Equity indices trade mixed amid US holiday

Asia Market Update: Equity indices trade mixed amid US holiday; China cut policy rates [first time since early 2020], little initial impact seen; CN data was mixed; UST FUTs extend declines.

General trend

- USD/JPY and USD/CHF trade modestly higher.

- US equity FUTS reversed gain.

- Nikkei 225 has outperformed, but pared rise [Automakers supported by weaker yen]; Topix Banks index supported by higher UST yields.

- Hang Seng has declined after the flat open [Mainland Property index drops by over 2%]; Macau Casino names rise on regulatory news.

- Shanghai Composite traded slightly higher during the morning session [Property index rose].

- China 2021 GDP 8.1%, slightly higher than expectations.

- S&P ASX 200 pared gain [REIT and Resources indices decline; Consumer stocks supported by Wesfarmers].

- Rio Tinto to issue Q4 production update tomorrow [Jan 18th]; BHP on the 19th.

- BOJ rate decision and economic forecasts are due on Tues (Jan 18th).

Headlines/Economic data

Australia/New Zealand

- ASX 200 opened %.

- WES.AU Guides H1 (A$) Net 1.18-1.24B v 1.4B y/y.

- (NZ) New Zealand PM Ardern: With Omicron variant it is a matter of when, not if; to update on response setting on Jan 20th (Thursday).

Japan

- Nikkei 225 opened +0.7%.

- (JP) Japan Cabinet Office: Expects GDP to recover to pre pandemic levels during FY21 (ends Mar 2022) v during calendar 2021 prior.

- (JP) Expected that Japan will seek stricter coronavirus measures in Tokyo and surrounding areas within the week, after Tokyo hospital bed occupancy hit 19.3% - Press.

- (JP) JAPAN DEC CORE MACHINE ORDERS M/M: 3.4% V 1.3%E; Y/Y: 11.6% V 6.7%E; Japan Govt raises assessment of machine orders.

- (JP) Japan PM Kishida and US President Biden to hold virtual talk Friday on security, covid and climate change - SCMP.

- (JP) Japan Nov Tertiary Industry Index M/M: 0.4% v 1.0%e.

- (JP) Japan Fin Min Suzuki: Will strive to stably issue JGBs through close dialogue with markets on debt management.

Korea

- Kospi opened +0.1%.

- (KR) Japan Coast Guard notes that North Korea may have fired an additional ballistic missile.

- (KR) South Korea reports North Korea fired 2 missiles that may be ballistic.

- (KR) South Korea signs $3.5B deal to sell M-SAM missiles to UAE - Yonhap.

China/Hong Kong

- Hang Seng opened 0%; Shanghai Composite opened 0.0%.

- (CN) CHINA Q4 GDP Q/Q: 1.6% V 1.2%E; Y/Y: 4.0% V 3.3%E, 2021 GDP Y/Y: 8.1% v 8.0%e.

- (CN) CHINA DEC INDUSTRIAL PRODUCTION Y/Y: 4.3% V 3.7%E; 2021 Y/Y: 9.6% V 9.7%E.

- (CN) CHINA DEC RETAIL SALES Y/Y: 1.7% V 3.8%E; 2021 Y/Y: 12.5% V 12.7%E.

- (CN) CHINA PBOC CONDUCTS CNY700B V CNY500B MATURING IN 1-YEAR MEDIUM-TERM LENDING FACILITY (MLF) AT 2.85% V 2.95% PRIOR (FIRST RATE CHANGE IN 21 MONTHS); Note, the PBOC last cut the MLF rate in March 2020 by 20bps.

- (CN) China PBOC Open Market Operation (OMO): Sells CNY100B in 7-day reverse repos v CNY10B prior; Net inject CNY90B v CNY0B prior; cuts 7-day rate 10bps from 2.10% to 2.20%.

- (CN) China PBOC sets Yuan reference rate: 6.3599 v 6.3677 prior.

- (CN) China banking and insurance regulator (CBIRC) will conduct the first specialized nationwide inspection this year into connected transactions involving insurance funds.

- (HK) Hong Kong Monetary Authority (HKMA) issues proposal that will abolish the role of lawyers as middlemen in residential mortgage transactions – SCMP.

- (CN) China Dec Surveyed Jobless Rate: 5.1% v 5.0%e.

- (CN) CHINA DEC FIXED URBAN ASSETS YTD Y/Y: 4.9% V 4.8%E.

- (CN) CHINA DEC PROPERTY INVESTMENT YTD Y/Y: 4.4% V 5.2%E.

- (CN) CHINA DEC NEW HOME PRICES M/M: -0.3% V -0.3% PRIOR; Y/Y: 2.6% V 3.0% PRIOR (Saturday).

- (CN) A domestically transmitted case of Omicron variant was detected in Beijing today, just 3 weeks ahead of the Winter Olympics being held there – press.

- (CN) Macau Government confirms gaming law amendments; Confirms Macau limits up to six concessions with an operating period up to a maximum of 10 year with potential 3 year extension (Friday).

Other

- (TO) Eruption of the Hunga-Tonga-Hunga-Ha’apai volcano in Tonga on Saturday saw tsunami waves across Tonga, and rising water levels were reported on the coastline of Peru and the Pacific Coast in the United States.

- (SG) SINGAPORE DEC NON-OIL DOMESTIC EXPORTS M/M: 3.7% V 0.8%E; Y/Y: 18.4% V 12.2%E, Electronic Exports Y/Y: 13.6% v 29.2% prior.

North America

- WMT Filings show sought several new trademarks in December related to cryptocurrency and virtual goods – press.

- TGT CEO Cornell: Expect US consumers to drive less and consolidate their shopping into few trips/stops as they adjust to inflation; also expect them to eat more at home and purchase more generic brands – press.

- TSLA CEO Musk tweets: To start rolling out the Full self driving (FSD) beta in Canada cautiously in next 2-4 weeks.

Europe

- GSK.UK Reportedly Unilever made a bid of about £50B ($68.5B) for Glaxo's consumer goods business - Sunday Times.

- GSK.UK Follow Up: Co. and Pfizer said to seek £60.0B for consumer health unit, Unilever in talks with banks about additional funding for increased offer - FT.

- LSEG.UK Made proposal to Financial Conduct Authority and UK Treasury to allow a hybrid model in which private companies periodically access public markets in days long trading windows - US press.

- CSGN.CH Appoints Dir Axel Lehmann as Chairman replacing António Horta-Osório who resigned following investigation by the board.

- (UK) Jan Rightmove House Prices M/M: +0.3% v -0.7% prior; Y/Y: 7.6% v 6.3% prior.

Levels as of 00:15ET

- Hang Seng -0.9%; Shanghai Composite +0.6%; Kospi -1.4%; Nikkei225 +0.8%; ASX 200 +0.3%.

- Equity Futures: S&P500 -0.2%; Nasdaq100 -0.4%, Dax -0.3%; FTSE100 0.0%.

- EUR 1.1422-1.1400; JPY 114.50-114.12; AUD 0.7224-0.7196; NZD 0.6817-0.6787.

- Commodity Futures: Gold +0.1% at $1,818/oz; Crude Oil +0.3% at $83.53/brl; Copper -0.2% at $4.42/lb.