Upcoming FOMC minutes in focus

Asia Market Update: Trump trades barbs with N. Korea, dollar slightly stronger; Upcoming FOMC minutes in focus

 

Headlines/Economic Data

General Trend:

-Asian currencies continue to exhibit strength in the new year. Thai Baht (THB) hits strongest level since April 2015; PBoC set yuan (CNY) at strongest since May 2016; Taiwan Dollar (TWD) continues to trade at over 4-year highs

Japan

-Nikkei 225 closed for holiday

Looking ahead: Equity markets in Japan resume trading on Thursday, following 3-day holiday; Japan Dec final manufacturing PMI to be released

Korea

-Kospi opened +0.2%

-Semiconductors track earlier gains in the US: Samsung Electronics +1.5%, Hynix +1.4%

-Posco Steel +5%, Hyundai Steel +2.6% (US Dow Jones Iron & Steel index rose 4.6% on Tuesday; positive broker commentary)

-073240.KR (Kumho Tire) +11%: KDB set up task forces to deal with Kumho Tire restructuring and M&A

-LG Display (034220.KR) +3%: To begin supplying OLED panels for over 15M new iPhone units which are expected to be unveiled in H2, says a press report.

-009540.KR Hyundai Heavy +9.5% (Issued FY18 sales guidance)**Reminder: On Dec 27, 2017 the company’s share price declined by over 28%, as it announced a plan to raise KRW1.29T in capital.

-(KR) Bank of Korea (BOK) Gov Lee: Reiterates stance of closely monitoring FX movements

- (KR) Korean press comments on rising number of mortgages in South Korea despite govt's measures to slow the housing market

(KR) Bank of Korea (BoK) sells KRW2.4T in 2-year monetary stabilization bonds: yield 2.06%

-(KR) Moody's: domestic and global credit impact of Korea conflict would depend on duration and severity

-(KR) North Korea Official: Kim Jong Un has given order to open boarder hotline between the Koreas at 06:30GMT to discuss inter-Korean dialogue

-(KR) South Korea Q4 Foreign Direct Investment (FDI) y/y: +49.8% v -9.0% prior; 2017 FDI record high

China/Hong Kong

-Hang Seng opened +0.5%, Shanghai Composite flat

-Hang Seng Services Index +1.7% (strength in airlines), Consumer Goods +1.5% (automakers gain), Materials +1.3%, Information Technology +1.2%; Telecom -1% (China Mobile -1.4%), Utilities -0.1%

-(CN) China researcher suggests China should allow yuan to fall this year; sees 2018 GDP at 6.5% -21st Herald

-(CN) PBOC may resume open market operations (OMO) in H2 of Jan - Chinese press

-(CN) China Securities Times Op Ed: PBOC should stabilize yuan fx rate

-(CN) Survey of analysts expects China to raise money market rates 3 times - financial press

-(CN) China PBoC: Skips OMO for 8th straight session; Net drains CNY90B v CNY290B prior

-USD/CNY (CN) China PBoC sets yuan reference rate at 6.4920 v 6.5079 prior (strongest setting since May 2016)

-(HK) Overnight HK$ HIBOR -66bps (most since Nov 1st); 1-week HK$ HIBOR -47bps (most since Oct 2008); 1-month HK$ HIBOR -7bps (most since Jan 2009)

Looking ahead: China Dec Caixin Services PMI to be released on Thursday

Australia/New Zealand

-ASX 200 opened +0.2%; closed: +0.2%

-ASX 200 Resources Index +1.4%, Energy +0.6%;Financials -0.2, Consumer Discretionary -0.5%

-MWY.AU Guides FY18 H1 earnings to be lower due to delayed export shipments; -3%

-YOW.AU Cuts FY18 Rev to +17% y/y (prior 55%); Names Mark Schuessler new CEO; -33%

Other Asia

-(PH) Philippines Central Bank (BSP): May tweak monetary stance if there is a 2nd CPI effect; To restore 28-day term deposits in due time

North America

-US equities ended higher: Dow +0.4%, S&P500 +0.8%, Nasdaq +1.5%, Russell 2000 +0.9%

S&P500 Energy Sector +1.6%, Consumer Discretionary +1.5%

-SEMI: Sees 2018 global fab equipment spending $63B, +11% y/y; 2017 global fab equipment spending $57B, +41% y/y (record high)

-(US) Sen Hatch (R-UT): plans to retire from the Senate at the end of term; Hatch was first elected to the Senate from Utah in 1976

Looking ahead: US Dec ISM manufacturing PMI to be released on Wednesday, along with Dec FOMC Minutes and Weekly API Crude Oil Inventories.

Europe

-(UK) UK reportedly considering joining the Trans Pacific Partnership (TPP) following Brexit - FT

-(EU) ECB's Nowotny (Austria): sees a risk of a European stock market bubble - press interview

 

Levels as of 01:00ET

- Nikkei225 closed, Hang Seng +0.0%; Shanghai Composite +0.5%; ASX200 +0.2%, Kospi +0.3%

- Equity Futures: S&P500 +0.1%; Nasdaq100 +0.1%, Dax +0.2%; FTSE100 +0.0%

- EUR 1.2066-1.2042; JPY 112.39-112.17; AUD 0.7837-0.7806;NZD 0.7109-0.7073

- Feb Gold +0.0% at $1,316/oz; Feb Crude Oil +0.0% at $60.38/brl; Mar Copper -0.5% at $3.26/lb

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