Feb 7 Asian Macro Key things to know before trading Asia on Monday


07 Feb

Super Bowl Sunday likely to be quieter than normal.  Earnings continue this week (Coca-cola, Cisco, Disney, Honda, MGM AstraZeneca amongst others) as will the progress of the US stimulus bill.

Key data this week includes US CPI data (Wednesday) along with Powell speaking to the Economic club of New York also on Wednesday.We also get  Chinese Inflation data,  GermanyTrade and Inflation data, UK GDP and Trade data.
Short trading week in Asia due to Lunar New Year this week.  Covid restrictions mean less travel, especially in China and that is likely to mean more Chinese factories staying open.Holidays this weekJapan closed Thursday for National Foundation DayS Korea closed on Thursday and Friday re-opens Monday 15 FebruaryTaiwan closed Monday re-opens 17 FebruaryChina closed from Thursday and re-opens Thursday 18 February Hong Kong closed Friday and re-opens Tuesday 16 FebruarySingapore closed Friday re-opens Monday 15 February
WTO Nigeria’s Ngozi Okonjo-Iweala was poised to become the first African and first woman to lead the embattled World Trade Organization, after a South Korean rival withdrew on Friday and the United States reversed its previous opposition.
Press reports the United States, Japan, Australia and India are working to arrange the first meeting of their leaders under the so-called Quad framework amid China’s growing presence in the region, a source from one of the countries involved said.  Key will be India, it is the only one with a land border but tends to cautious on the framework.
Data shows that Israel's mass vaccination provides a clear indication that jabs prevent Covid-19, looking at the cases of those ages 60 and above. +VE for sentiment.  It also showed that those who contracted covid post inoculation had a milder course of the disease. Key problems remain availability of vaccines and scepticism from the younger age groups.  Comes as research in S Africa and Brazil reveals new covid mutations that can reinfect people who have already had the virus.

DOW +0.3%, NDX +0.57%, S&P +0.39%, Russel 2K +1.4% with S&P and NDX closing at new high’s.  Some concern with the downward revision of the December payroll numbers to 227k from 140k but taken as supporting of more stimulus. The drop in unemployment rate was due to workers exiting the workforce rather than rising employment.The VIX dropped to around 21, a drop to 20 is seen as being a buy signal for algo traders and some other big players.Earnings season still continuing; so far 184 of the S&P 500 have reported with 84.2% beating forecasts. The Senate early Friday approved a measure allowing Democrats to continue President Joe Biden’s US$1.9 trillion coronavirus relief plan through the chamber without Republican support. Vice President Kamala Harris was in the chair to cast the tie-breaking vote, her first.Aware of the European Union's concern about tariff policies, the White House is reviewing its tariffs against Europe, said press secretary Jen Psaki. +VE Activation Blizzard +9.6% after reporting Q4 which beat estimates. +VE cross read to other game makers.Peloton -5.9% good results but warned logistical issues would hurt near term earnings.
Banks JPMorgan Chase -0.2%, Citigroup +0.3%, Wells Fargo +0.3%, Amex +1.1%
Work from home names: Facebook +0.6%, Apple +0.3%, Amazon +0.6%, Netflix +0.3%, Disney +0.5%,  Zoom Video +7.6%, Alphabet +1.7% and Microsoft +0.1%,
Tech NXP +0.3%, Nvidia +0.5%, Micron -0.2%, AMD +0.1%, Skyworks -0.1%
Re-opening stocks  Boeing -1.3%, Caterpillar +0.7%, Simon Property -1.7%, Kohl’s +0.4%, Nordstrom +0.2%, Gap +2.3%, United Airlines +0.6%, Carnival +1.2%, Wynn Resorts +7.6%, Chevron +0.3%, Exxon Mobil +3.3%,  
Lock down names Campbell Soup +1.2% General Mills +0.9%, JM Smucker +0.3%
China based Luckin Coffee filed for Chapter 15 bankruptcy protection in the US, less than a year after the scandal revealing hundreds of millions of dollars of sales had been fabricated.
Amazon's announcement this week that it would be rolling out artificial intelligence (AI)-powered cameras in its branded delivery vans for safety has drawn criticism from privacy advocates and workers concerned with being subjected to surveillance on the job.
DATA
Balance of Trade Dec $-66.6b vs -69b Nov Revised (F/cast was -70b)
Non Farm Payrolls Jan +49k vs -227k Dec revised (F/cast was +45k)
Unemployment Rate Jan 6.3% vs 6.7% Dec (F/cast was 6.7%)
Participation Rate Jan 61.4% vs 61.5% Dec (F/cast was 61.3%)
Average Hourly Earnings Jan +5.4% YoY vs 5.4% Dec revised (F/cast was 5%)
Average Hourly Earnings Jan+0.2% MoM vs +1% Dec revised (F/cast was +0.3%)
Average Weekly Hours Jan 35 vs 34.7 Dec (F/cast was 34.8)
Exports Dec $190b vs 184.2b Nov (F/cast was 185b)
Imports Dec $256.6b vs252.3b Nov (F/cast was 255b)
Baker Hughes Oil Rig Count 299 vs 295 prior
Baker Hughes Total Rig Count 392 vs 384 prior
Consumer Credit Change $9.73b vs 13.93b revised (F/cast was 12.6b)
USD was weaker vs Yen & Euro. Bitcoin +6.5% @ 40,185.68, VIX -4% @ 20.9, US T10 @ 1.169% rising as unemployment rate dipped.
OIL Brent +0.85%, WTI +1.1% closing at yearly highs
Gold +1.3%, Silver +3.1%, Copper +2.5%
AHEAD Consumer Inflation Expectations.

