BoJ said to see any extra stimulus as counterproductive for now - US financial press - Said to see consumer sentiment hurt by further yen drop
Interxion’s biggest shareholder Baker Capital supports Telecity takeover bid; Telecity chairman denies reports of interest from former CEO Mike Tobin
Interxion’s biggest shareholder Baker Capital is believed to support listed UK-based rival Telecity’s takeover bid for the datacenter business, The Daily Telegraph reported. The newspaper did not cite a source for the claim, which appeared in a longer article about Telecity’s GBP 1.4bn (EUR 1.89bn) bid for listed Netherlands-based Interxion, which was announced yesterday, 11 February.
The item quoted Telecity’s Executive Chairman John Hughes, who dismissed talk that the group had been holding talks with other potential bidders.
Hughes, quoted in a report in The Times, said talk of interest in Telecity from private equity firms led by former Telecity chief executive Mike Tobin were not true.
Separately, The Times reported that the deal announcement could smoke out other bidders. Equinix, a listed Californian data centre operator, could make an offer, the item said. The report quoted one unspecified source who said Equinix has consistently said it would intervene should Telecity and Interxion attempt a tie-up.
Source Daily Telegraph, The Times
* Weak EMs, stagnant DMs, rising EM competition and deflation…
Staples growth remains sluggish in EMs owing to tough macro conditions
and in some cases rising category maturity. DM recovery will likely be
subdued for staples as QE and lower oil price benefits are spent on more
discretionary categories. In EMs, MNCs are beginning to lose share to EM
players. There are growing signs of deflationary pricing in categories that
lack pricing power as input costs fall. While long-term growth and returns
characteristics are attractive, we expect staples to deliver CY16-18 EPS
growth 2% lower than the market, despite expecting material, accretive
M&A. At the same time, earnings volatility has reached 15-year highs.
* …yet valuation is close to all-time high; we see a 15% de-rating…
Despite a weakening growth outlook, European staples trades on 20.3x
12-month forward P/E, and has only traded above this level for 15 weeks
over the last 25 years (1%) during the tech bubble. The last time staples
traded at c.20x 12-month forward P/E, it experienced a relative de-rating of
15% over the next year (29% over two years). While the current premium
(34%) to the market is in line with history, it is unusual for the premium to
be sustained with the market at these elevated levels. Historically, staples’
premium has tracked US bond yields, with rising yields leading to a falling
premium. Assuming US yields increase to 3% (as per our economists) and
that the market remains flat, we estimate staples’ 12-month forward P/E
should fall to c.17.5x, a 15% de-rating, or a US$200 bn drop in market cap.
* …and dividend/cash flow support is better elsewhere
For CY15E, 15 of the 26 sectors covered by GIR offer higher dividend yields
than European staples; 13 offer higher FCF yields. For better dividend yield
and free cash flow with lower earnings volatility, see our ‘Income Plus’
basket (GSTRHYLV). By CY18E, staples offers a FCF yield 1.7% below the
market, having never traded at more than a 1% FCF discount historically.
To bring staples back to FCF parity would require a 22% reduction in the
sector’s market cap, or similar upgrades.
*Three new Sells; Danone to CL Sell; we continue to prefer self-help
We update estimates for current trading and FX and update our M&A
framework. We downgrade Diageo, Campari and Henkel to Sell from
Neutral. We add Danone to the Conviction Sell List and downgrade SCA to
Neutral from Buy. Our top picks offer either self-help via cash deployment
(ABInBev, L’Oreal), defensive growth (Chr Hansen) or should benefit from
falling input costs (Britvic).
