China Vice Premier may visit the US for trade talks

Asia Market Update: China Vice Premier may visit the US for trade talks, but partial gov’t shutdown is a risk; US dollar trades weaker amid comments from Fed Vice Chair

General Trend:

- Shanghai trades flat during morning session: Telecoms outperform, property index declines

- Resources and Financials indices weigh on shares in Australia

- Nikkei rises, Fast Retailing gains over 5% post earnings

- Hitachi rises on speculation it may halt UK nuclear project

- Hong Kong listed Kingsoft considering business collaboration with JD.com

- Error related to unemployment benefits may impact Japan’s budget (officials)

- US dollar trades generally weaker after Fed comments

- Fed Vice Chair Clarida said can afford to be ‘patient’; Won't hesitate to change balance sheet runoff if necessary

- Partial US government shutdown enters 21st day as of Friday, tying the record

- Trump continues to leave national emergency option on the table

- China Dec Trade Balance data said to be due on Jan 14th (Monday)

Headlines/Economic Data

Australia/New Zealand

- ASX 200 opened flat

- (AU) AUSTRALIA NOV RETAIL SALES M/M: 0.4% V 0.3%E

- (AU) Australia Dec AiG Performance of Construction Index: 42.6 v 44.5 prior

- (NZ) New Zealand Nov Building Permits M/M: -2.0% v 1.4% prior

China/Hong Kong

- Shanghai Composite opened +0.2%, Hang Seng +0.6%

- (US) US Treasury Sec Mnuchin: China Vice Premier Liu He will most likely visit Washington later in Jan for trade talks

- (US) There are concerns that US partial government shutdown could delay the Jan trip of China Vice Premier Liu He to Washington; the trip is expected on Jan 30-31 - US financial press

- (CN) China to reportedly to set lower 2019 GDP growth target of 6.0-6.5% - press

- (CN) CHINA PBOC SETS YUAN REFERENCE RATE: 6.7909 V 6.8160 PRIOR (strongest yuan fix since late July 2018)

- (CN) China PBoC Open Market (OMO): Skips OMO for 4th consecutive session ; Net: CNY110B drain v CNY40B drain prior

- (CN) China said to tighten oversight of research reports by brokerage firms - Chinese Press

- (CN) China Industry Min Miao Wei: Sees more room for tax cuts in manufacturing sector

- (CN) China Agriculture Ministry: Raises 2018/19 Soybean output 16MT (prior 15.8MT)

Japan

- Nikkei 225 opened +0.7%

- (JP) Nikkei 225 Jan Options said to settle at ~20,291

- Nissan [7201.JP]: Japan prosecutors indict former Chairman Carlos Ghosn for aggravated breach of trust; Ghosn, Kelly and Nissan itself indicted on new charge of breaking financial law -

Japanese press

- Reportedly Japan government owes billions of yen in unemployment benefits - Nikkei

- (JP) Japan Labor Minister Nemoto: Polling discrepancies caused regular pay to be understated from 2004 to 2017; Estimates the benefit shortfalls total ¥53.6B

- (JP) Japan Fin Min Aso: Confirms the Labor Ministry is conducting research into wage data, highly likely that the wages data and FY19/20 budget will be revised

- (JP) Japan Chief Cabinet Spokesman Suga: Government will check all economic data, following revelations of flaws in wage data; will alter next FY budget as needed to repay benefits

- (JP) Reportedly to delay release 2018 stock section of national accounts

- (JP) JAPAN NOV PRELIMINARY CURRENT ACCOUNT: ¥757.2B V ¥560.2BE; TRADE BALANCE -¥559.1B V -¥614.3BE

- (JP) Japan Nov Household Spending Y/Y: -0.6% v -0.3% prior

- (JP) Japan Dec Bank Lending Ex-Trusts Y/Y: 2.5% v 2.2% prior; Bank Lending Incl Trusts Y/Y: 2.4% v 2.1% prior

- (JP) Japan investors purchased net ¥561.8B in foreign bonds in Dec
- (JP) JAPAN DEC ECO WATCHERS SURVEY CURRENT: 48.0 V 50.7E; OUTLOOK: 48.5 V 51.4E

Korea

-Kospi opened +0.3%

- (KR) Second summit between US President Trump and North Korea Leader Kim could be held during the second week of Feb - South Korean Press

Other

- (PH) Philippines Financials Stock index declines over 2.8%

- (PH) 5 banks in the Philippines are said to have over $400M in total exposure to the Philippines unit of Hanjin Heavy Industries [097230.KR], according to a Philippines press report

- (MY) Malaysia Nov Industrial Production Y/Y: 2.5% v 2.3%e

- (SG) Singapore Nov Retail Sales M/M: 0.2% v 0.6%e: Y/Y: -3.0% v -2.4%e

- (TW) Taiwan Premier Lai formally resigns at cabinet meeting (as expected)

North America

- (US) US President Trump: Most likely will declare emergency if no border deal; should be able to do deal with Congress

- (US) Pres Trump has been reportedly briefed on plan to use Army Corps of Engineers funding for construction of border wall - NBC News

- (US) Sen Collins (R-ME) says a deal for bipartisan immigration deal to end the govt shutdown is all but dead - Wash Post

- (US) Fed Chair Powell: We have ability to be patient, flexible, and watch patiently at this time; Fed balance sheet will end up "substantially smaller" - comments in Washington

- (US) Fed Vice Chair Clarida (moderate, voter): If economic crosswinds are sustained, Fed policy should respond to offset them - comments in NYC

- (US) Fed's Evans (dove, voter in 2019): Fed can easily look at data for six months before hiking rates

Levels as of 01:00ET

- Nikkei 225, +1%, ASX 200 -0.4%, Hang Seng +0.3%; Shanghai Composite +0.5%; Kospi +0.5%

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

- EUR 1.1530-1.1496 ; JPY 108.52-108.22 ; AUD 0.7215-0.7175 ;NZD 0.6818-0.6777

- Feb Gold +0.4% at $1,292/oz; Feb Crude Oil -0.2% at $52.50/brl; Feb Copper +0.8% at $2.656/lb