DAX -0.03%, CAC +0.9%, FTSE -0.22%  CAC opened higher and initally worked higher then traded sideways and dipped into the close.  DAX and FTSE opened flat and traded sideways around flat all day.  Earnings in focus with results from BNP Paribas, Sanofi, Intesa Sanpaolo and Thyssenkrupp before trading.
Banks lead the gains and Telcos the laggards
BNP +2.5% Q4 net income of 1.59 billion euros ($1.90 billion) beat f/casts.
Beazley 14.9% on confident outlook for 2021 despite swinging to a loss in 2020.
Neste -6% after its fourth-quarter earnings report.French Connection +64% announced it had received two takeover bids.
Barratt Development +1% after better than expected results.Press reports German carmakers are building up semiconductor stockpiles which could see a short term rise in demand +VE for Chip makers; especially TSMC
DATA
GERMANY 
Factory Orders Dec -1.9% MoM vs +2.7% Nov revised (F/cast was -1.2%)
FRANCE 
Balance of Trade Dec Euro -3.39b vs -3.79b Nov (F/cast was -3.4%)
Current Account Euro -1.2b vs -1.4b Nov
UK 
Halifax House Price Index Jan +5.4% YoY vs +6% Dec (F/cast was +4.9%)
Halifax
AHEAD
EUROZONE No data due
GERMANY Industrial Production
FRANCE No data due
UK No data due

