Equity markets trade mixed after similar session on Wall Street

Asia Market Update: Equity markets trade mixed after similar session on Wall St; 2-year UST yield rises; Fed’s Powell to testify later today; China inflation data due on Wed.

General trend

- US equity FUTs have traded generally flat.

- Nikkei 225 has dropped by >1% following holiday [Index heavyweights decline (Fast Retailing, Softbank Group)]; Topix Retailing index drops amid earnings reports.

- Japan corporate earnings due today include Kewpie, Yaskawa Electric, Izumi, Aeon Mall, COSMOS Pharmaceuticals, Disco.

- Hang Seng has reversed the opening decline.

- Shanghai Composite ended morning trading slightly lower.

- Property companies outperform in Shanghai and Hong Kong; China Housing Ministry official commented on plan to build additional homes; Evergrande extended bondholders meeting voting period to Jan 13th (Thurs).

- S&P ASX 200 has remained lower [Financials drop].

- Companies to report during the NY morning include Albertsons, SYNNEX Corp.

Headlines/Economic data

Australia/New Zealand

- ASX 200 opened +0.0%.

- FCG.NZ Cuts 2021/22 New Zealand milk collections 1.5B kgMS (prior 1.53B).

- (AU) Australia Nov Retail Sales M/M: 7.3% v 3.6%e.

- (NZ) New Zealand LGFA has raised the borrowing requirements for 2021-2022 by NZ$200M to NZ$3.1B.

Japan

- Nikkei 225 opened -0.3%.

- 8411.JP To acquire US based Capstone Partners, a middle market placement agent focused on the private equity industry; no terms disclosed.

- (JP) Japan PM Kishida: Maintaining border restrictions through Feb; North Korea fired what may be a ballistic missile.

- 8411.JP Reported to have issues with its online banking, including corporate customers - Japan press.

- (JP) Japan Fin Min Suzuki: Banks are a key social infrastructure; Essential that Mizuho system failures do not happen again.

- (JP) Bank of Japan (BOJ) Quarterly Public Opinion of Household Sentiment: 78.8% of households expect prices in Japan to increase in 1 year vs 68.2% q/q (expectation is highest since Sept 2019); 80.8% of households expect price increases in 5 years v 78.1% q/q (highest expectation since Dec 2019).

Korea

- Kospi opened +0.1%.

- (KR) Japan Coast Guard and South Korea report North Korea fired ballistic missile, which landed in East Sea (2nd in less than a week).

- (KR) South Korea Nov Current Account (BOP): $7.2B v $5.6B prior (19th consecutive surplus); Balance of Goods (BOP): $6.0B v $7.0B prior.

- (KR) South Korea Jan 1-10th Exports Y/Y: 24.4% v 20.4% prior; Imports Y/Y: 57.1% v 42.3% prior; Chip exports Y/Y: 23.3% v +26.5% prior.

China/Hong Kong

- Hang Seng opened -0.3%; Shanghai Composite opened -0.1%.

- (CN) China Housing Ministry official Pan: China to build ~6.5M new low cost homes by the end of 2025.

- (HK) Hong Kong Chief Exec Lam: Plans new round of virus stimulus; Cancels in school kindergarten and primary school classes conducted in person from Fri through Lunar New Year, will also announce funding details and new measures Friday.

- China PBOC sets Yuan reference rate: 6.3684 v 6.3653 prior.

- (CN) China PBOC Open Market Operation (OMO): Sells CNY10B in 7-day reverse repos v CNY10B prior; Net CNY0B v inject CNY10B prior.

- 813.HK As of today, no outstanding asset backed securities due or payable; Considering selling certain properties.

- (CN) China Tianjin City (Hebei province) has imposed a partial lockdown, Anyang (Henan province) has also imposed a lockdown.

- (CN) China Zhengzhou (Henan province capital) has adjusted public transportation accommodations and shut down areas.

- (CN) China 2022 special local government bond issuance quota seen flat y/y (implies CNY3.65T) - US financial press.

Other

- (SG) Singapore expected to raise its Goods and Services Tax (GST) this year, this could strengthen the case for the central bank (MAS) to tighten policy – press.

- ST.SG Said to be looking at options for its Australia fiber assets, including sale of stake or partnership - press.

North America

- (US) FED CHAIR POWELL: FED WILL STOP HIGHER INFLATION FROM GETTING ENTRENCHED - PRE-RELEASED CONGRESSIONAL TESTIMONY.

- (US) Chicago US Fed has listed Lisa Cook as a director for the regional bank through 2024.

- (US) Chicago teachers union accepts deal to reopen schools for in person learning starting Jan 12th - local press.

- (US) CDC said to consider recommending 'better masks' for use against omicron coronavirus variant; To say those who can consistently wear N95 or KN95 masks should do so.

- (CN) China Aviation Regulator has suspended flights for United and Delta due to coronavirus, effective from Jan 17th.

Europe

- (UK) Dec BRC Sales LFL Y/Y: 0.6% v 1.8% prior.

Levels as of 00:15ET

- Hang Seng +0.1%; Shanghai Composite -0.4%; Kospi -0.1%; Nikkei225 -0.9%; ASX 200 -0.8%.

- Equity Futures: S&P500 -0.0%; Nasdaq100 -0.0%, Dax +0.1%; FTSE100 +0.3%.

- EUR 1.1344-1.1323; JPY 115.39-115.18; AUD 0.7196-0.7168; NZD 0.6783-0.6736.

- Commodity Futures: Gold +0.4% at $1,805/oz; Crude Oil +0.7% at $78.75/brl; Copper +0.1% at $4.38/lb.