*CHUGOKU ELECTRIC TO SELL CONVERTIBLE BONDS
*CHUGOKU ELECTRIC TO SELL CBS OUTSIDE OF JAPAN
*CHUGOKU ELECTRIC TO SELL CBS DUE 2018 AND 2020
*CHUGOKU ELECTRIC TO SELL 100B YEN OF CBS IN 2 TRANCHES
*NOMURA TO BE SOLE BOOKRUNNER FOR CHUGOKU ELECTRIC CBS SALE
*CHUGOKU ELECTRIC TO SPEND 55B YEN OF PROCEEDS TO REPAY DEBTS
*CHUGOKU ELECTRIC TO SPEND 45B YEN OF PROCEEDS ON CAPEX, R&D
*CHUGOKU ELECTRIC TO ALSO USE PROCEEDS FOR BOND REDEMPTIONS
Dow-0,04% S&P-0% Nasdaq+0,28% Russell-0,14% VIX 17,07 -0,88%
US Market close near t he flat line, volume was below average @ 732mil shares for the 3rd day in a row...The EU finance ministers meeting took place earlier today, but hopes for a swift deal were dampened by Germany's Finance Minister Wolfgang Schaeuble who said he did not expect a resolution today, echoing comments made by Eurogroup Chief Jeroen Dijsselbloem. The Eurogroup is now expected to spend the weekend analyzing the divergences between the plan presented by Greek Finance Minister Yanis Varoufakis and the existing program...energy sector (-0.7%) spent the day in negative territory as crude oil struggled. The energy component held an overnight gain, but slumped to end the pit session lower by 2.4% at $48.87/bbl. The closing price masked the fact that oil tested the $48.25/bbl level after today's storage report revealed a substantial inventory build of 4.868 million barrels., utilities sector lost 2.4% to widen its February loss to 4.9%...AAPL +2,3%...US After Hours NTWK +18.3%, TRIP +14.1%, CSCO +5.6%, ZU -21.8%, BIDU -10.3%, PNRA -8.8%, TSLA -3.1% following earnings/guidance...PBR -1.8% (confirmed that an explosion took place aboard FPSO Cidade de São Mateus today...
Asian following Greek news flow...Initial CNBC report of an 'agreement in principle' for Greece to remain in the bailout program was quickly negated, as Greek govt officials refuse to accept an extension of the bailout under the current terms of austerity. After a delay, Eurogroup's Dijsselbloem confirmed that negotiators could not achieve a conclusion despite some progress made in clarifying the positions of both sides, adding the existing program is only the starting point of discussion. Dijsselbloem concluded the address by noting talks will resume on Monday. Concurrent comments from Greek Fin Min Varoufakis were even less sanguine, stating that many concessions are still needed to reach a deal on Monday, reiterating Greece wants a new contract with Europe toward a "healing deal", and that the Greek side is seeking to explain why the current bailout conditions are not working...In China, PBoC cut RRR by 1% for Bank of Beijing, releasing an estimated CNY9B in liquidity. Later in the day, central bank's open market operations were also aggressive with CNY120B for the session and CNY205B for the week - both of those are the highest since last January - as policymakers anticipate credit spike going into next week's Lunar New Year. ,Japan machine orders were much stronger than expected, prompting an upgrade in govt assessment only a month after a cut on the sector. Econ Min Amari was upbeat on the progress made fighting deflation in spite of the falling oil prices. Japan cabinet also deflected overnight press reports of likely miss on fiscal balance objective by 2020, noting FY15 consolidation target will be met.
Nikkei +1.85% Hang seng +0.31% Shnaghai +0.49%
RUB $65.33 WTI $49.77(+1.90%) EURCHF 1.051
EUR$ 1.1310 S&P Unch EuroStoxx +0.24% Dax +0.22% SMI +0.40%
Macro :
- Greek Banks Have Used Almost All ELA Funds They’ve Drawn: Skai
Keep an eye on :
- ADP FP : ADP 2014 Net Income EU400M, Union Official Tells France Info
- AERL LN : IAG ‘Nowhere Near’ Leaving Aer Lingus Bid, CEO Says: Irish Times
- AGS BB : Ageas 4Q Net Misses Ests. as Guaranteed Oper. Margin Falters
- AKZA NA : Akzo Nobel 4Q Rev. EU3.52b, Est EU3.47b; on Track for 2015 Goals
- ALO FP : Alstom to Build 30MW West Java Geothermal Plant
- ASML NA : ASML CEO Remuneration Rises 37%; CTO Remuneration Increases 34%
- BAR BB : Barco 2014 Ebitda EU128.6m; Est. EU124.9m; Raises Div.
- BAYN GY : Bayer Plans Corporate Reorganization for 2016
- GBF GY : Bilfinger 4Q Net Profit Falls 5%; Div. Plan Beats BDVD Forecast
- BOL SS : Boliden 4Q Profit Beats Est.; Dividend Raised More Than Est.
