Jan 14 Asian Macro Initial Thoughts Asia to open flat ahead of Chinese Trade Data


14 Jan

Asian Futures Nikkei Futures opened flat currently -15pts,  HK ADR’s -39pts and Australia flat after early trades. Expect cautious trading ahead of the China Trade Data, especially as China imposing more travel restrictions to try and contain its latest covid outbreak.
US Futures opened slightly higher Dow +46pts, S&P +0.2% and NDX +0.1%

DOW -0.03%, NDX +0.43%, S&P +0.23%, Russel 2K -0.75% Markets traded around flat for most of the day; with higher inflation data. Uncertainty around Trump's remain days in office as the House impeached him and covid concerns.Intel jumped nearly 7% on news that CEO Bob Swan would step down, effective Feb. 15
Banks Some caution ahead fo earnings: JPMorgan Chase +0.1%, Citigroup +0.3% and Wells Fargo -0.4%, AMEX +0.6%
Work from home names: 
Facebook +0.2%, Apple +1.6%, Amazon +1.4%, Netflix +2.7%,  Disney +0.1%, Zoom Video +2.2%, Alphabet +0.6% and Microsoft +0.7%,
Tech NXP +0.8%, Nvidia +0.4%, Micron +0.6%, AMD -3.8%, Skyworks -0.2%
Re-opening stocks 
Boeing -0.6%, Caterpillar -0.8%, Simon Property +4%, Kohl’s -0.4%, Nordstrom +0.9%, Gap -4.6%, United Airlines +0.8%, Carnival -0.2%, Wynn Resorts -1.9%, Chevron -0.1%, Exxon Mobil +1.1%,
Lock down names 
Campbell Soup +0.1% General Mills +1.9%, JM Smucker +0.3%
Earnings from: IHS Markit -1.5%, Infosys +1.2% and Wipro +0.3%
DATA
MBA Mortgage Applications +16.7% vs +1.7% prior
MBA 30 year Mortgage Rate 2.88% vs 2.86% prior
Inflation Rate Dec +1.4% YoY vs +1.2% Nov (F/cast was +1.2%)
Inflation Rate Dec +0.4% MoM vs +0.2% Nov (F/cast was +0.3%)
Core Inflation Rate Dec +1.6% YoY vs +1.6% Nov (F/cast was +1.6%)
Core Inflation Rate Dec +0.1% MoM vs +0.2% Nov (F/cast was +0.1%)
EIA Oil Crude Oil stocks change -3.247m vs -8.01m prior (Consensus was -2.266m)
EIA Oil Gasoline stocks change +4.395m vs +4.519m prior (Consensus was +2.695m)
Monthly Budget Statement Dec $-144b vs -145b Nov (F/cast was -82b)
Beige Book: the central bank noted that, with the pandemic worsening across the country, the economic recovery would likely slow in coming months.
USD was slightly stronger vs Yen & Euro. Bitcoin +13.7% @ 37,591, VIX -4.8% @ 22.21, US T10 @ 1.092%
OIL Brent -1.03%, WTI -0.66%
Gold +0.027%, Silver -0.59%, Copper +0.14%
AHEAD Initial Claims, 4 week average Claims, Continuing Claims, Export & Import Prices.
Earnings: BlackRock, First Republic, Taiwan Semiconductor, Delta Airlines

