Equities trade mixed in first session of 2020

Asia Market Update: Equities trade mixed in first session of 2020, equity futures rise; Shanghai Composite and Hang Seng outperform on PBOC RRR cut, Trump said he will sign Phase 1 deal with China on Jan 15th

General Trend:

- Small-cap, property and financial firms gain in Shanghai on PBOC RRR cut announcement

- Large steel maker Baoshan rises as China’s largest steelmaking city issued pollution alert

- Chinese liquor giant Kweichow Moutai drops over 3% on weaker than expected FY earnings, sees slower revenue growth in 2020

- Financials and property firms in Hong Kong track the gains being seen in Shanghai

- HK gaming stocks outperform on better than expected Dec gaming revenues

- Gainers in Australia include Telecom Services and Consumer companies

- South Korea’s Kospi underperforms; Decliners include financials and automakers, along with Samsung Electronics

- Japanese markets are closed today and tomorrow

Headlines/Economic Data

Australia/New Zealand

-ASX 200 opened 0.0%

-(AU) Australia Dec Final CBA PMI Manufacturing: 49.2 v 49.4 prelim (lowest reading since series started)

Japan

-Nikkei 225 closed

Korea

-Kospi opens +0.2%

- (KR) South Korea Dec Trade Balance $2.0B v $3.5Be; Exports Y/Y: -5.2% v -8.6%e (13th consecutive decline, smallest decline since April); Imports Y/Y: -0.7% v -6.9%e; Semiconductor exports Y/Y: -17.7% v -32.1% prior; Exports to China Y/Y: +3.3% v -16.9% prior (first rise in over 1 year)

- 005380.KR Hyundai Motor Group said to plan to increase annual investment to KRW20T - US financial press

-(KR) North Korea Leader Kim: US will 'suffer helplessly' if it continues to delay; World will witness new strategic weapon - South Korean press (yesterday)

- (KR) South Korea Dec PMI Manufacturing: 50.1 v 49.4 prior (highest since Apr 2019)

- (KR) Bank of Korea (BOK) Gov Lee: May not replace all 4 board members when their term ends at end of April; CPI and GDP to improve in 2020, but don't expect a drastic recovery; still have room with interest rates

China/Hong Kong

- Hang Seng opened +0.2%; Shanghai Composite opened +0.5%

- (CN) China PBOC cuts Reserve Requirement Ratio (RRR) by 50bps, effective Jan 6 2020; RRR cut aimed at supporting economy; The RRR cut is said to release ~CNY800B in liquidity

- (CN) China PBOC: Monetary policy should be flexible to maintain liquidity; will comprehensively use multiple monetary tools; Will keep yuan exchange rate balanced and stable (yesterday)

- (CN) CHINA DEC CAIXIN PMI MANUFACTURING: 51.5 V 51.6E (5th consecutive month of expansion)

- (HK) Macau Dec Gaming Rev (MOP) 22.8B v 22.9B prior; Y/Y: -13.7% v -8.5% prior; 2019 Macau Casino Rev (MOP) 292.5B, -3.4% y/y

- 600519.CN Reports Prelim FY19 (CNY) Net ~40.5B, +15% y/y; Rev 88.5B v 73.6B y/y

- (CN) China PBOC sets Yuan Reference Rate: 6.9614 v 6.9762 prior (strongest fix since Aug 2019)

- (CN) China PBoC Open Market Operation (OMO): Skips reverse repos for the 8th consecutive session; Net drain CNY400B v drain CNY0B prior

-(CN) Ganzhou (China) has launched its rare earths exchange (2nd rare earth exchange in China) - Chinese press

Other Asia

- (SG) SINGAPORE Q4 ADVANCED GDP Q/Q: 0.1% V 0.4%E; Y/Y: 0.8% V 0.8%E; 2019 GDP y/y: 0.7% v 0.6%e

North America

- (US) More than 250 drugs in the US saw their prices rise, effective today; median increase is 5%, with all increases below 10%

- (US) US Treasury Sec Mnuchin is expected to lead the US' Davos delegation; President Trump will also attend - US financial press

- (US) President Trump: China deal likely to be signed January 15th, we will be starting phase 2 talks soon and they could complete negotiations

Europe

- AIR.FR Reportedly exceeds own goal with 863 jet deliveries in 2019, +8% y/y – press

- (AT) As expected Austria conservative leader Sebastian Kurz reached deal with Greens on coalition Govt ; Kurz will be chancellor and Green's Kogler will become Austria’s vice-chancellor

Levels as of 12:15ET

- Hang Seng +0.8%; Shanghai Composite +1.2%; Kospi -0.9%; Nikkei225 closed; ASX 200 +0.2%

- Equity Futures: S&P500 +0.3%; Nasdaq100 +0.4%, Dax +0.7%; FTSE100 +0.3%

- EUR 1.1225-1.1200; JPY 108.77-108.61; AUD 0.7020-0.6999; NZD 0.6739-0.6717

- Commodity Futures: Gold -0.1% at $1,522/oz; Crude Oil +0.3% at $61.22/brl; Copper +0.8% at $2.82/lb