- BMW GY : BMW Sets 2015 China Sales Growth Target at 16%: Business Daily
- CRG IM : Banca Carige Full-Yr Loss EU543.6m vs Loss EU1.76b Y/y
- CBK GY : Commerzbank 4Q Net Income EU77m; NCA Run-Down Portfolio Cut 28%
- BMPS IM : Monte Paschi Expands Capital Increase to EU3b From EU2.5b
- BP IM : Banco Popolare 4Q Net Loss Misses Estimate; CET Ratio 11.9%
- ACA FP : Credit Agricole May Name Brassac to Replace CEO: Les Echos
- CABK SM : Caixa Geral 2014 Net Loss EU348m Vs. Net Loss of EU578.9m
- CSGN VX : Credit Suisse 4Q Net CHF921m; Est. CHF869m; IB Pretax CHF12m, 4Q FICC Rev. CHF610m; Est. CHF909m
- DBHN GY : Deutsche Bahn Preparing More Trains For Germanwings Strike
- DBHN GY : Deutsche Bahn Says GDL Union Rejected Today’s New Offer
- EDEN FP : Edenred 2014 Rev., Ebit In Line With Ests.
- EDF FP : EDF 2014 Ebitda Beats, Net Misses; Targets 0%-3% Growth in 2015
- ETL FP : Eutelsat 1H Net Rises; Reiterates Full Year, 3-Year Targets
- EO FP : Faurecia 2014 Net Misses Est., Oper. Income, Rev. Beat
- FCA IM : FCA’s Marchionne Open to Consolidation, FT Reports
- RMS FP : Hermes 2014 Sales EIU4.12b, Est. EU4.13b, 4Q Total Sales Growth Constant FX 9.6%, Est. 10.2%
- RXL FP : Rexel Says 2014 Performance In Line With Targets
- HUH1V FH : Huhtamaki 4Q EPS, Pretax Profit Beat Ests.; Raises Dividend
- KGX GY : Kion 4Q Sales Rise 11% to EU1.31b; Ebit Up 16% to EU134.2m
- LR FP : Legrand Sales Match Estimates; Says 2015 Op. Margin May Fall
- LMI LN : Lonmin could receive bid following Glencore’s distribution of stake to shareholders - FT
- RI FP : Pernod 1H Recurring Profit EU1.36b, Est. EU1.38b; Confirms View
- PUB FP : Publicis 2014 Organic Growth Up 2%; Sees Better Levels in 2015
- RNO FP : Renault 2014 Profit Beats Est., Sees Higher Earnings This Yr
- REX LN : Rexam/Ball balance risks ahead of tough antitrust reviews, attorneys say - Deal Reporter
- RIO LN : Rio Tinto Plans Buyback of $2b; FY Profit Beats Estimate
- SIK VX : Sika: SWH request for ex parte decision dismissed by Cantonal Court of Zug
- SKAB SS : Skanska 4Q Op. Profit, Revenue Beat Ests.
- GLE FP : Societe Generale 4Q Net Misses; Says Environment Still Uncertain
- GLE FP : SocGen Sees 2015 Russian Bad-Loan Provisions Rising
- SRCG SW : Sunrise Says IPO Over-Allotment Option Fully Exercised
- SUN SW : Sulzer 2014 Sales, Orders Drop; Net Income Rises
- TNET BB : Telenet Sees 2015 Adj. Ebitda Growth About 4%; Median Est. 4.5%
- TOM2 NA : TomTom 4Q Rev. Beats; Says 2015 Sales to Grow, EPS to Decline
- UNR1V FH : Uponor 4Q Sales Beat, Profit Matches Ests.; Proposes Raising Div
- ZAL GY : Zalando 4Q Prelim Rev. EU666m, Est. EU661m, Reaffirms Forecast
- ZURN VX : Zurich Insurance 4Q Net Income $858m; Est. $785m
Rexam/Ball balance risks ahead of tough antitrust reviews, attorneys say
- Few mitigating factors on overlaps
- Ardagh/ Saint-Gobain precedent case
- 70% market share in Brazil
Rexam (LON:REX) and Ball (NYSE:BLL) have a price, but the companies must brace themselves for the expected in-depth antitrust review and craft a merger agreement that properly accounts for the risk, two US antitrust attorneys said.
The UK and US industrial companies announced on 5 February that they are in talks over a potential GBP 4.3bn cash and stock transaction that would create a dominant producer of metal packaging for beverages in the US and Europe.
