Trump continues to comment on tariffs, USD gains

Asia market update: Trump continues to comment on tariffs, USD gains; Quiet session for Nasdaq FUTs after prior rout; CN Lunar New Year holiday in focus; Big Aussie CPI data due on Wed.

General trend

- Trump commented on tariffs and specific sectors [including semis, pharma, metals].

- Trump also spoke about DeepSeek AI [Trump: The release of DeepSeek AI should be a wakeup call.; It is 'good' that companies in China have come up with a faster method of AI.]

- Will Trump take action against DeepSeek?

- Various companies vouch for DeepSeek [OpenAI, Nvidia].

- Nvidia rose by 1.5% in afterhours trading after earlier rout; Supplier Advantest extended drop in Japan [down >10%]; Tokyo Electron also declined.

- Fanuc rises after reporting earnings.

- How will China respond to Trump’s comments on TikTok? [US Pres Trump: We'll have many people bidding on TikTok; Doesn't want China involved in TikTok].

- BOJ Himino to speak on Jan 30th [Thurs].

- New Zealand RBNZ Chief Economist Conway to speak on Jan 29th - Press.

- US Fed decision on Jan 29th (Wed).

- Corporate earnings still in focus.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.1% at 8,416.

- Australia Dec NAB Business Confidence: -2 v -3 prior.

- Australia sells A$300M v A$300M indicated in 4.75% Jun 2054 Bonds; Avg Yield: 4.9405%; bid-to-cover: 3.65x.

- Nuix [NXL.AU]: Guides H1 Underlying EBITDA (A$) 26-28M, Rev 104-106M; Affirms FY25 guidance.

- New Zealand Treasury: Notes upside risks to forecast for household consumption - Fortnightly Economic Update.

- New Zealand Dec Filled Jobs M/M: 0.1% v 0.3% prior.

China/Hong Kong

- Hang Seng opens +0.7% at 20,337 [half trading day] (**Note: HK markets are closed on Jan 29th-31st for the Chinese Lunar New Year holiday.).

- Shanghai Composite closed for Lunar New Year holiday [**Reminder: China expanded market closures for Lunar New Year Holiday from 6 to 8 days [Jan 28th through Feb 4th], effective from Jan 28th 2025 - press].

- DeepSeek: Restricts registration to Chinese mobile phone numbers amid reports of service disruptions due to a sudden rush to download the chatbot - press.

- China President Xi: Reiterates Govt will expand high-level opening up.

- China South City [1668.HK]: Notes winding-up petition filed by Citicorp International related to non-payment of $306M.

- China Vanke [2202.HK]: Reports prelim FY24 (CNY) Net -45.0B v -16.9Be (vs. +12.2B y/y); CEO Zhu Jiusheng to resign [no replacement named]; Chairman to also resign.

Japan

- Nikkei 225 opens -0.4% at 39,400.

- Japan Dec PPI Services Y/Y: 2.9% v 3.0% prior (3.2%e).

- Japan govt nominates Waseda Univ Professor Junko Koeda to replace Seiji Adachi on BOJ board; The selection would place two women in Japan's parliament for the first time.

- Bank of Japan (BOJ) announcement related to outright bond buying operations: 1-3 Years; 3-5 Years, 10-25 Years: Unchanged.

- Japan Economic Revitalization Min Akazawa: To closely watch impact of [recent] rate hike on the economy.

- Japan Opposition DPP Party reiterates to block budget if PM Ishiba ‘stands ground’; cites the DPP’s Hamaguchi – US financial press.

- Japan's FSA to survey bank laundering measures - Press.

Korea

- Kospi closed for holiday.

Other Asia

- India Central Bank (RBI): Announces measures to manage liquidity conditions.

North America

- US Pres Trump: Wants tariffs 'much bigger than 2.5%' [responds to earlier press report].

- US Treasury Sec Bessent is said to propose universal tariff plan that would raise tariffs by 2.5% each month – FT [***Note: Jan 13th, *(US) Reportedly Pres-elect Trump's team studying month by month tariff hikes of 2-5%; This proposal is in its early stages and has Not been presented to Pres-elect Trump; Supporters include Trump advisers Treasury Sec nominee Bessent, Haslett and Miran – press].

- US Pres Trump said: we will put tariffs 'on people who mean us harm'; To soon place tariffs on foreign computer chips; To soon put tariffs on semiconductors; To look at tariffs for pharmaceutical and steel companies; Will be placing tariffs on steel, aluminum and copper.; Will also look at other industries for tariffs.; The only way to get out of tariffs is building plants in the US; It is 'good' that companies in China have come up with a faster method of AI.

- US Senate confirms Bessent as Treasury Secretary (as expected).

- OpenAI: CEO Altman: DeepSeek R1 is an 'impressive' model; the model is impressive for what it can deliver for the price; planning some new releases.

- Nvidia [NVDA]: DeepSeek is "excellent AI advancement".

- Microsoft [MSFT]: US President Trump confirms the co. is in talks regarding TikTok - US financial press.

- Amazon [AMZN]: Big’ AWS customers [including Toyota] said to be ‘hounding’ Amazon for access to DeepSeek AI models – Business Insider.

- Amazon [AMZN]: Whole Foods workers in Philadelphia establish the grocer's first union in decades - WSJ.

- California Public Utilities Commission (CPUC) took action today to enhance the safety of battery energy storage facilities, and their related emergency response plans, by issuing a proposal that, if approved, would, among other things: 1) implement Senate Bill (SB) 1383 to establish new standards for the maintenance and operation of battery energy storage facilities.

- (US) Dec new Home Sales: 698K V 672KE.

- (US) Treasury $70B 5-year note auction draws 4.330% V 4.478% prior, BTC 2.40 V 2.40 prior and 2.36 over the last 12.

- (US) Treasury $69B 2-year note auction draws 4.211% V 4.335% prior; bid-to-cover ratio: 2.66 V 2.73 prior and 2.63 over the last 12.

Europe

- (UK) Jan BRC Shop Price Index Y/Y: -0.7% v -1.0% prior.

- SAP [SAP.DE]: Reports Q4 Net [cont ops] €1.62B v €1.30B y/y, Op [Non-IFRS] €2.44B v €1.97B y/y, Rev €9.38B v €9.1Be; Raises FY25 Op €10.3-10.6B (prior: €10.2B).

Levels as of 00:20 ET

- Nikkei 225, -1.5%, ASX 200 -0.1% , Hang Seng +0.1%; Shanghai Composite closed ; Kospi closed.

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

- EUR 1.0494-1.0424 ; JPY 155.94-154.46 ; AUD0.6296-0.6246 ;NZD 0.5697-0.5652.

- Gold +0.3% at $2,774/oz; Crude Oil +0.4% at $73.46/brl; Copper +0.6% at $4.2665/lb.