ASX record high while Asia down – AU CPI and CN manufacturing PMI soft

Asia market update: ASX record high while Asia down; AU CPI & CN Mfng PMI soft; JP data underwhelms; Samsung earnings disappoint; JP BOJ Members see “golden opportunity”; Nasdaq FUTs down on tech earnings; Eyes on FOMC decision.

- Australia CPI comes in below estimates; Analysts reprice expectations of a potential rate hike by the RBA in Feb. Aussie 10-yr yields fall 8bps with 3-yr down 10bps.

- The ASX 200 hit a record high, with REITs and financials outperforming amid the softer CPI data.

- AUD falls post-CPI data, and continued to fall along with the Kiwi after the China PMI data.

- China official Jan Manufacturing PMI stayed in contraction for the fourth consecutive month, while Chinese govt bond yields continue to fall to multi-decade lows.

- Samsung Electronics 2023 Net Profit was the lowest since 2011, with the company’s outlook for 2024 suggesting some continued ‘selective production adjustment’ of memory chips in H1. Stock -1.2% two hours after release.

- Asia chipmakers down post Samsung release and AMD -6% A/H & Nvidia -1.8% A/H; with Tokyo Electron -1.8%, TSMC -0.8%, Advantest -0.8% (Advantest earnings post-Nikkei close today).

- South Korea Dec Industrial Production beats estimates, with chip shipments the highest since 1997.

- Japan BOJ Summary of Opinions continues to set the path for a potential normalization of rates, with the phrase “Now is a golden opportunity” sticking out in the notes, as well as talk of “preparing the Japanese public for terminating negative rates”. Sequencing options now being debated.

- Japan Dec prelim Industrial Production and Retail Sales much worse than expected; Will this further stay the BOJ’s hand?

- New Zealand January Business Confidence continued its rise since October 2023, post the national election which saw a conservative coalition govt installed that is viewed as more economy and business-friendly.

- Still waiting on US response to Jordan drone strikes that killed three US soldiers, seeing speculation about scale of response and political implications for Pres Biden. In the interim Iran fires off a warning about any attempted attacks to its interests anywhere.

- US equity FUTs down heavily during Asian trading.

Looking ahead (Asian time zone)

- Thu 1st (early morning) US FOMC decision; China Caixin Manufacturing PMI, Thu evening EU Jan CPI, BoE rate decision, OPEC+ Meeting, Thu night US ISM Manufacturing PMI + Key US Corporate releases during Asia Thu morning: QCOM (Qualcomm) FQ1 earnings preview (A/H release on Wed afternoon US time).

- Fri 2nd Key US Corporate releases during Asia Fri morning: AAPL (Apple) FQ1, AMZN (Amazon) & META FQ4 earnings preview (A/H release on Thu afternoon US time); Fri night US jobs report / Non Farm Payrolls.

Holidays in Asia this week

- Thu Feb 1st Malaysia.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens -0.1% at 7,600.

- ASX 200 hits record high at 7,651; REITs outperform amid softer CPI data.

- Australia Q4 CPI Q/Q: 0.6% V 0.8%E; Y/Y: 4.1% V 4.3%E.

- Australia Dec CPI Y/Y: 3.4% V 3.7%E.

- Australia Dec Private Sector Credit M/M: 0.4% v 0.4%e; Y/Y: 4.8% v 4.7% prior.

- RBC no longer sees one more RBA rate hike this year.

- Australian Treasurer Chalmers: Good progress, but not mission accomplished on inflation - Press Conference on CPI.

- New Zealand Jan ANZ Business Confidence: 36.6 v 33.2 prior.

- New Zealand RBNZ Gov Orr to speak Feb 16 on Monetary Policy remit and 2% inflation.

- New Zealand Foreign Min Peters: Washington needs to do more in the Pacific to counter other political influences - New Zealand press.

- New Zealand Fin Min Willis: NZ economy at or near bottom of cycle, citing Treasury Dept.

China/Hong Kong

- Hang Seng opens -0.3% at 15,652.

- Shanghai Composite opens -0.5% at 2,815.

- China Jan manufacturing PMI (govt official): 49.2 V 49.3E (fourth month of contraction).

- China 30-yr govt bonds fall 3bps to 2.645%, fresh lowest on record.

- China ETF inflows beat 2015 levels, said to suggest a state rescue - China press.

- Swiss bank Lombard Odier cuts Chihina jan manufacturing pmi (govt official)na asset allocation amid challenges facing the world’s number two economy - Hong Kong press.

- China bond rally to continue on rate cut prospects - China Securities Journal.

- China Pres Xi promised Biden China wouldn’t interfere in 2024 election – CNN (overnight update).

- China Financial Regulator (NFRA): Will guard against and resolve local debt risks. To guide financial institutions on debt restructuring and swaps (overnight update).

- China Vice Foreign Min: China supports Yemen in safeguarding its sovereignty, independence and unity (overnight update).

- China MOFCOM: Aware of reports of US searches on Chinese companies in US (overnight update).