Based on the positive reactions of both firms’ stocks, a Rexam shareholder said he believed the companies would do “whatever it takes” to reach a deal. He said Rexam’s management has likely spent considerable time on the transaction to be in a position to reveal a potential deal with an offer price.
To prepare for antitrust risk, Rexam and Ball will need to conduct a thorough assessment of likely demands from regulators, followed by the creation of a merger agreement between the merging parties that entails a delicate interaction between termination fees, best efforts obligations, as well as divestiture thresholds, the antitrust attorneys said.
A 2011 reform to the UK Takeover Code complicates the potential to use termination fees in this effort, though there are precedent cases of buyers agreeing to reverse termination fees in the event they are unable to close an acquisition on agreeable terms.
The Federal Trade Commission (FTC), the US regulator likely to take the merger, is often reticent to bless mergers that bolster a dominant player’s market share of a specific product, the attorneys said. According to an analyst that covers the companies, in the North American aluminum beverage can space, Ball holds 40% market share, Rexam 21% and Crown Holdings (NYSE:CCK) 19%.
Rexam is particularly strong with its relationship with energy drink company Red Bull, while Ball has good connections to brewers, a second analyst said.
Still, a 60% market share is extremely unlikely to be deemed acceptable to the FTC, the antitrust attorneys said.
And wiggle room appears to be minimal, one of the antitrust attorneys said, who explained that it is unclear what mitigating factors the merging companies could invoke to soothe anticompetitive concerns. Both attorneys said that traditional justifications deployed by merging parties do not appear to be applicable for this industry.
Complimentary geographic footprints do not seem to make sense, as the FTC will likely view the market for metal beverage containers as national; adjacent entry is not likely, as interchangeability with other products is not easily accomplished; and arguments of overcapacity do not match up with data that indicates an increase in can usage, the attorneys said.
The companies’ best bet, according to the first attorney, may be to argue for a broad product market definition that would include plastic bottles as a competitive restraint. Even that argument, the same attorney said, would only conceivably be used for the soda segment, as beer producers will not drift away from their choice of metal or glass. Soda represents some 40% of the relevant market leaving a significant range of alcohol beverage customers potentially at a disadvantage.
Glass and metal containers are widely considered to be superior ways to store beer over plastic, though plastic is used in some cases like sporting events. The beer industry has been moving away from more expensive glass to aluminum cans in recent years.
According to data obtained from the Beer Institute, shipments of aluminum cans in 2012 increased about 8% compared with 2006. Bottle shipments fell by 14%. The same data demonstrates the compound annual growth rates from 2000 to 2012 for can shipments grew by 0.7%, while bottle growth was flat.
US antitrust regulators last conducted a major review of the beverage container market in 2013 when they filed a complaint on the merger of glass container businesses Ardagh Group and Saint-Gobain Containers, which operated in the US under the name Verallia North America (VNA).
The complaint, which defines the market for glass containers and the markets for aluminum and plastic as separate and distinct, is the precedent for the Rexam-Ball review. The FTC defined two relevant national markets: the manufacture and sale of glass containers to brewers, and the manufacture and sale of glass containers to distillers.
The FTC did not include non-glass packaging materials, such as aluminum cans or plastic containers, in the relevant product markets because not enough brewers and distillers would switch over in response to more expensive glass. Due to commercial constraints such as consumer preferences and brand identity, brewers and distillers do not view aluminum cans and plastic containers as interchangeable for glass, regulators wrote.
While aluminum and plastic cost less than glass containers, brewers still sell beer in both glass bottles and aluminum cans because they view the two as complementary and not substitutes, according to the FTC.
A merger of the second- and third-largest glass container manufacturers would likely lead to anti-competitive pricing in part due to lost head-to-head competition, likely output reductions, “speculative, unverifiable, or non-merger specific” efficiencies and high barriers to entry, regulators argued. Potential entrants would face, among other obstacles, the large capital investment and fixed costs needed to build and operate a factory.
The FTC ultimately settled the case with Ardagh and Saint-Gobain and required the companies to divest Ardagh’s Anchor Glass business.
To remedy the Ball deal, the companies will need to create a divestiture package that would include a robust mix of production facilities, the attorneys and an analyst said, though it remains unclear whether the FTC would be willing to see those assets go to Crown thereby creating a symmetrical duopoly.