JAPAN Expect Nikkei to open higher following the US.  Yen closed at 105.36
Data due pre market we get
Current Account (Nov was Yen 1878.4b F/cast is 1110b) and
Bank Lending Dec was +6.2% F/cast is +6.1%),
later Eco Watchers data Outlook (Dec was 37.1 F/cast is 34) Current (Dec was 35.5, F/cast is 32).
Tokyo reported 639 new covid cases on Saturday (vs 577 Friday). Nationwide cases were 2,279 and the number of covid deaths was 94.
AstraZeneca PLC said on Friday it had applied for approval in Japan of its COVID-19 vaccine, making it the second pharmaceutical firm to do so after Pfizer Inc. +VE
Japan’s exports of agricultural, fishery and forestry products and related foods reached ¥922.3 billion in 2020, +1.1% YoY, a preliminary government report showed Friday. Although exports dropped year-on-year in the first half amid the spread of coronavirus infections, their value marched back to a record high for the eighth straight year thanks to strong demand for eggs and other agricultural products for home consumption, as people spent more time at home. +VE
Chinese coast guard vessels entered Japan’s territorial waters near the China-claimed Senkaku Islands for the second day in a row Sunday. On Saturday, the incursion lasted about 8½ hours, with Tokyo lodging a protest with Beijing through multiple diplomatic channels. -VE
Olympics remain in hot water after the sexist comments from Yoshiro Mori, -VE for sentiment and support for the games taking place.
Japan Airlines Co is offering a service to cover the expenses of its international passengers for their tests, treatment and quarantine if they have become infected with COVID-19 while overseas.  Travelers with tickets until June 30 are eligible to receive the service for free, if they had tested positive outside their country of residence and within 31 days from the departure date of their first flight, JAL said, becoming the first airline in Japan to launch such a program. +VE
ANA Holdings Inc plans to reduce its workforce in the aviation business by roughly 20 percent over the next five years through natural attrition to cut costs and cope with the COVID-19 crisis that has depressed travel demand, sources familiar with the matter said. -VE
Mazda Motor Corp says its global production will be cut by 7,000 vehicles in February from its initial plan, as it will not be able to procure enough chips for key safety and environmental technology amid a global shortage. The automaker will review its production plan for the fiscal year -VE
Softbank; FT Weekend article points out that a number of its investments have come good recently like Uber, OSISoft and DoorDash but many others like Oyo, Katerra and Greensill Capital remain laggards.

SOUTH KOREA 
Expect markets to open higher but the indexes are likely to be rangebound in a shortened trading week.  Earnings and valuations the focus. Retail likely to be sellers ahead of the holiday but foreigners likely to be looking to accumulate on any weakness.
No data due
KDCA reported 372 new covid cases (vs 392 Saturday and 370 Friday) but below 400 for the third consecutive day.
South Korea on Saturday eased curfews on more than half a million restaurants and other businesses outside the capital Seoul, letting them stay open an hour later, amid a public backlash over tight curbs to contain COVID-19 from Monday. Slight +VE
South Korea‘s Drug Safety Ministry announced Friday it has approved Celltrion’s COVID-19 treatment candidate for conditional use. Conditional approval of Celltrion’s CT-P59, an anti-COVID-19 monoclonal antibody treatment candidate, has become the country’s first homegrown COVID-19 treatment. +VE
South Korea's major listed firms' cash dividends shot up 60% in 2020 from a year earlier, led mostly by top market cap Samsung Electronics, data showed Sunday. The combined amount of dividends handed out by 124 listed firms surveyed in 2020 reached 30.2 trillion won ($26.8 billion), rising sharply from 19 trillion won disbursed a year earlier, according to the data compiled by market research firm FnGuide. +VE
South Korea unveiled a 48.5 trillion won ($43.2 billion) plan to build the world's largest wind power plant by 2030 as part of efforts to foster an environmentally-friendly recovery from the COVID-19 pandemic. +VE
LG Electronics Inc. said Sunday it has set up South Korea's largest energy storage system (ESS) with local partners as the tech giant eyes to expand its presence in the ESS market. LG Electronics said the ESS was built on Anjwa Island, South Jeolla Province, some 320 kilometers south of Seoul, in cooperation with KCH Group, Korea Western Power Co. and Top Solar Group. +VE
SK Chemicals on Friday reported its 2020 net profit of 258.3 billion won ($229.9 million). The company said in a regulatory filing that operating income for the year rose 18.5 percent on-year to 95.2 billion won. Annual revenue decreased 15.7 percent to 1.2 trillion won.
NCSoft Corp., a major South Korean online and mobile game developer, said Friday its net profit soared 63.3 percent in 2020 from a year earlier thanks to the continued popularity of its major mobile titles. Net profit stood at 586.6 billion won ($522 million) last year, compared with 359.3 billion won a year earlier, NCSoft said in a regulatory filing. +VE
Kakao introduced its newly developed mobile-based remote work solution and digital wallet during the second roundtable meeting of the Organization for Economic Cooperation and Development’s Digital for SMEs global initiative, the company said Friday.
South Korean mobile carriers are expanding services integrated with artificial intelligence (AI) technology as they shift focus from telecommunications to find new growth drivers. +VE
Lotte Chemical Corp  said Friday its fourth-quarter net profit more doubled from a year earlier on strong demand for its petrochemical products.The petrochemical unit of Lotte Group posted a net profit of 97.2 billion won ($86.5 million) in the October-December period, up 104.1 percent from a year earlier, the company said in a regulatory filing.
South Korea's exports of cosmetics +16% YoY  data showed Sunday, on the back of the growing demand from the United States and Asian countries. +VE