DAX +0.11%, CAC +0.21%, FTSE -0.13% Markets traded sideways throughout the day around flat with investors watching covid cases with lockdowns extended in German and Holland, vaccine roll-outs and US politics. European data was better than expected.
Petrochems and Telcos leading but Banks weak along with Travel and Leisure.
Trading updates from Sainsbury’s +2.2%, Persimmon -6.1% on poor revenue numbers and ASOS +2% as growth ’surpassed’ their expectations.
Carrefour +13.4% after Canada’s Alimentation Couche-Tard -10.2% said it had opened merger talks with Europe’s largest retailer.
Telefonica +9.6% having announced a $9.4 billion sale of phone masts to American Towers.
Orsted -4.9% but off initial lows, after issuing a profit warning. ProSiebenSat.1 -6% after private equity firm KKR looked to sell part of its stake in the German mass media company.
DATA
EUROZONE
I
ndustrial Production Nov +2.5% MoM vs +2.3% Oct revised (F/cast was +0.3%)
Industrial Production Nov -0.6% YoY vs -3.5% Oct revised  (F/cast was -3.2%)
GERMANY 
Wholesale Prices Dec +0.6% MoM vs +0.1% Nov (F/cast was +0.3%)
Wholesale Prices Dec -1.2% YoY vs -1.7% Nov (F/cast was -1.4%)
AHEAD
EUROZONE ECB Monetary Policy Meeting Accounts.
GERMANY GDP Growth, Government Budget
FRANCE  No data due
UK  No data due

JAPAN Nikkei futures opened flat, expect a flat open. Pre market data likely to influence market direction along with the Chinese Data due out around Japan lunchtime.  Yen unchanged currently 103.85
Data due pre market
Machinery Orders Nov (Oct YoY was +17.1% & F/cast is -7% [Oct was +2.8% MoM & F/cast is -16%])
PPI Dec (Nov was -2.2% YoY and F/cast is -2.1% [Nov was 0% MoM & F/cast is +0.3%])
Govt expanded a state of emergency in the Tokyo area to seven more prefectures on Wednesday amid a steady rise in COVID-19 cases. PM Suga also said Japan will suspend fast-track entry exceptions for business visitors or others with residency permits, fully banning foreign visitors while the state of emergency is in place.Tokyo confirmed
Honda said it would halt output at its British factory from Monday to Thursday next week due to COVID-19 related global supply chain issues, the latest production suspension in recent weeks. -VE
Seven-Eleven Japan Co. has plans to extend the time period before expiration for its onigiri rice balls — doubling it to about 36 hours from the time they are made. This plan, which will utilize temperature control techniques, is scheduled to go into action in March, beginning with a select number of products. The company anticipate both a rise in sales and a reduction in the amount of rice balls discarded by about half. +VE
The number of corporate bankruptcies in Japan dropped to the lowest in 31 years in 2020, aided by government financial support amid the novel coronavirus pandemic, data released by a credit research company showed Wednesday.

SOUTH KOREA Expect markets to open flat, with caution ahead of the Chinese Traded Data.  Pre market data better than forecast slight +VE
Data out 
Export Prices Dec -5.4% YoY vs -4.6% Nov (revised from -4.9%)
Import Prices Dec -10.2% YoY vs -10.3% Nov (revised from -10.6%)
Samsung Biologics’ newly appointed CEO John Rim presented a multidimensional vision for the company’s next 10 years at the virtual JP Morgan Healthcare Conference 2021 on Wednesday.
Eastar Jet said Wednesday it plans to file for court receivership this month to find a new investor amid the COVID-19 pandemic.
A coronavirus antibody treatment under development by local drugmaker Celltrion has shown a clinical improvement rate of 54 percent among mild and moderate COVID-19 cases, the company announced Wednesday.  The immediate reaction from the industry was that a 54 percent improvement rate is too low to be considered a treatment. However, antibody treatments are meant to only alleviate, not cure, some were quick to add.
A notable trend at this year’s CES is that the boundaries between different sectors of technology are not just being blurred, but crushed, as the pandemic accelerates the pace of innovation.  With the all-digital CES 2021 heading into its third day, many viewers have been taken by surprise by unexpected presentations from major companies, such as conventional automaker General Motors, auto parts maker Bosch and camera company Canon.
Media regulator said Wednesday it will ease rules to allow commercial breaks during TV programs for terrestrial broadcasters in a move to boost the country's slumping broadcast industry.