This news service previously reported that significant divestitures may be needed in Europe along with the US, and the first attorney also speculated that a Ball joint venture in Brazil may also need to be shed. The second analyst said the combined market share is around 70% in Brazil, with Rexam having around 50%. Antitrust regulations in the South American country are still developing and regulators have not moved to block any major international mergers.
Since Rexam and Ball are likely focused on international growth, they may be more open to making US divestitures, the second analyst said. He noted that US capacity utilization is around 90% with growth primarily coming from beer and energy drinks as soft drink demand is declining.
If the companies lose some US plants in the short term, it may be a fair trade for emerging market assets, he said.
Sika: SWH request for ex parte decision dismissed by Cantonal Court of Zug
Story
In the context of a second proceeding before the Cantonal Court of Zug, Schenker-Winkler Holding AG (SWH) seeks to lift the limitation of its voting rights to 5%, according to a press release. A respective request by SWH for an ex parte decision has been dismissed by the Cantonal Court of Zug.
Sika AG now has the opportunity to comment on the remaining requests of SWH.
Lonmin could receive bid following Glencore’s distribution of stake to shareholders
Glencore’s proposed in specie distribution of its 23.9% stake in Lonmin could prompt takeover bids for the listed Platinum mining group, the Financial Times reported. The newspaper cited people familiar with the situation who said Glencore had previously been approached regarding its stake in Lonmin. Glencore’s decision to distribute the shares in specie to its own shareholders could lead to renewed interest from possible buyers.
Glencore, a listed Switzerland-based commodities trader and mining group, announced yesterday, 11 February, that it plans to spin off its stake in Lonmin in 1H15.
A market report in the Financial Times noted speculation that Glencore could be looking to prompt a formal bid for its shareholding in Lonmin. Dealers cited by the report mentioned talk that Glencore had been approached with an offer for the Lonmin stake but deemed the offer too low.
The market report went on to note a separate theory, that Lonmin might be considering a rights issue and that Glencore was unwilling to back the cash call. However, analysts downplayed that theory, the item added.
Lonmin’s share price closed 14.3p down at 158.1p on the London Stock Exchange yesterday, giving the company a market capitalisation of GBP 923m (EUR 1.24bn).
Financial Times
>>> Up
*HEINEKEN RAISED TO EQUALWEIGHT VS UNDERWEIGHT AT BARCLAYS
*MEDA RAISED TO BUY FROM NEUTRAL AT SWEDBANK
*MEDA RAISED TO BUY FROM NEUTRAL AT SWEDBANK
>>> Down
*AZIMUT CUT TO NEUTRAL VS BUY AT CITI
*BIC CUT TO MARKET PERFORM VS OUTPERFORM AT RAYMOND JAMES
*BG GROUP CUT TO SELL VS BUY AT SOCIETE GENERALE
*CAIRN ENERGY CUT TO SELL VS HOLD AT SOCGEN
*CAMPARI CUT TO SELL VS NEUTRAL AT GOLDMAN (Note attached)
*DIAGEO CUT TO SELL VS NEUTRAL AT GOLDMAN (Note attached)
*DNB ASA CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN
*FINNAIR CUT TO NEUTRAL VS OVERWEIGHT AT HSBC
*HENKEL CUT TO SELL VS NEUTRAL AT GOLDMAN (Note attached)
*LUNDIN PETROLEUM CUT TO SELL VS HOLD AT SOCGEN
*MAUREL & PROM CUT TO HOLD VS BUY AT SOCGEN
*MEDIOLANUM CUT TO NEUTRAL VS BUY AT CIT
*PREMIER OIL CUT TO SELL VS HOLD AT SOCGEN
*RALLYE CUT TO UNDERWEIGHT VS OVERWEIGHT AT JPMORGAN