TAIWAN Market closed re-opens 17 February.  
Data out after market Friday 
Wholesale Prices Jan -2.86% YoY vs -5.1% Dec (F/cast was -3.9%)
Inflation Rate Jan +0.51% MoM vs +0.17% Dec (F/cast was +0.1%)
Inflation Rate Jan -0.16% YoY vs +0.06% Dec (F/cast was +0.1%)
Foreign Exchange Reserves Jan $541.481 vs 529.911b Dec (F/cast was 541b)Data due Monday Balance of Trade, Export and Import
Top officials yesterday again rebuffed rumors of a Cabinet reshuffle, saying that the issue is distracting from COVID-19 response measures. Premier Su Tseng-chang  Saturday said that the Cabinet’s pandemic and economic successes are thanks to the cooperation of all ministers.
Commentators noting that a number of investors raised cash before the long market holiday hoping for better opportunities after the Lunar New Year holiday. Many expect resistance as the market approaches 16,000.  On Friday it broke above 15,900 to 15,940 in early trading but was unable to hold above that level and closed at 15,802

CHINA 
Expect market to open lower with concerns still over covid and US/China relations and hence many retail investors preferring to take cash out and sit on the sidelines during the Lunar New Year holiday.
No data due but out Sunday afternoon 
Foreign Exchange Reserves Jan (Dec was $3.217tn. F/cast was $3.2tn)
Sinovac Biotech said on Saturday that its unit’s COVID-19 vaccine has been approved for use by the general public by China’s medical products regulator. +VE
In the first direct communication Antony Blinken, US secretary of state, warned China that Washington would hold Beijing “accountable for its abuses”. He had a call with Yang Jiechi, China’s top foreign policy official. Blinken said he had told his counterpart that the Biden administration would stand up for democratic values while holding Beijing to account over its human rights record in the Xinjiang and Tibet regions and in Hong Kong. He also urged Beijing to condemn the military coup in Myanmar.
Beijing’s official take on the call gave little mention of Blinkin’s warnings and said that Yan urged the US to correct it recent mistakes and act in a constructive manner and not to interfere in Xinjiang, Tibet and Hong Kong. It reports he said “No one can stop the great rejuvenation of the Chinese nation,”
On Friday ahead of the call;  Ministry of Foreign Affairs said China is committed to fostering relationship with the US on mutual respect and win-win collaboration, eliminating conflicts and opposition. It hoped the US could treat China-US relationship upon objective rationality, so as to align with people's will of two countries and global trend. Through active and constructive dialogue, China anticipated the US to focus on cooperation and manage differences.
China Securities Regulatory Commission Spokesperson Gao Li disclosed an innovative regime to command repurchase for fraudulent issue of listed shares, and the authority is soliciting public views over implementation of the drafted bill. The Chinese market watchdog will carry out investment and financing reform and press ahead with optimization of market entry for mid-to-long term capital, furthered Gao.
Luckin Coffee (LKNCY.US) issued a statement that the Company today filed a verified petition under chapter 15 of title 11 of the United States Code with the United States Bankruptcy Court for the Southern District of New York.  The Company is negotiating with its stakeholders regarding the restructuring of the Company’s financial obligations. All Company stores remain open for business in China. The filing of the Chapter 15 Petition is not expected to materially impact the Company’s day-to-day operations.
Wuhan residents remember coronavirus 'whistleblower' doctor a year after his death. Li Wenliang, an ophthalmologist at a hospital in the city, became one of the most visible figures in the early days of the outbreak in Wuhan when he tried to sound the alarm about its appearance, but was reprimanded by police for “spreading rumours.” Worth noting that when President Xi Jinping honoured the “heroes” of the “people’s war” against the virus in September, there was no mention of Li’s contribution.    Raises concerns about the Party line on reporting over covid.
A first shipment of 88 liters of active ingredients to make AstraZeneca’s COVID-19 vaccine in Brazil arrived from China on Saturday, essential input to speed the country’s troubled vaccination program.
A PPT report which is circulating within Deloitte arouses extensive attention, as Chinese official media Xinhuashidian revealed on Weibo. The PPT reportedly involved multiple audit violations, connecting to a serious of listed companies. For this, China's regulatory department made immediate intervention and investigation.  The involved listed companies are SINOTRANS (00598.HK), BOQI ENV (02377.HK) and RYB Education (RYB.US), according to report.
Foreign firms look to reduce reliance on China, poll shows.  They are looking to adopt a strategy known as ‘China Plus One’ sees companies boosting operations in Vietnam, India and elsewhere.  Also the growing trend of remote work brought on by Covid-19 pandemic has also encouraged firms to downscale offices, survey says.The online survey conducted in December by Japanese staffing firm Pasona Group, 57 per cent of Japanese companies in Vietnam and 55 per cent in India said they would expand operations in the host countries, compared with the average of 39 per cent among all 11 countries and regions polled.
America's 2020 trade deficit with China drops to US$311b -10%
The PBoC wrote in an article that the top priority of online platform oversight is to create a "responsible financial" concept by whatever means and penetrative regulations.  Slight -VE for Alibaba, Tencent etc.

