Equity markets in HK and Shanghai rise amid multiple holidays in Asia

Asia Market Update: Equity markets in HK and Shanghai rise amid multiple holidays in Asia; Little initial impact seen from weaker China PMIs; Modest USD volatility seen into year-end.

General Trend

- Shanghai Composite traded broadly higher during the morning session; Consumer Discretionary, Financial and IT indices were the leading gainers

- Hang Seng Finance index rises, TECH index rises over 1.5%; Geely gains over 8% amid comments from Chairman; Chipmaker SMIC rose over 9% [extended gain from prior session]

- Consumer and Financial firms were among the decliners in Australia

- Germany is closed today, UK markets to close early

- All Asian markets will be closed on Fri.

Headlines/Economic Data

Australia/New Zealand

- ASX 200 opened -0.0%

- (AU) South Australia implements hard border with New South Wales due to COVID outbreak in Sydney

Japan

- Nikkei 225 closed until Jan 4th

- KATERRA.IPO Softbank provides $200M bailout to help company avoid bankruptcy - press

- (JP) Japan Econ Min Nishimura: Considering state of emergency due to COVID rate

Korea

- Kospi closed until Jan 4th

- (KR) Bank of Korea (BOK) Gov Lee: Reiterates to maintain its accommodative policy until stable recovery is expected; to consider jobs as major factor in policy operation - New years address

- (KR) South Korea office of the President: Several of President Moon's top aides tendered their resignations Wednesday in order to alleviate the political burden of the president facing criticisms on several key domestic fronts

- (KR) SOUTH KOREA DEC CPI M/M: 0.2% V +0.1%E; Y/Y: 0.5% V +0.5%E

- (KR) South Korea President Moon said to be planning to replace Fin Min and Industry Mins - Korean press

- (KR) North Korean delegates participating in an upcoming congress of the ruling Workers' Party have gathered in Pyongyang and were awarded certificates (would be the first Part Congress in 4-yrs) - local press

China/Hong Kong

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

- (CN) CHINA DEC MANUFACTURING PMI (GOVT OFFICIAL): 51.9 V 52.0E; Non-manufacturing PMI: 55.7 v 56.3e

- (CN) China PBOC Open Market Operation (OMO): Injects CNY90B in 7-day reverse repos v CNY40B in 7-day reverse repos prior; Net Injection: CNY80B v CNY30B prior

- (CN) China PBOC to place non-bank payment institutions under the scope of anti-money laundering and anti-terrorism financing supervision - financial press

- 175.HK Geely Holding Chairman: Geely Auto to resume merger talks with Volvo Cars after Geely Auto starts board listing

- China PBOC sets Yuan reference rate: 6.5249 v 6.5325 prior

- USD/CNH Declines below 6.50, Offshore yuan (CNH) trades at strongest level since 2018

- 1099.HK (CN) China gives conditional approval to China National Biotech coronavirus vaccine for general use (as expected)

Other

- (SG) Singapore Ministry of Science and Tech Official Heng Swee Keat: Outlook for Singapore remains highly uncertain and will remain the case for some time; Will have traditional budget year if recovery is on track, if situation worsens we are ready to respond

- TSM TSMC and Samsung Electronics have both seen certain types of 'bottlenecks' in the development of 3nm process technologies, cites industry sources - Digitimes

North America

- (US) Sen Maj Leader McConnell (R-KY): Senate will not be bullied into more aid checks; Senate will not split apart bill sought by Pres Trump which includes $2,000 checks, revokes Sec 230, and institutes an electoral fraud commission

Europe

- (UK) Brexit Trade deal has been approved by UK House of Lords, now has full parliament approval (as expected)

- (EU) USTR: US Modifies certain tariffs on EU in regard to large aircraft dispute; To extend tariff to aircraft parts from France and Germany; to increase tariffs on certain EU products (includes aircraft-related parts and wines), tariffs still valued ~$7.5B/yr

- (DE) German Chancellor Merkel: Need to remain disciplined in the fight against the coronavirus, perseverance will be needed during a harsh winter as vaccination campaign ramps up - her last annual Chancellery speech before stepping down

- (DE) ECB's Weidmann (Germany): Do not expect the European Central Bank to keep interest rates low forever; will not take into consideration sovereign debt servicing costs if price stability mandates higher interest rates - German press

Levels as of 12:15ET

- Hang Seng +0.5% (closed); Shanghai Composite +0.8%; Kospi closed; Nikkei225 closed; ASX 200 -1.4% (closed)

- Equity Futures: S&P500 -0.0%; Nasdaq100 +0.0%, Dax closed; FTSE100 -0.7%

- EUR 1.2309-1.2285; JPY 103.25-103.08; AUD 0.7709-0.7678; NZD 0.7235-0.7201

- Commodity Futures: Gold -0.1% at $1,892/oz; Crude Oil -0.2% at $48.32/brl; Copper -0.5% at $3.53/lb

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