Asian equity markets, Futures decline

Asia Market Update: Asian equity markets, Futures decline: China Dec exports and imports show surprise drop as 2019 trade growth may slow

General Trend:

-Market participation limited on today’s session due to Japan holiday

-Shares of Geely (denies report is reduced stake in Daimler) and Tencent are among the decliners in Hong Kong

-Telecom and property sectors decline in Shanghai

- Hong Kong officials again defend property measure curbs

- Chinese healthcare companies decline amid reports of expired polio vaccines

-Singapore’s Capitaland to pay $8.0B to acquire property assets from Temasek

- China overall 2018 Trade Balance with US $323.3B, +5.7% y/y (highest level since 2006); Exports +11.3% y/y; Imports +0.7% y/y

- China reports 2018 trade data, warns trade growth may slow in 2019, still worries about external uncertainties and protectionism

- China Dec trade date records decline in exports (1st decline in 8-months and largest decline since Dec 2016); (CN) CHINA DEC TRADE BALANCE: $57.1B V $51.6BE (largest surplus since 2015); Exports YoY: -4.4% v 2.0%e (largest decline since Dec 2016); Imports YoY: -7.6% v 4.5%e (largest decline since July 2016)

- China said to delay approval of domestic licenses for Mastercard and Visa (press)

- PBoC uses 28-day reverse repo for the first time since June 2018

- Yuan rises after stronger fix , but erases gain after Dec trade data

- Commodity currencies weighed down by China data and equity declines

- Record partial US government shutdown entered day 23 as of Sunday; economists start to trim Q1 growth ests (press), while US airports are being impacted

-Trump issued warning to Turkey regarding Syria, Lira (TRY) declines


Headlines/Economic Data


- Nikkei 225 closed for holiday

- (JP) Nikkei 225 Futures -0.3% at 20,225

-7201.JP CEO Saikawa said to be having a hard time with leading Nissan as he was always told what to do by former Chairman Ghosn - Nikkei


-Kospi opened -0.3%

-(KR) President Trump has offered to meet North Korea leader Kim mid-Feb in Vietnam (as speculated) for a second summit – Yonhap

- (KR) Korea Development Institute (KDI) monthly report: economic downturn seems to continue with signs of sluggish domestic demand and a slowing pace of exports

- (KR) North Korea calls for full scale economic cooperation with South Korea; South's economy would be better off now if it had pushed strongly for cross-border exchanges - North Korea propaganda outlet

China/Hong Kong

-Hang Seng opened -0.4%, Shanghai Composite flat

-(CN) CHINA 2018 TRADE BALANCE: $351.8B v $422.5B y/y; Exports Y/Y: 9.9% v 7.9% y/y; Imports Y/Y: 15.8% v 15.9% y/y; Trade Surplus with the US +5.7% y/y

- (CN) China 2018 Trade Balance (CNY): CNY2.33T v 2.87T in 2017; Exports in yuan Y/Y: 7.1% v 10.8% in 2017; Imports in yuan Y/Y: 12.9% v 18.7% in 2017

-(CN) CHINA DEC TRADE BALANCE: $57.1B V $51.6BE; Exports YoY: -4.4% v 2.0%e; Imports YoY: -7.6% v 4.5%e

- (CN) CHINA DEC TRADE BALANCE (CNY-TERMS) 394.9B V 345.0BE; Exports y/y: +0.2% v 6.6%e; Imports y/y: -3.1% v 12.0%e

- (CN) China FX Regulator SAFE: Raises QFII quota to $300B from $150B

-(CN) China Dec Foreign Direct Investment YTD: 3% v -1.3% prior

- HUAWEI.CN Fires sales director, Wang Weijing, who was arrested in Poland on charges of spying on behalf of China, saying he brought the company into disrepute, alleged actions were unrelated to the company – press

- (HK) Hong Kong Exchange said to warn of closer scrutiny for IPOs of small companies - Local Press

- (CN) Analysts expect the China yuan (CNY) to have 'two-way' fluctuation in the future – Xinhua