TAIWAN Expect market to open flat with caution ahead of the China trade data.
No data due 
The Central Epidemic Command Center (CECC) yesterday announced six places where two locally infected COVID-19 cases had visited between Thursday last week and Sunday, urging people who had been at the places at the same time to monitor their health.
China Steel Corp, yesterday said that it would raise domestic steel prices by 9.5 percent for delivery next month, with the hike exceeding market expectations. The adjustment is the eighth straight month of increases for the Kaohsiung-based company. +VE
Taiwan Mobile must complete its recall of its Amazing A32 smartphones within two months and pay compensation to customers who purchased them or were affected by a malware problem that led to identity theft complaints, the National Communications Commission (NCC) said yesterday, one week after it had ordered the telecom to recall all of the self-branded, China-made smartphones still in use over the security glitch. -VE
Asia-Pacific Telecom (APT) should improve its 4G coverage first if it wants to share Far EasTone Telecommunications’ 5G spectrum and network, the National Communications Commission (NCC) said yesterday. Far EasTone secured 80 megahertz (MHz) of bandwidth in the 3.5 gigahertz (GHz) frequency band and 400MHz in the 28GHz band in a two-phase auction organized by the commission, which ended on Feb. 21 last year.
Hon Hai Precision Industry Co known as Foxconn Technology outside of Taiwan, is setting up a vehicle venture, strengthening its automotive capabilities at a time when technology companies, including its California ally, are looking to expand in automaking. +VE
Shin Kong Life Insurance Co on Tuesday won a bid for the China Development Financial Holding Corp headquarters with an offer of NT$9.28 billion (US$326.24 million), beating a bid by China Life Insurance Co.
Taiwan Semiconductor Manufacturing Co  was the top pick on the investment list of the National Stabilization Fund , the fund’s management committee said yesterday.

CHINA Expect market to open lower with caution ahead of Trade data and concerns over covid after new preventative measures announced and US relations.
Data due after the open  
Balance of Trade Dec (Nov was $75.4b and F/cast is 65b)
Exports Dec (Nov was +21.1% YoY and consensus is +15%)
Imports Dec (Nov was +4.5% YoY and Consensus is +5%)
After market Wednesday
Vehicle Sales Dec +6.4% YoY vs +12.6% Nov (F/cast was +12%)
Govt imposing more restrictions ahead of Chinese New Year to control the latest outbreak of covid in Hebei. China posted its biggest daily jump in COVID cases at 115, in more than five months on Wednesday, stepping up containment measures that have seen four cities put under lockdown, as the world’s second biggest economy scrambles to head off a new wave of infections.  -VE for Travel stocks
US bans all imports of cotton and tomato products from Xinjiang Effective immediately along with products from outside the region the use its resources -VE
A senior NASA scientist pleaded guilty on Wednesday to lying about his ties to a program that encourages researchers to develop relationships with China in exchange for grants, the U.S. Department of Justice said on Wednesday. -VE for sentiment

HONG KONG  ADR’s -39pts at  28,196 with weakness in Petrochems and Chinese Financials but E Commerce names seeing support. 
No data due
SHORT SELLING Tuesday 11.1% vs 12.1% Tuesday 
Top Shorts: NWD (17) 33%, Bank of China (3988) 33%, Ping An (2318) 30%, WH Group (288) 28%, Anta (2020) 27%, Bud APAC (1876) 27%, Hang Seng Bank (11) 27%, HK & China Gas (3) 26%, BankComm (3328) 25%,  Wharf REIC (1997) 25%, Hengan (1044) 25%, AIA (1299) 25%.
BUYBACKS/INSIDER DEALING 