HONG KONG  
ADR’s +122pts at 29,410 with weakness in the ADR’s of HSBC, CNOOC, BoC, CK, Baba and Xiaomi; the rest were in the green.  Baba may see upside after the good demand for its bond sale. 
No data due Monday but out after market Friday 
Foreign Exchange Reserves Jan $493.5b vs 491.8b Dec revised (F/cast was 510b)
Centre for Health Protection said there were 19 new COVID-19 cases in Hong Kong Saturday; (vs 37 Friday).  The administration has effected an number of overnight lockdowns over the weekend.
The Government announced that the testing and isolation arrangements for exempted persons, including air crew members, sea crew members of goods vessels entering Hong Kong for cargo operations and other exempted persons, will be tightened with effect from February 20.
IPO
BASECARE-B (02170.HK), to be listed next Monday, closed at $31.2 in
gray market, up 14% or $3.84 against the listing price $27.36,
on turnover of $266 mn, PhillipMart data showed. Excluding the handling fee, the book gain is $1,920 per board lot size of 500 shares.
SHORT SELLING Friday 18.3% vs 19.5% Thursday 
Top Shorts:  Hengan (1044) 44%, Henderson Land (12) 35%, CCB (939) 35%, Hang Seng Bank (11) 34%, Wuxi Bio (2269) 33%, Bank of China (3988) 31%, Ping An (2318) 29%,  AIA (1299) 29%,  Power Assets (6) 28%, Country Garden (2007) 28%, Sunny Optical (2382) 28%, Bud Apac (1876) 27%, CLP (2) 26%, BankComm (3328) 26%, Wharf REIC (1997) 26%, Tencent (700) 25%, Hang Lung Ppty (101) 25%.
WATCH
Alibaba Bond Sale see strong demand.  The $5bn sale attracted more that $38b in orders despite the concerns over Chinese regulators taking action against the company.  The issue had been scaled back from $8bn due to those concerns.  Yields on the 10-, 30- and 40-year bond tranches totalling $4bn were 0.3 percentage points below initial guidance. The yield on a 10-year, $1.5bn bond priced at 2.143 per cent, 1 percentage point above that of the equivalent maturity US Treasury.
DFZQ (03958.HK) announced preliminary accounting data for the year of 2020 under the China Accounting Standards for Business Enterprises that net profit reached RMB272 million, up 11.8% yearly. EPS equaled RMB0.38.
PCCW (00008.HK) announced the annual result ended December 31, 2020. It was swung into loss of HK$1.02 billion, against net profit of HK$681 million in a year-ago period, partly due to one-time non-cash accounting items. LPS was HK13.22 cents. A final dividend of HK23 cents per share was declared, resulting in full-year cash dividend of HK32.18 cents per ordinary share. PCCW's Viu posted MAU growth of 29% to 45 million last year, revealed Group Managing Director Srinivas Bangalore Gangaiah, who was hopeful for a breakeven for the platform in the next 1-2 years with enormous development opportunities.   Despite ebbing local advertisement spending, ViuTV has in recent year managed to gain ad revenue and market shares through Made-in-Hong Kong programs and benign cooperation with advertisers.
