Asia trades mostly higher after US gains, Shanghai consumer staples lag

Asia Market Update: Asia trades mostly higher after US gains, Shanghai Consumer Staples lag; Samsung rises despite Q4 miss; Hyundai jumps on Apple news; Geely rises over 15% amid speculation related to Baidu; US jobs data due later today.

General Trend

- Nikkei rises amid gains in largest component Fast Retailing, Financials continue to rise with US Treasury yields

- Hang Seng TECH index tracks gain in the Nasdaq, index removals weighed on large Telecoms

- Gainers in Australia include Consumer Discretionary and Energy firms, Financials track rise in government bond yields

- TSMC might report Dec sales later today, Nanya Technology might issue Q4 results

Headlines/Economic Data

Australia/New Zealand

- ASX 200 opened +0.4%

- (AU) Australia PM Morrison: To require negative preflight coronavirus testing on international flights; To reduce arrival caps by half to certain states through Feb 15th; Masks to be worn on all domestic flights; Strengthening international arrivals due to UK coronavirus strain

- (AU) Australia Queensland State Premier: Greater Brisbane to go into 3-day COVID lockdown

- (AU) AOFM (Australia debt agency): Next Treasury bond tender planned for week of Jan 18th

China/Hong Kong

- Hang Seng opened +0.3%, Shanghai Composite flat

- (CN) FTSE Russell to delete China Mobile, China Telecom, and China Unicom from Global Indexes; MSCI to also remove these 3 cos. from its indexes

- (HK) Hang Seng: No plans to change composition of Index constituents; monitoring market developments - Responds to query related to China telecom stocks

- Geely [0175.HK]: Baidu reportedly plans to form smart electric vehicle company with Geely - press

- Alibaba [9988.HK]: China said to order Chinese media to censor coverage of Alibaba probe – FT

- (CN) China Internet Regulator: is looking for feedback on revised rules on internet information services

- (CN) China PBOC sets Yuan reference rate: 6.4708 v 6.4604 prior

- (CN) China PBOC Open Market Operation (OMO): Injects CNY5B in 7-day reverse repos v CNY10B in 7-day reverse repos prior; Net inject CNY5B v Net drain CNY110B prior

- *(CN) CHINA DEC FOREIGN RESERVES: $3.2165T v $3.200TE (from Jan 7th)

- (CN) China PBOC said to lower macro prudential adjustment ratio for corporate cross-border financing from 1.25 to 1.00 – press

- (CN) Shanghai Copper rises by 2.5%, trades at highest since late 2011

Japan

- Nikkei 225 opened +0.8%

- Honda [7267.JP]: Confirms domestic output could be affected due to Semiconductor chip shortages

- SVF Investment [SVFA]: Prices 52.5M unit IPO at $10/unit [co's sponsor is an affiliate of both SoftBank and SBIA]

- (JP) Japan MoF sells ¥900B v ¥900B indicated in 0.6% 30-year JGBs, avg yield 0.6480% v 0.6480% prior, bid to cover: 2.98x v 3.49x prior

- (JP) Japan PM Suga: Confirms State of Emergency for Tokyo and three other prefectures to curb spread of conoravirus; effective between Jan 8th through Feb 7th (as expected)

- (JP) Japan PM Suga: Will respond after liaising and checking situation (Responding to expanding state of emergency declaration

- (JP) Japan Fin Min Aso: Difficult to forecast how economy will perform in 2021; Emergency declaration will have impact on current quarter

- (JP) Japan Nov Household Spending M/M: -1.8% v +2.1% prior; Y/Y: +1.1% v -1.0%e

- (JP) Japan End of Dec FX Reserves $1.39T v 1.38T prior

- (JP) Japan Nov Preliminary Leading Index: 96.6 v 96.6e; Coincident Index: 89.1 v 89.4e

Korea

- Kospi opened +0.3%

- Hyundai Motor [005380.KR]: Said to be in talks with Apple regarding cooperation on the development of a self-driving electric car (EV); The cooperation could also relate to battery development. – Press

- Hyundai Motor: Follow Up: Said discussions with Apple at early stage; Apple in discussions with a variety of automakers, including Hyundai Motors

- Samsung Electronics [005930.KR]: Reports Q4 prelim (KRW) Op 9.0T v 9.5Te (vs KRW7.2T y/y) , Rev 61T v 62.0Te (vs KRW59.9T y/y)

- (KR) South Korea Court orders Japan to Pay KRW100M to each comfort woman used during WWII

- (KR) South Korea Nov Current Account: $9.0B v $11.7B prior; Balance of Goods (BOP): $9.5B v $10.2B prior

- (KR) Approval rating for South Korea President Moon declines to record low of 38% - Gallup Poll

North America

- (US) Fed's Bostic: Fed may taper bond purchases earlier than expected - Fox Business interview

- (US) Fed's Mester (FOMC voter): Optimistic H2 2021 [GDP] growth 'quite a bit stronger' than 2020; reiterates Fed policy is 'well calibrated' to [her] expectations for softening in H1, stronger H2; Fed will be patiently accommodative.

- (US) President Trump releases Video message as expected: Outraged by violence from mob; Focused on smooth and orderly transition of power

- (US) VP Pence opposes 25th Amendment efforts to remove Pres Trump from office after Capitol riot - Business Insider

- (US) Pres Trump reportedly has discussed pardoning himself - NY Times

- (US) FCC Spokesman: Chairman Pai to not proceed with Social Media rules proposed by President Trump

- (US) President-elect Biden said to consider requesting a $3.0T tax and infrastructure package, he also supports giving Americans the balance of their $2,000 stimulus checks [equal to $1,400]; the tax and infrastructure plan is part of Biden's 'Build Back Better' program. This plan was originally rolled out in July. - Axios

- Pfizer [PFE]: Says COVID-19 vaccine appears to work against both UK and South Africa variants of coronavirus

Europe

- (UK) UK Transport Sec: Will require mandatory coronavirus testing on all incoming passengers

Levels as of 00:20 ET

- Nikkei 225, +2.1%, ASX 200 +0.7% , Hang Seng +1.4%; Shanghai Composite -0.5% ; Kospi +3.1%

- Equity S&P500 Futures: +0.5%; Nasdaq100 +0.3%, Dax +0.6%; FTSE100 +0.3%

- EUR 1,2276-1,2234 ; JPY 103.99-103.77 ; AUD 0.7774-0.7740 ;NZD 0.7269-0.7239

- Gold -0.2% at $1,909/oz; Crude Oil +0.3% at $50.98/brl; Copper +0.1 at $3.7092/lb