Asian Market Update: Big equity losses seen in Asia; Australian Market Falls More Than 3% Amid Rising Inflation Data; SGD increases after MAS surprise; Fed meeting also in focus [Jan 25-26th].
General trend
– Central banks targeted (MAS, RBA, Fed).
– AU’s Q4 core CPI rose above the midpoint of the RBA’s inflation target range [2-3%]; AUD reduced its gain, Australian yield curve flattened; Analysts continue to push the RBA’s rate hike calls.
– The next RBA meeting is February 1 (Tuesday); Will the RBA see the CPI rise as sustainable? [quarterly wage price index is due Feb 23rd].
– AU business confidence weighed down by omicron.
– NZ Q4 CPI data due Thursday (January 27).
– The JPY/KRW increases by 0.5% [South Korea FX reforms in focus; North Korea and equity declines also focal points].
– The 2-year UST yield rallied above 1.00% ahead of the Australian CPI data; The decision of the American Fed remains in the center of the concerns.
– Russian CDS expands amid focus on Ukraine and sanctions; Crude oil FUTs are increasing.
– Lowering of the Shanghai Nickel trade limit (-8%).
– Fall in US equities FUTS >1.2%.
– S&P ASX 200 REITs index falls on CPI data [Energy and Resources indices also lag]; Fortescue released a production update; Australian markets are closed on Wednesdays.
– The Hang Seng TECH index drops >2%.
– Shanghai Composite down >1% [Telecom Services, Industrial, IT and Property indices lag].
– CN/HK real estate sector mergers and acquisitions continue.
– The Softbank group falls > 4%.
– Hyundai Motor’s profits in a nutshell.
– Companies due to report during the New York morning include Archer-Daniels-Midland, American Express, GE, JNJ, Lockheed Martin, 3M, PACCAR, Polaris, Raytheon, Verizon, Xerox.
Securities/Economic data
Australia/New Zealand
– The ASX 200 opened -0.2%.
– (AU) AUSTRALIA Q4 CPI Q/Q: 1.3% V 1.0%E; Y/Y: 3.5%V 3.2%E; CPI-adjusted average (base) Q/Q: 1.0% vs. 0.7%e; Y/Y: 2.6% versus 2.3%e [annualized pace is the highest since 2014].
– FMG.AU Reports Second Quarter Iron Ore Shipments of 47.5 Mt vs. 46.4 Mt Year-on-Year; Ore mined 57.2 Mt versus 50.0 Mt year-on-year.
– FCG.NZ Fonterra raises outlook for farm gate milk prices to NZ$8.90-9.50 (previously: NZ$8.40-9.00); Confirm FY22 EPS 0.25-0.35.
– ILU.AU Reports Total Q4 Mineral Sands Production of 218.7 Kt vs. 291.5 Kt Year-on-Year; Rev. $358.3m A vs. $392.0m y/y.
– MYR.AU reports 5-month sales to January 1 of +12.3% year-over-year.
– (AU) Australia Dec NAB Business confidence: -12 vs. +12 before; Conditions: 8 against 11 before.
Japan
– Nikkei 225 opened -0.4%.
– (JP) Bank of Japan (BOJ) Gov Kuroda: Rising commodity prices more important factor in pushing inflation than weaker yen, current weaker yen not abnormal – Parliament .
– (JP) Japanese Prime Minister Kishida: It is desirable to create a positive cycle in which companies are able to pass on costs, salary increases and generate economic growth.
– (JP) Japan Economy Min Hagiuda: Confirms he will start subsidizing gasoline to refiners.
– (JP) Japan Chief of Staff Sec Matsuno: Expect companies to raise wages this spring.
– (JP) Japan Dec Tokyo Condominiums for Y/Y sales: -9.7% vs. +95.4% before.
– (JP) Japanese MoF sells 600 billion yen vs 600 billion yen quoted in JGBs at 0.70% over 40 years, yield at lowest price accepted 0.760% vs 0.7250% before, bid-to- cover: 2.57xv 2.37x front.
Korea
– Kospi opened -0.2%.
– (KR) SOUTH KOREA Q4 PRELIMINARY GDP Q/Q: 1.1% V 1.1%E; Y/Y: 4.1%V 3.9%E; 2021 annual GDP: 4.0% vs. 4.0%e (11-year high).
– 005490.KR Korea’s National Pension (largest shareholder) will vote in favor of the split plan on January 28 – press.
– (KR) South Korea eyes possible cruise missile launch by North Korea at 8:00 a.m. local time today – Korean Press.
China/Hong Kong
– Hang Seng opened -1.6%; Shanghai Composite opened -0.4%.
– (CN) Chinese Ministry of Commerce (MOFCOM) Official Chen: Will Foster Continued Consumption Recovery in 2022; facing a grim foreign trade situation this year.
– (CN) Zhang Wenhong [seem as the Dr Fauci of China] said Shanghai should prepare for a scenario where the number of COVID cases [is] 5 or ten times higher – Global Times.
– 3333.HK announces the progress of cases: advisors having started an active dialogue with offshore creditors, it will take more time to assess the number of potential solutions.
– (CN) The Chinese PBOC sets the reference rate for the yuan: 6.3418 against 6.3411 previously.
– (CN) China PBOC Open Market Operation (OMO): sells 150 billion yuan in 14-day reverse repos against 150 billion yuan previously; Net inject CNY50B v inject CNY50B before.
– 1112.HK will not proceed with the planned 5-year USD bond issue.
– (CN) China Mortgage Rates More Affordable Following Rate Cuts – Chinese Press.
– (HK) Hong Kong is locking down an additional Kwai Chung building for 5 days due to covid, will give an update on covid curbs later this week.
Other
– (SG) CENTRAL BANK OF SINGAPORE (MAS): TO SLIGHTLY INCREASE THE APPRECIATION RATE OF THE S$NEER POLICY BAND, leave the width of the strip and the level at which centered unchanged (unplanned).
North America
– (US) US Antitrust Chief Kanter: DOJ should prioritize litigation over settlement of merger cases, divestitures should be the exception not the rule.
– IBM Reports Q4 $3.35 v $3.14e, Rev $16.7B v $16.0Be (ex Kyndryl spin-off); Guide FY22 Initial Single-Digit Growth (cc), FCF $10.0-10.5 billion – earnings slides.
Europe
– (IT) Italian lawmakers unable to elect new president in first round, next vote Tuesday.
Levels from 12:15 a.m. ET
– Hang Seng -1.6%; Shanghai Compound -1.5%; Kospi -2.8%; Nikkei225 -2.3%; ASX 200 -2.5%.
– Equity futures: S&P500 -1.4%; Nasdaq100 -1.9%, Dax -0.8%; FTSE100 +0.5%.
– €1,330-1,1309; JPY114.10-113.68; AU$0.7175-0.7129; NZD 0.6708-0.6669.
– Commodity futures: Gold +0.0% at $1,842/oz; Crude Oil +0.5% to $83.73/bl; Copper -0.6% to $4.43/lb.
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