Trump reiterates demand for border wall as partial gov’t shutdown enters 19th day

Asia Market Update: Asian equity markets rise, US/China trade talks extended; Trump reiterates demand for border wall as partial gov’t shutdown enters 19th day

 

General Trend:

- Automakers drive gains in Shanghai amid renewed stimulus talk, Great Wall Motor up 10%; appliances makers also rise on the news

- US/China Trade delegation member from the US: "Its been a good one for us"

- China comments: US/China trade agreement must involve "give and take" - Chinese State Media

- Insurers in Hong Kong supported by broker commentary

- Xiaomi announces lockup agreement with controlling shareholders, follows recent share price declines

- Iron/Steel companies and Softbank rise in Japan

- Fast Retailing under performs ahead of Thursday’s earnings report

- Energy shares rise in Australia

- WTI Crude trades above $50/bbl (first time since Dec)

- USD trades generally weaker amid Trump comments, Fed in focus

- US President Trump does not comment on emergency powers in speech

- Trump expected to meet Senate Republicans on Wed, Fed minutes also to be released

 

Headlines/Economic Data

Japan

- Nikkei 225 opened +0.8%

- 5401.JP South Korea plaintiffs in forced labor case related to World War 2 are seeking to seize some of the company's assets in South Korea - Local Press

- (JP) JAPAN NOV LABOR CASH EARNINGS Y/Y: 2.0% V 1.2% PRIOR; REAL CASH EARNINGS Y/Y: 1.1% V 0.4%E

- 6758.JP Looking at alternative plans for some production in China if tariffs are going to increase - Nikkei

- (JP) Bank of Japan (BoJ) Survey: Japan households see 3% inflation in 1 year v 3% prior; See 2% inflation in 5 years v 2% prior

Korea

- Kospi opened +0.4%

- (KR) South Korea Dec Unemployment Rate: 3.8% v 3.9%e; Jobs added: 34.0K v 165.0K prior

- 005380.KR To recall 79K diesel vehicles for faulty emission related parts

- 017670.KR CEO: Will set up intermediate holding company within this year

- (KR) South Korea analysts note that North Korea's threatened "new way" to deal with US in its New Years address could be China - Yonhap

China/Hong Kong

- Hang Seng opened +1.4%, Shanghai Composite +0.4%

- (US) China/US trade talks have reportedly narrowed differences on trade, made progress on issues including purchasing more US trade goods; talks have been extended by 1 day into tomorrow – press

- (CN) Certain cities in China said to be tightening housing fund policies - Chinese press

- (CN) China NDRC official reiterates government to introduce policies to support domestic consumption, policies to focus on areas including autos and home appliances - Chinese state media

- (CN) China PBoC Open Market Operation (OMO): Skips OMO operations for the third consecutive day; Net: CNY40B drain v CNY20B drain prior

- (CN) China may set higher budget deficit to GDP target for 2019, speculated at 2.8% (vs 2.6% expected for 2018) - US financial press

- (CN) China PBoC sets yuan reference rate: 6.8526 v 6.8402 prior

Australia/New Zealand

- ASX 200 opened +0.4%

- (AU) AUSTRALIA NOV BUILDING APPROVALS M/M: -9.1% V -0.3%E; Y/Y: -32.8% V -24.8%E

- (AU) Australia Nov Job Vacancies: 1.3% v 1.1% prior

- RMS.AU Reports Q2 production 52.6K oz v 48-52K guided

North America

- (US) FDA said to consider slowing down drug approvals as a result of partial government shutdown - US financial press

- (US) Weekly API Oil Inventories: Crude: -6.1M v -4.5M prior

- NBR To cut dividend 83% to $0.01/shr in Q2'19 (indicated yield 1.52%); Guides FY19 capex $400M

- SWKS Cuts Q1 $1.81-1.84 v $1.91e (prior $1.91), Rev $970M v $1.01Be (prior $1.0-1.02B) due to unit weakness across our largest smartphone customers

-(US) President Trump: There is a growing security crisis at the US southern border, all Americans are hurt by uncontrolled illegal immigration, strains resources, impacts African Americans and Hispanics the most; border wall will very quickly pay for itself. Govt remains shut down only because Democrats will not fund border security, situation could be solved in 45 minute meeting, have invited parties to White House tomorrow

Europe

- (UK) UK govt spokesperson: the defeat on the 'no-deal' Brexit amendment vote today does not change the fact that the UK will leave the EU on March 29

- (IE) Ireland Foreign Min Coveney: PM May has made it clear she is not looking for an extension to Article 50; want to avoid a no-deal Brexit

- World Bank cuts 2019 Europe growth forecast to 1.6%, -0.1ppts from prior forecast - press

- (UA) UAE Energy Min/OPEC President Suhail Al Mazroui: OPEC+ is eager to correct oil market; do not see major changes to oil market in 2019 - press

 

Levels as of 12:50ET

- Hang Seng +2.8%; Shanghai Composite +1.6%; Kospi +2.0%; Nikkei225 +1.1%; ASX 200 +1.0%

- Equity Futures: S&P500 +0.4%; Nasdaq100 +0.6%, Dax +0.1.0%; FTSE100 +0.8%

- EUR 1.1435-1.1466; JPY 108.67-109.00 ; AUD 0.7135-0.7171; NZD 0.6722-0.6758

- Feb Gold -0.2% at $1,283/oz; Feb Crude Oil +1.6% at $50.58/brl; Mar Copper +0.8% at $2.67/lb