*RALLYE CUT TO NEUTRAL VS OVERWEIGHT AT HSBC
*REPSOL CUT TO HOLD VS BUY AT SOCIETE GENERALE
*ROVI CUT TO NEUTRAL VS BUY AT UBS
*SCA CUT TO NEUTRAL VS BUY AT GOLDMAN (Note attached)
*SIEMENS CUT TO UNDERWEIGHT VS EQUAL WEIGHT AT MORGAN STANLEY (Margin Outlook)
*SKY PLC CUT TO MARKET PERFORM AT SANFORD BERNSTEIN
*SURGUTNEFTEGAS PREFS CUT TO NEUTRAL AT CREDIT SUISSE
*STATOIL CUT TO SELL VS HOLD AT SOCIETE GENERALE
*TULLOW OIL CUT TO HOLD VS BUY AT SOCGEN
>>> PT Change
>>> Initiation
*BURBERRY RATED NEW OUTPERFORM AT RBC, PT 2,000P
*HERMES RATED NEW SECTORPERFORM AT RBC, PT EU300
*KERING RATED NEW UNDERPERFORM AT RBC, PT EU170
*LVMH RATED NEW OUTPERFORM AT RBC, PT EU170
*NUMERICABLE RATED NEW OUTPERFORM AT CREDIT SUISSE, PT EU53
*PRADA RATED NEW UNDERPERFORM AT RBC, PT HK$43
*RICHEMONT RATED NEW SECTORPERFORM AT RBC, PT CHF85
*SWATCH RATED NEW OUTPERFORM AT RBC, PT CHF450
*TOD’S RATED NEW UNDERPERFORM AT RBC, PT EU82
>>> Call
>> Stock
*DANONE ADDED TO CONVICTION SELL LIST AT GOLDMAN (Note attached)
Asian Mid-session Update: Australia unemployment rises to 12-year high; Dijsselbloem confirms "No Deal" on Greece
***Economic Data***
- (AU) AUSTRALIA JAN EMPLOYMENT CHANGE: -12.2K V -5.0KE (1st decline in 4 months); UNEMPLOYMENT RATE: 6.4% V 6.2%E (highest since Aug 2002); PARTICIPATION RATE 64.8% V 64.7%E
- (AU) AUSTRALIA FEB CONSUMER INFLATION EXPECTATION: 4.0% V 3.2% PRIOR; 3-month high
- (NZ) NEW ZEALAND JAN MANUFACTURING PMI: 50.9 V 57.1 PRIOR (2-year low)
- (JP) JAPAN JAN CGPI (PPI) M/M: -1.3% V -0.6%E; Y/Y: 0.3% V 1.1%E
- (JP) JAPAN DEC MACHINE ORDERS M/M: 8.3% V 2.3%E; Y/Y: 11.4% V 5.6%E; Govt raises machinery orders assessment
- (UK) UK JAN RICS HOUSE PRICE BALANCE: 7% V 12%E (lowest since May 2013)
***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 +1.9%, S&P/ASX -0.3%, Kospi -0.4%, Shanghai Composite -0.2%, Hang Seng +0.7%, Mar S&P500 -0.1% at 2,064
***Commodities/Fixed Income***
- Apr gold flat at $1,219, Mar crude oil +0.1% at $49.27/brl
- (JP) BOJ offers to buy ¥400B in 5-10yr JGBs, ¥240B in 10-25yr JGBs and ¥140B in JGBs with maturity over 25-yr
- (CN) PBoC to inject CNY80B in 21-day reverse repos and CNY80B in 14-day reverse repos (7th consecutive injection, biggest injection since Jan 2014); Injects net CNY205B this week v injected CNY90B prior (4th week of injection; biggest weekly injection since Jan 2014)
***Market Focal Points/FX***
- Sentiment see-sawed going into the US close and in the early hours of the Asian session, as conflicting reports on Greece directed volatile flows. Initial CNBC report of an 'agreement in principle' for Greece to remain in the bailout program was quickly negated, as Greek govt officials refuse to accept an extension of the bailout under the current terms of austerity. After a delay, Eurogroup's Dijsselbloem confirmed that negotiators could not achieve a conclusion despite some progress made in clarifying the positions of both sides, adding the existing program is only the starting point of discussion. Dijsselbloem concluded the address by noting talks will resume on Monday. Concurrent comments from Greek Fin Min Varoufakis were even less sanguine, stating that many concessions are still needed to reach a deal on Monday, reiterating Greece wants a new contract with Europe toward a "healing deal", and that the Greek side is seeking to explain why the current bailout conditions are not working. EUR/USD fell about 50pips toward $1.13 after confirmation the deal remains elusive.
