Asia Market Update: Asian indices trade mixed despite the slight gains seen on Wall St; BOK expected to raise rates on Fri; China Dec Trade Balance seen Jan 13-14th.

General trend

- US dollar trades mixed in Asia; USD index declined during NY trading amid CPI data and Fed speak.

- Asian corporate earnings in focus [Fast Retailing, Seven & I, Largan]; Taiwan Semi may report Q4 results/guidance (US financial press).

- Nikkei 225 underperforms and extends decline [Index heavyweight Fast Retailing drops ahead of earnings report].

- Hang Seng pared the opening gain [Mainland Property index drops by >2.5%; TECH index also declines].

- HK corporate debt and property sector remain in the headlines [Sunac, Genting HK, Yuzhou Properties ].

[Reminder]: Evergrande extended bondholders meeting voting period to Jan 13th (Thurs).

- Shanghai Composite ended morning trading slightly lower [Property and IT indices decline

- S&P ASX 200 pared gain [Consumer indices lagged; Financial and commodity-sensitive indices rose].

- Japan’s money supply continued to slow in Dec.

- South Korea Dec bank lending to households slowed in Dec [first decline in 7 months]; BOK expected to raise rates on Fri.

- China’s Commerce Ministry (MOFCOM) sometimes holds weekly news conferences on Thurs.

- PBOC generally conducts MLF operations around the 15th of the month.

- Companies due to report during the NY morning include Delta.

Headlines/Economic data

Australia/New Zealand

- ASX 200 opened +0.2%.

- CWN.AU Receives revised offer from Blackstone of A$13.10/shr cash (prior A$12.50/shr).

- LTR.AU CEO Ottaviano: Not concerned about a lithium oversupply, its much harder to bring online supply then people think, the avg time for the first tonnes is 5-7 years – AFR (shares +5.2%).

- (NZ) New Zealand Nov Building Permits M/M: +0.6% v -2.1% prior.

- IMC.AU Gets European patent on drug to treat travelers' diarrhea (shares +16.5%).

Japan

- Nikkei 225 opened -0.4%.

- (JP) Japan govt expects to achieve primary balance surplus in FY26 (a year earlier than previously expected) due to higher growth - Japan press.

- (JP) Tokyo, Japan raises covid alert level to the second highest level (4 tiers) - Japan press.

Korea

- Kospi opened +0.3%.

- (KR) South Korea President Moon: Proposing using excess tax revenue for small merchants.

- (KR) South Korea Dec Export Price Index Y/Y: 23.5% v 25.5% prior; Import Price Index Y/Y: 29.7% v 35.0% prior.

- (KR) South Korea Nov YTD Tax Rev (KRW) 323.4T v 267.8T y/y (MoF estimated 2021 to be 314.3T ).

- 005490.KR Reports prelim FY21 (KRW) Op 9.2T v 9.3Te, Rev 76.4T v 75Te (late session yesterday).

- (KR) US Ambassador to UN has proposed additional sanctions on North Korea.

China/Hong Kong

- Hang Seng opened +0.7%; Shanghai Composite opened +0.1%.

- (CN) China 2022 inflation seen rising but is expected to be manageable - China Securities Journal.

- 6030.HK Reports prelim FY21 (CNY) Net 22.9B v 14.9B y/y; Op 32.3B, +57% y/y; Rev 76.6B v 71.9B y/y.

- (CN) China PBOC sets Yuan reference rate: 6.3542 v 6.3658 prior.

- (CN) China PBOC Open Market Operation (OMO): Sells CNY10B in 7-day reverse repos v CNY10B prior; Net CNY0B v CNY0B prior.

- (CN) China State Council announces plan to facilitate the development of the digital economy in the 14th Five-Year Plan period (2021-2025); Aiming to raise the proportion of the added value of core digital economy industries in its GDP to 10% in 2025, up from 7.8% in 2020.

- (CN) China Dec Passenger Vehicle sales Y/Y: -1.6% v -9.1% prior – CAAM.

- (CN) China Association of Automobile Manufacturers sees 2022 NEV sales at 5M units, +42% y/y – Press.

- (CN) China has found the omicron variant in Dalian - Xinhua.

Yesterday later in session:

- (CN) CHINA DEC NEW YUAN LOANS (CNY): 1.130T V 1.250TE.

- (CN) CHINA DEC M2 MONEY SUPPLY Y/Y: 9.0% V 8.6%E.

- (CN) CHINA DEC AGGREGATE FINANCING (CNY): 2.370T V 2.400E.

Other

- (TH) Thailand Premier has asked agencies to consider price ceilings on consumer goods.

North America

- (US) Fed's Daly (non-voter, dove): inflation is uncomfortably high, See increase in rates as early as Mar; Expects prices to moderate after coronavirus and Fed ends accommodation.

- (US) Fed Vice Chair nominee Brainard: Pandemic continues to pose challenges; Slowing too high inflation is Feds most important task - prepared remarks ahead of confirmation hearings.

- (US) Fed's Bullard (2022 voter, hawk): Four rate hikes in 2022 now appear likely; March hike is very likely amid high inflation.

- (US) Trade Rep Tai: US has formally begun consultations with Japan on Section 232 steel and aluminum tariffs.

- (US) Fed’s Harker (non-voter) said to be open to over 3 rate hikes in 2022 if "very bad" inflation gets worse - FT.

Europe

- (UK) UK Upper House Lawmaker statement: Central Bank digital currency for wholesale use should be looked at in more detail.

Levels as of 00:15ET

- Hang Seng -0.3%; Shanghai Composite -0.8%; Kospi -0.3%; Nikkei225 -0.9%; ASX 200 +0.5%.

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

- EUR 1.1448-1.1436; JPY 114.71-114.50; AUD 0.7293-0.7274; NZD 0.6862-0.6830.

- Commodity Futures: Gold -0.0% at $1,827/oz; Crude Oil -0.3% at $82.41/brl; Copper -0.4% at $4.54/lb.

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