Equities trade generally lower, CN/HK banks outperform amid MLF and earnings

Asia Market Update: Equities trade generally lower, CN/HK banks outperform amid MLF and earnings; USD rises vs. commodity currencies, UST FUTs rise; Biden confirmed stimulus plan; US banks to report EPS.

General Trend

- Decliners in Japan include Iron/Steel, Auto and Marine Transportation firms; Fast Retailing (largest Nikkei component) drops after earnings/outlook; Canon Inc rises on raised outlook

- Shanghai Composite declined during the morning session, despite the gains in financials; Consumer Staples index drops over 3.5%, Kweichow Moutai declines over 4%

- Hang Seng Finance index rises, China Merchants Bank rises after prelim results; TECH index declines by over 1%, Xiaomi drops over 10% on US move

- Resources firms were among the gainers in Australia, Consumer cos. lagged

- Taiwan Semi rises over 3% after results and outlook

- BOK commented on equity markets, no specific currency-related remarks seen

- Companies expected to report earnings during the NY morning include Citigroup, Flex Ltd, JPMorgan, PNC Financial, Wells Fargo

- China Q4 GDP data is due on Monday (Sunday night in the US)

- US President-elect Biden has promised to release details on trade plan on Jan 21st (Thursday)

Headlines/Economic Data

Australia/New Zealand

- ASX 200 opened +0.3%

- (AU) Australia Debt Agency (AOFM) Gives 2020-2021 Bond issuance program update: To issue new Treasury bond maturing Nov 2032 via syndication; affirms total issuance in 2020-2021 to be ~A$230B; Bond issuance to be around A$2-3B in most weeks.

- (AU) China said to be considering allowing some imports of Australia Coal Cargo; broader ban on coal imports remains in effect

- (NZ) Reserve Bank of New Zealand (RBNZ) to offer to buy a total of NZ$650M in government bonds next week under QE program v NZ$800M prior

- (NZ) Reserve bank of New Zealand (RBNZ) Gov Orr: Committed to action as it responds to data breach

- (NZ) New Zealand Dec Food Prices M/M: +0.1% v -0.9% prior

- (NZ) New Zealand Dec REINZ House Sales Y/Y: 36.6% v 29.6% prior

China/Hong Kong

- Hang Seng opened -0.4%, Shanghai Composite flat

- (US) President Trump Administration said to add China's Comac, Xiaomi to military blacklist - press

- *(CN) CHINA PBOC CONDUCTS CNY500B 1-YEAR MEDIUM-TERM LENDING FACILITY (MLF) V OPERATION V CNY950B PRIOR: RATE 2.95% V 2.95% PRIOR [RECORD AMOUNT FOR A MLF OPERATION, MLF RATE LEFT UNCHANGED FOR THE 9TH STRAIGHT MONTH]

- (CN) China PBOC Open Market Operation (OMO): Injects CNY2B in 7-day reverse repos v CNY2B in 7-day reverse repos prior; Net drain CNY3B v Net drain CNY8B prior

- (CN) Analysts in China do not believe a PBOC RRR cut is needed, suggests China could use various tools (including MLF, reverse repo and contingency reserve allowance) to increase liquidity ahead of the Lunar New Year Holiday [in mid-Feb] - Chinese press

- (CN) China Daily: Price stability is key priority for PBOC (

- Ant Financial: Backers of the IPO do not know when the offering can be revived - FT

- SInopharm [1099.HK] Confirms vaccine effective against UK variation

- CNOOC [883.HK]: Follow Up: Added to the US Commerce Dept 'Entity List', restrictions related to the company will not apply to crude oil

- (CN) China PBOC sets Yuan reference rate: 6.4633 v 6.4746 prior

- *(CN) CHINA DEC NEW HOMES PRICES M/M: 0.1% V 0.1% PRIOR; Y/Y: 3.8% V 4.0% PRIOR

- (CN) China Ministry of Finance (MOF) sells 3-month bills and 30-year bonds

Japan

- Nikkei 225 opened +0.3%

- (JP) Japan PM Suga said to be urged to consider calling a national emergency for the pandemic situation (from Jan 14th)

- (JP) Bank of Japan (BOJ) Former Official Maeda : BOJ is likely to pause ETF purchases if stocks 'soar' - Financial Press

- (JP) Japan MOF Comments: Japan Short term debt had record foreign demand last week

Korea

- Kospi opened +0.1%

- (KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 0.50%; AS EXPECTED; Risk appetite has strengthened in financial markets; Monitoring liquidity inflow into stock market; Monitoring changes in financial stability; difficult to judge if there is a bubble in the Domestic stock market; Watching risk of heightened financial imbalances as inflows into asset markets continue; -Concerned on stock investment based on excessive leverage; Closely monitoring equity market volatility

Other Asia

- (ID) Indonesia Dec Trade Balance: $2.1B v $2.5Be

North America

- (US) President Elect Biden: Announces $1.9T coronavirus relief proposal (as expected); Debt situation will be more stable if we seize moment

- (US) Fed Chair Powell: Policy will continue to reflect broad considerations, not mathematically tied to any formula for inflation, will use element of judgment; Taper tantrum highlights sensitivity regarding bond buying

Europe

- (DE) New planned COVID lockdown measures in Germany reportedly might include closing schools - German press

- (IT) Italy cabinet approved request for €32B in extra budget deficit (as expected)

- SAP [SAP.DE]: Reports prelim Q4 Rev €7.54B v €8.04B y/y, op margin 35.2% v 26.1% y/y; guides initial FY21 adj cloud Rev €9.1-9.5B, +13-18% y/y (cc)

- Valeo [FR.FR]: Reports prelim H2 EBITDA margin >13.5%, FCF >€1.3B; Q4 Rev €5.0B, Original Equipment Sales €4.2B

Levels as of 00:20 ET

- Nikkei 225, -0.6%, ASX 200 flat , Hang Seng -0.5%; Shanghai Composite -0.6% ; Kospi -1.9%

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

- EUR 1.2164-1.2139 ; JPY 103.85-103.70 ; AUD 0.7790-0.7754 ;NZD 0.7234-0.7193

- Gold +0.1% at $1,852/oz; Crude Oil -0.2% at $53.46/brl; Copper -0.5% at $3.6528/lb