Li Ka-shing and Victor T K Li, through Li Ka Shing Foundation Limited, acquired a total of 390,000 shares in CK ASSET (01113.HK) at the average price of HK$39.9428, HK$39.85 and HK$39.8423 per share on 7 January, 8 January and 11 January 2021 respectively.  As a result, the deemed interests of Li Ka-shing and Victor T K Li in CK ASSET have respectively increased from 35.9% to 35.91% and from 35.97% to 35.98%.
WATCH
US Treasury has blocked an attempt by the Pentagon and state department to put Alibaba, Tencent and Baidu on a blacklist that would have banned US investors from holding their stock. +VE
State Street Global Advisors Asia Limited, the manager of TRACKER FUND (02800.HK), said the Fund will resume investments in Sanctioned Entities that are constituent companies of the Hang Seng Index with effect from 14 January 2021.  As disclosed in the Prospectus, the Fund's investment objective is to provide investment results that closely correspond to the performance of the Hang Seng Index. +VE Telco’s and PetroChems etc.
Ricky Hoi, Deputy Director at Macao Government Tourism Office, foresaw fewer-than-expected visitations to Macao during Lunar New Year, reported Radio Macau.  As Mainland China discourages the flow of people amid reignited pandemic, Macao is now focusing on anti-epidemic works, he added.
Shopping malls could be asked to close earlier than usual as an anti-pandemic measure, Secretary for Food and Health Sophia Chan Siu-chee warned.  And that will be with crowds expected during the Lunar New Year holiday. Chan said the move was being considered after suggestions by some experts that closing malls earlier than usual could combat Covid-19. -VE Retail names
The Lands Department announced that the tender for a site, Fanling Sheung Shui Town Lot No. 268 at the junction of On Lok Mun Street, On Chuen Street and On Kui Street, Fanling, New Territories, has been awarded to the highest tenderer, Mapletree TM (HKSAR) Limited (parent company: Mapletree Investments Pte Ltd), on a 50-year land grant at a premium of $812.94 million, in line with street consensus.
PROPERTY As many as 400 new homes will be available for sale soon with the majority of them from the Monaco tower in Kai Tak and the LP 10 tower in Lohas Park.  
Wheelock Properties will launch first-round sales for Monaco on Sunday, involving 145 units. With 2,200 checks received, the 145 homes are 14 times oversubscribed.  Monaco released the third price list, with an average selling price of HK$24,802 per square foot after discounts. It was 9.4 percent higher than the first batch average selling price of HK$22,669 per sq ft.
Nan Fung Group released the first price list of LP10 in Lohas Park, involving 179 units, with an average selling price of HK$15,888 per sq ft.
Vanke Hong Kong was set to launch 74 home at The Campton in Cheung Sha Wan on Saturday, with prices ranging from HK$17,737 to HK$21,740 per sq ft. The subscription registration ends tomorrow.
CHANJET (01588.HK) announced that the Board had today passed a resolution in respect of the preliminary proposal for the Proposed A Share Offering. The number of shares to be issued under the Proposed A Share Offering will be no more than 38.3261 million A Shares.
PICC P&C (02328.HK) announced that the original insurance premium income of the Company for the year ended 31 December 2020 was RMB432.019 billion, rising at a largely flattish rate of 0.09% yearly.
CHINA LIFE (02628.HK) announced that the accumulated premium income for the period from 1 January 2020 to 31 December 2020 was RMB612.9 billion, up 7.83% yearly.
Inland Revenue Department's Stamp Office announced that 32 residential transactions involved Buyer's Stamp Duty (BSD) in December 2020, down 44 cases or nearly 58% monthly.  Hong Kong Economic Times cited Inland Revenue Department's statistics that for the year of  2020, 16,000 residential and non-residential transactions involved the three spicy duties (Special Stamp Duty (SSD), BSD and Double Stamp Duty (DSD)), down 28.5% yearly. The taxation amounted to $13.036 billion, down 37.7% yearly, being the least in six years.
Geely and Foxconn have entered into strategic cooperation to form a joint venture held as to 50% by each of them.  The new company will offer contract manufacturing and tailor-made consulting services to carmakers.

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