUR 1.1817-1.1876; JPY 113.27-113.8 ; AUD 0.7701-0.7718; NZD 0.7007-0.7027