- (CN) China Banking and Insurance Regulatory Commission (CBIRC) reports 2018 China commercial banks' non-performing loan (NPL) ratio: 1.89% v 1.87% in Q3; Total onshore assets CNY261.4T, +6.4% y/y

- (CN) China Securities Regulatory Commission (CSRC) Deputy Chief Fang Xinghai: Expect that China stock market will see an inflow of foreign capital totaling ~CNY600B – Xinhua

- (CN) China Commerce Min Zhong Shan: Will focus on reducing trade tensions with the US, including conscientiously implementing the trade plan reached by Trump and Xi at the G20 in Argentina in Dec – Xinhua

- (CN) CHINA PBOC SETS YUAN REFERENCE RATE: 6.7560 V 6.7909 PRIOR (strongest setting since July 19, 2018)

- (CN) China PBoC said to be wary of any sharp CNY currency(Yuan) appreciation - press (from Jan 11th)

- (CN) China PBoC Open Market (OMO): Injects CNY100B combined in 7-day and 28-day reverse repos v skips prior; Net: CNY20B injection v CNY110B drain prior

- (HK) Hong Kong Fin Sec Chan: Do not see any need to relax property curbs


Australia/New Zealand

- ASX 200 opened flat

- (AU) Australia's big 4 banks working to convince APRA to reconsider its proposal for too big to fail capital requirements – AFR

- WES.AU Guides H1 retail units trading in line with expectations except department stores; expect to record gain of A$670-680M on sale of Bengalla, $98M on disposal of Quadrant Energy

- (AU) Australia Dec Melbourne Institute Inflation m/m: 0.4% v 0.0% prior; y/y: 1.9% v 1.6% prior

- FMS.AU Notes lodgement of additional Takeovers Panel application [+22%]

-(AU) Australia PM Morrison rules out early election, Govt will hand down budget on April 2nd - Australian

Other Asia

- ASCHT.SG Capitaland to acquire Ascendas Pte and Singbridge Pte in S$11B cash and share deal, to create Asia’s largest diversified real estate group

North America

- PCG Said to be in talks with banks about multi-billion dollar bankruptcy financing; may announce Monday to employees that it is preparing a bankruptcy filing - US financial press

- GCI MNG Enterprises (or Digital First) said to offer $12/share, disclosed 7.5% stake - US financial press

- (TR) US President Trump: To 'devastate Turkey economically' if they hit Kurds – tweet

- (US) Economists have trimmed their estimate for Q1 US GDP growth to 2.2%, down slightly vs estimates before start of government shutdown; larger impact on growth seen if shutdown continues

- (US) White House officials have warned Republicans not to expect an immediate end to the shutdown even if a national emergency is declared – Politico

- (US) US Senator Graham (R-SC) said President Trump is ready to end shutdown; 3 recent polls show Americans blame President Trump for the continued shutdown - DailyMail


- (UK) PM May: Time to forget games and do what is right; Failure to back deal will put at risk for a no deal Brexit - UK press Op Ed

- (UK) UK govt comments on Brexit vote (Tuesday): any defeat by fewer than 100 votes would be counted as a good result - UK press

- (GR) Greece PM Tsipras calls for vote of confidence in Govt after a junior coalition partner, Defense Min Kammenos, announced that he would quit in protest of a deal to end a dispute with Macedonia over its name - press

- (SA) Saudi Energy Minister Khalid al-Falih said there is no need for extraordinary OPEC meeting before April, oil market is on 'right track' - financial press

- (IR) US Special Representative for Iran Brain Hook said the US is not looking to issue additional waivers for Iran oil imports - financial press


Levels as of 12:50ET

- Hang Seng -1.7%; Shanghai Composite -0.7%; Kospi -0.7%; Nikkei225 +1.0%; ASX 200 -0.0%

- Equity Futures: S&P500 -0.8%; Nasdaq100 -1.1%, Dax -0.7%; FTSE100 -0.5%

- EUR 1.1478-1.1442; JPY 108.56-108.06; AUD 0.7218-0.7179; NZD 0.6832-0.6802

- Feb Gold +0.1% at $1,291/oz; Feb Crude Oil -1.0% at $51.07/brl; Mar Copper -0.9% at $2.63/lb

All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.