- China PBOC sets Yuan reference rate: 7.1039 v 7.1055 prior.

- China PBOC Open Market Operation (OMO): Sells CNY544B in 7-day reverse repos; Net injects CNY81B v injects CNY98B prior.

Japan

- Nikkei 225 opens -0.9% at 35,747.

- Japan Dec preliminary industrial production M/M: 1.8% V 2.5%E; Y/Y: -0.7% V 0.2%E.

- Japan De Retail Sales M/M: -2.9% V 0.2%E; Y/Y: 2.1% V 5.1%E.

- BoJ Jan summary of opinions: Now is a golden opportunity, but shifts in monetary policies of overseas central banks could reduce the flexibility of the Bank's monetary policy.

- JERA Official: A pause on US LNG export permits could affect Japan and rest of world's energy security if issue persists - Japan press.

- Japan PM KIshida: Will ensure disposable income will rise faster than prices - Japan press.

- Japan to provide support for joint Capex in EV batteries - Japan press.

- Daiichi Sankyo (4568.JP) Co to raise wages by aapan dec preliminary industrial productionvge >7% - Japan press.

- (RU) Russia Dep Chair of Security Council Medvedev (former Pres): Russia plans to deploy new weapons on Kuril Islands in the Far East (overnight update).

- Bank of Japan (BOJ) announcement related to daily outright bond buying operation: Amounts unchanged for Feb JGB purchases (overnight update).

South Korea

- Kospi opens -0.4% at 2,487.

- South Korea Dec Industrial Production M/M: 0.6% v 0.1%e; Y/Y: 6.2% v 5.3%e (Chip shipments +113.7% y/y, most since 1997).

- Samsung (005930.KR) Reports Q4 final (KRW) Net 6.3T v 3.16Te (23.5T* y/y), Op 2.82T v 2.8T prelim (4.31T y/y), Rev 67.8T v 67.0T prelim (70.5T y/y).

- Bank of Korea (BoK) Jan Minutes: Board member said restrictive policies need to be kept until we are sure inflationary pressure has eased (overnight update).

Other Asia

- Singapore Dec M2 Money Supply Y/Y: 4.7% v 5.3% prior.

- Singapore Dec Unemployment Rate: 2.0% v 2.0%e.

- Philippines Q4 GDP Q/Q: 2.1% v 1.7%e; Y/Y: 5.6% v 5.2%e.

- Thailand Dec ISIC Manufacturing Production Y/Y: -6.3% v -3.0%e.

- Bank of Indonesia (BI) Gov Warjiyo: Still sees window for a rate cut in H2.

- Taiwan FSC Chairman Thomas Huang: Sees impact of inflation on Taiwan stocks easing this year, but warns of geopolitical risks and climate change – press (overnight update).

North America

- TuSimple (TSP) US investigation said to have halted chips that Co was said to be shipping abroad, potentially to China.

- (US) White House Energy Official Hochstein: Oil demand and supply are well balanced; Red Sea conflict effect on supply is manageable.

- (US) Nov FHFA house price index M/M: 0.3% V 0.3%E.

- (US) Nov S&P/corelogic house price index (20-city) M/M: 0.15% V 0.50%E; Y/Y: 5.40% V 5.80%E.

- (US) Dec JOLTS job openings: 9.026M V 8.750ME; Quits rate 2.2% v 2.2% prior.

- (US) Jan consumer confidence: 114.8 V 114.5E; Those saying jobs are "plentiful": 45.5% v 40.4% prior (revised from 40.7%).

Europe

- (IR) Iran Envoy to UN says any attack on Iran or its interests or nationals outside its borders will be met with definitive response - Iran press.

- UK Times Shadow MPC: Says BOE should leave rates unchanged, resist forward guidance; calls for caution from the BOE.

- (EU) ECB's Vujcic (Croatia): Need more data for a rate cut; April or June for first rate cut is not a big difference; Supportive of 25bps cuts, and pauses are possible.

- (DE) German IGBCE chemical union decides to demand wage increase of 6-7%.

- IMF updates world economic outlook: 2024 GDP growth forecast: 3.1% V 2.9% prior.

- (EU) ECB chief Lagarde: A new Trump presidency could mean tariffs on Europe; Trump may mean harsh and unexpected decisions for Europe.

- (EU) ECB’s Makhlouf (Ireland): We should remain open-minded about the rate path, which is the essence of data dependence.

Levels as of 00:20 ET

- Nikkei 225 +0.1% ; ASX 200 +1.1% ; Hang Seng -1.3% ; Shanghai Composite -0.7% ; Kospi -0.4%.

- Equity S&P500 Futures -0.4%; Nasdaq100 -0.8%, Dax +0.2%; FTSE100 +0.1%.

- EUR 1.0816-1.0848 ; JPY 147.19-147.82 ; AUD 0.6559-0.6604 ; NZD 0.6112-0.6137.

- Gold flat at $2,051/oz; Crude Oil -0.4% at $77.53/brl; Copper -0.5% at $3.8933/lb.