China's Social Security Fund reduced 59.867 million shares of BANK OF CHINA (03988.HK) at an average price of $2.66 per share on 2 February, involving $159 million, as revealed by the Stock Exchange.  Upon completion, the Fund's stake in BANK OF CHINA dropped to 6.94% from 7.02%.
SWIRE PROPERTIES (01972.HK) released the 4Q20 operating statement. The tenant occupancy rate of the overall HK office as at 31 December 2020 was 96%, down 3 ppts yearly.  The retail sales of The Mall, Pacific Place for the year ended 31 December 2020 dropped 31.2%.
MSCI announced that it will add KUAISHOU-W (01024.HK) to its Standard All Shares Index and China All Shares Index with effect from 1 March 2021.
Guangzhou Futures Exchange confirmed its registered capital and shareholders, Caixin.com reported. With a registered capital of RMB3 billion, the Exchange wooed eight shareholders, including PING AN (02318.HK) and HKEX (00388.HK) with stakes of 15% and 7% respectively.
XIAOMI-W (01810.HK) will launch Mi 11, priced from EUR799, overseas from February 8, said Chinese media.
The Lands Department announced that the residential site at Nos. 9 and 11 Mansfield Road, the Peak has received five tenders in total. Bidders included CK ASSET (01113.HK), HENDERSON LAND (00012.HK), K. WAH INT'L (00173.HK) and SHK PPT (00016.HK) on a sole basis. Equally, WHARF HOLDINGS (00004.HK)'s spokesman said the group has submitted a tender for the site.
The People's Bank of China announced that an MOU on the Launch of the Cross-boundary Wealth Management Connect Pilot Scheme in the Guangdong-Hong Kong-Macao Greater Bay Area was executed by PBoC Governor Yi Gang, CBIRC Chairman Guo Shuqing, CSRC Chairman Yi Huiman, SAFE Administrator Pan Gongsheng, HKMA Chief Executive Eddie Yue, SFC Chairman Tim Lui, and AMCM Chairman Chan Sau San.
CCL last printed at 176.21, up 0.67% weekly. CCL Mass climbed 0.75% weekly to 178.92. CCL (small-to-medium flats) gained 0.63% weekly to 176.27. CCL (large units) added 0.87% weekly to 175.93.
Said the Centaline Property, believed there will be a home price upsurge soon given rising deals and an earlier Spring Festival peak season. The uptick may struggle in stability.
MTR CORPORATION (00066.HK)  announced that in view of the latest development of the COVID-19 pandemic, the arrangements for activities on Lunar New Year’s Eve, as well as a series of measures implemented by the Government to prevent large gatherings of people, after prudent consideration, the corporation will maintain normal operating hours on Lunar New Year’s Eve (11 February 2021) and overnight train service will not be provided.  Nevertheless, train service at certain periods of the day will be enhanced to meet passenger demand as an endeavor to maintain the same level of comfort in train compartments.

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