Nikkei 225 Futures decline after recent gains

Asia Market Update: Nikkei 225 Futures decline after recent gains: PBoC injects record amount of cash amid focus on Lunar New Year liquidity conditions and tax payments

General Trend:

- Shares of big banks and Fast Retailing weigh on Nikkei

- Chinese equities trade generally flat in morning session

- China injects record amount through OMO operations ahead of Lunar New year holiday cash demands

- Little initial impact seen on Shanghai property index from new home price figures

- Tech names decline in Hong Kong: Lenovo drops on convertible offering, Xiaomi shareholder said to place shares

- Taiwan DRAM maker Nanya reports first annual profit decline in 3-years

- FTSE 100 Futures trade flat in Asia after recent Brexit vote

- China Bond Futures rise, PBoC steps up cash injection

- China pledges to ‘actively’ expand imports in 2019

- Australia Jan Westpac consumer confidence has largest m/m decline in over 3-years

- US companies expected to report earnings on Wed, including the afterhours (Alcoa, Bank of America , Bank of New York , BlackRock , CSX, Goldman Sachs, PNC, Charles Schwab, US Bancorp)

 

Headlines/Economic Data

Japan

- Nikkei 225 opened +0.1%

- (JP) Bank of Japan (BOJ) said to be planning to cut inflation (CPI) forecast due to lower oil costs, expected to keep policy unchanged at next meeting; BoJ outlook report to be released on Jan 23rd with price forecasts - US press

- (JP) JAPAN DEC PPI (CGPI) M/M: -0.6% V -0.3%E; Y/Y: 1.5% V 1.8%E

- (JP) JAPAN NOV CORE MACHINE ORDERS M/M: 0.0% V 3.0%E; Y/Y: 0.8% V 0.2%E

-(JP) Japan MoF sells ¥2.0T v ¥2.0T prior in 0.10% 5-yr JGB: avg yield: -0.144% v -0.112% prior, bid to cover: 5.15x v 3.84x prior

-(JP) Japan Chief Cabinet Sec Suga: To closely watch movements related to Brexit, will take steps to support Japanese companies impacted by Brexit

-(JP) Japan 2018 domestic beer and beer like shipments -2.5% y/y

Korea

- Kospi opened +0.1%

- (KR) South Korea President Moon: Our top conglomerates and large firms need to increase their local investment and create more jobs – Yonhap

- 005380.KR Analysts expect FY18 Net to be KRW2.3T, -50% y/y, due to slower sales in its major markets – Yonhap (will report on Jan 24th)

- (KR) South Korea Vice Finance Min says to deploy contingency plans to calm FX markets if volatilities widen - South Korean Press

- (KR) North Korea propaganda affirms commitment to denuclearization

China/Hong Kong

- Hang Seng opened -0.5%, Shanghai Composite -0.1%

- (CN) China Vice Premier Liu He (head of trade talks with US) accepts invite to visit Washington to discuss trade war Jan 30th and 31st – SCMP

- (HK) Hong Kong getting a boost from Chinese companies due to US ‘first sale’ rule allows duties to be levied only on the initial sale from the manufacturer to the initial wholesaler – SCMP

- (CN) China PBOC sets Yuan Reference Rate: 6.7615 v 6.7542 prior

- (CN) China PBoC Open Market (OMO): Injects CNY570B combined in 7-day and 28-day reverse repos (record high level for injection) v CNY180B injection of 7-day and 28-day prior; Net: CNY560B injection v CNY180B drain prior

- (CN) China PBoC: Banking system liquidity falls relatively fast, cash injection meant to maintain reasonably ample banking system liquidity

Overnight:

- (CN) CHINA DEC AGGREGATE FINANCING (CNY) 1.59T V 1.300TE

- (CN) CHINA DEC M2 MONEY SUPPLY Y/Y: 8.1% V 8.1%E; M1 Money Supply Y/Y: 1.5% v 1.6%e; M0 Money Supply Y/Y: 3.6% v 3.0%

- (CN) CHINA DEC NEW YUAN LOANS (CNY): 1.08T V 825.0BE; Outstanding Loan Growth y/y: 13.5% v 13.1% prior

- (US) Sen Grassley (R-IA): US Trade Rep Lighthizer told me he saw little progress in last week's talks with China on structural issues and IP protections

-(CN) Trump administration has told two senators that they will set up exclusion system for goods if next round of proposed tariffs against China go through - press

Australia/New Zealand

- ASX 200 opened flat

- (NZ) New Zealand Total Card Spending M/M: -1.9% v -0.3% prior; Retail Card Spending M/M: -2.3% v -0.4%e

- (AU) Australia Jan Westpac Consumer Confidence Index: 99.6 v 104.4 prior (first reading below 100 since Nov 2017); M/M: -4.7% v 0.1% prior

- MEL.NZ Reports Dec retail sales volumes -23.9% y/y

North America

-SNAP CFO Tim Stone to resign (8 months after joining); raises Q4 Rev and Adjusted EBITDA midpoint guidance - filing

-UAL Reports Q4 $2.41 v $1.84e, Rev $10.5B v $10.4Be

- (US) Fed's George (hawk, voter): Uncertainty over portfolio runoff effects offers an additional reason to pause rate hikes

Europe

- (UK) PARLIAMENT REJECTS PM MAY'S BREXIT DEAL PROPOSAL BY 432-202 VOTE (LARGER MARGIN THAN EXPECTED)

-(UK) EU urging UK to clarify their intentions on Brexit deal

 

Levels as of 12:50ET

- Hang Seng +0.1%; Shanghai Composite -0.1%; Kospi +0.3%; Nikkei225 -0.6%; ASX 200 +0.4%

- Equity Futures: S&P500 +0.2%; Nasdaq100 +0.1%, Dax +0.0%; FTSE100 +0.3%

- EUR 1.1396-1.1418; JPY 108.38-108.75; AUD 0.7189-0.7208; NZD 0.6806-0.6827

- Feb Gold +0.2% at $1,290/oz; Feb Crude Oil +0.0% at $52.13/brl; Mar Copper +0.5% at $2.65/lb