- AUD/USD fell about 70pips below $0.7650 - within 20pips of 5-year lows - in the wake of weaker than expected Australia employment data. Employment change was negative for the first time in 4 months, and jobless rate spiked to its highest level in over 12 years with most of the job loss coming in the full-time component. Aggregate Hours worked was perhaps the silver lining in an otherwise glum report, rising by 8.2M hrs for the biggest increase in 7 months. S&P/ASX initially rose on easing expectations but subsequently retreated. ANZ, RBC, and CBA economists all concluded the jobs data will likely force RBA's hand into another easing move, with expected timing ranging from as early as next month to May.
- In China, PBoC cut RRR by 1% for Bank of Beijing, releasing an estimated CNY9B in liquidity. Later in the day, central bank's open market operations were also aggressive with CNY120B for the session and CNY205B for the week - both of those are the highest since last January - as policymakers anticipate credit spike going into next week's Lunar New Year.
- Japan machine orders were much stronger than expected, prompting an upgrade in govt assessment only a month after a cut on the sector. Econ Min Amari was upbeat on the progress made fighting deflation in spite of the falling oil prices. Japan cabinet also deflected overnight press reports of likely miss on fiscal balance objective by 2020, noting FY15 consolidation target will be met. USD/JPY briefly tested below 120 following the Greece developments before rising back above 120.30 in what appears to be its 3rd session of steady gains.
***Equities***
US markets:
- TRIP: Reports Q4 $0.35 v $0.37e, R$288M v $285Me; +13.7% afterhours
- CSCO: Reports Q2 $0.53 v $0.51e, R$12B v $11.8Be; +6.8% afterhours
- FXCM: Reports Jan Monthly Metrics +3% m/m to $450B; +32% y/y; +5.4% afterhours
- FEYE: Reports Q4 -$0.38 v -$0.50e, R$143.0M v $140Me; +5.1% afterhours
- NVDA: Reports Q4 $0.43 v $0.29e, R$1.25B v $1.20Be; +4.0% afterhours
- WFM: Reports Q1 $0.46 v $0.45e, R$4.67B v $4.68Be; +2.6% afterhours
- SKX: Reports Q4 $0.43 (incl items) v $0.44e, R$569.7M v $538Me; +2.0% afterhours
- MET: Reports Q4 $1.38 v $1.37e, R$18.3B v $18.2Be; -0.3% afterhours
- AMAT: Reports Q1 $0.27 v $0.27e, R$2.36B v $2.33Be; -1.9% afterhours
- TSO: Reports Q4 $1.46 v $1.48e, R$8.45B v $9.23Be; Raises quarterly dividend 41.7% to $0.425/shr, implied yield 1.9%; -2.0% afterhours
- CTL: Reports Q4 $0.60 v $0.63e, R$4.44B v $4.47Be; -2.3% afterhours
- TSLA: Reports Q4 -$0.13 v +$0.25e, R$1.10B v $1.19Be; Q4 shortfall due to 'one-time manufacturing inefficiencies' and strong dollar; -3.9% afterhours
- NTAP: Reports Q3 $0.75 v $0.77e, R$1.55B v $1.61Be; increases buyback program by $2.5B (20% of market cap); -5.3% afterhours
- CAKE: Reports Q4 $0.48 v $0.60e, R$499M v $510Me; -5.9% afterhours
- PNRA: Reports Q4 $1.87 (ex items) v $1.82e, R$672.5M v $675Me; -7.6% afterhours
- BIDU: Reports Q4 $1.61 v $1.61e, R$2.26B v $2.22Be; -9.2% afterhours
- ZU: Reports Q4 $0.11 v $0.14e, R$391.3M v $401Me; -22.0% afterhours
Notable movers by sector:
- Consumer Discretionary: China South Publishing & Media Group 601098.CN +3.4% (prelim FY14 results); Unicharm 8113.JP +3.4% (FY14 results); Tassal Group TGR.AU +3.6% (H1 results)
- Financials: Bank of Beijing 601169.CN +1.5% (PBoC cuts RRR for Bank of Beijing)
- Energy: Santos Ltd STO.AU -1.7% (to take impairment charges)
- Industrials: JGC Corp 1963.JP -3.1% (9-month results)
- Technology: Mesoblast Ltd MSB.AU +1.6% (H1 results); Kyocera Corp 6971.JP +3.7% (to sell smartphones in Europe)
- Telecom: Telstra Corp TLS.AU -0.1% (H1 results)