Jan 18 Asian Macro Initial Thoughts Expect a cautious open ahead of China data. US markets closed.

18 Jan

I”ll be on RTHK’s Radio 3 Money talk this morning at 8m Hk time;  do tune in if you have time.  Talking about Biden’s stimulus plan and the other data out Friday in the US and looking at China’s Monday data.You can listen live across hashtag#HongKong on AM 567, via the App “RTHK On The Go” or by downloading the podcast here; https://www.rthk.hk/radio/radio3/programme/money_talk

Asian Futures Nikkei futures currently indicate +12pts,  HK ADR’s -152pts and Australia trading lower in early trades. Key this morning will be the release of Chinese data.
US no futures as markets closed Monday for Martin Luther King Jr Day.  With US earnings season now underway investors will be watching results along with covid implications and the economic data.  Only two more days for Trump to create havoc.

Norway expressed increasing concern about the safety of the Pfizer Inc. vaccine on elderly people with serious underlying health conditions after raising an estimate of the number who died after receiving inoculations to 29.  A reminder that even with vaccinations there will be issues.

Nikkei futures opened +17pts but have eased slightly; expect the market to open flat after the US sell off on Friday but could see increased volatility with lighter volumes as US markets closed.  Yen closed Friday at 103.87 Pre market Tankan Index better than forecast +VE
A fresh parliamentary session starts Monday with PM Suga under pressure as public outcry grows over his handling of the coronavirus crisis grows
Data out Tankan Index Jan -1 vs -9 Dec (F/cast was -8)
Data due Later Nov Industrial Production (Oct was +4% MoM  or -3% YoY (F/cast is 0% MoM or -3.4% YoY) and Capacity Utilisation for Nov (Oct was +6% MoM  and F/cast Is +2.5%)
Tokyo reported 1,592 new covid cases Sunday (vs 1,809 cases Saturday and 2,001 on Friday).  With 5,759 cases nation-wide and the number of hospitalised patients with serious symptoms rising to a record 970.
Hiroshima prefecture said on Friday it will carry out large-scale polymerase chain reaction (PCR) testing to curb the spread of coronavirus, a rarity in a nation that lags far behind many other countries in the number of tests conducted. The western Japan prefecture aims to conduct PCR tests for 800,000 people in the city of Hiroshima, which has a population of 1.2 million.
The health ministry plans to carry out vaccinations against COVID-19 at about 10,000 medical facilities among other locations nationwide, making them function as vaccination bases, The Yomiuri Shimbun has learned.  Each base will be equipped with ultracold freezers to store the Pfizer-BioNTech vaccine, which is being reviewed for approval to be manufactured and sold in Japan. It must be stored at ultralow temperatures at about minus 75 C, as it only lasts five days when stored in a refrigerator. Vaccinations will start in late February, with priority given to frontline medical workers. Vaccinations for people 65 and older will start as early as late March. After that, people with chronic diseases will be among those to receive the vaccine.
The government said Sunday it remains committed to holding the rescheduled Tokyo Olympics and Paralympics this summer, reacting to an international media storm sparked by comments from one of its senior ministers.
Foreign Minister Toshimitsu Motegi has expressed hopes that the United States will return to the Trans-Pacific Partnership free trade framework after President-elect Joe Biden takes office.
NTT Docomo, MUFG Bank to link financial and phone servicesvia smartphone, company sources said.  The two Japanese firms are aiming to reach an agreement by the end of March, the sources said. The partnership would allow Docomo subscribers to obtain a mortgage and other financial products via their phone. +VE
Central Japan Railway Co. said Friday about 9,500 employees will take several days off in the period between Jan. 25 and the end of February, as travel demand has declined amid a resurgence of coronavirus infections.  The company said it has decided to cancel 1,546 bullet train services on the Tokaido Shinkansen line between next Monday and Feb. 28. -VE
Monteroza, which owns the Shirokiya and Uotami pub chains to close 61 of its 337 locations.  It is known for their inexpensive food and all-you-can-drink menus. It said that as a large business, it was unlikely to qualify for the payments being planned for small bars and restaurants as part of a government rescue package.
Nippon Steel aims to reach net zero greenhouse gas emissions in 2050. The steel industry emits the largest amount of carbon dioxide in the manufacturing industry because when iron is extracted from iron oxide in iron ore, oxygen reacts with carbon, producing carbon dioxide.  Steelmakers around the world are trying to find ways to produce steel using hydrogen instead of carbon to prevent CO2 emissions. Key the company says is the level of government support it receives. Slight +VE
Auto slight -VE as Fiat Chrysler and PSA merger agreed. The new company should be able to benefit from the economies of scale that have benefited Toyota and others.

Expect markets to open lower following the US sell off on Friday
No data due but on Saturday Govt extended its current social distancing level for two weeks while easing business restrictions on cafes, gyms and other indoor facilities. Under the new measures taking effect Monday, the capital area will continue to enforce Level 2.5, the second highest in a five-tier system, and the rest of the nation will remain under Level 2.
The country added 520 more COVID-19 cases, including 20 imported infections, raising the total caseload to 72,340, according to the Korea Disease Control and Prevention Agency (KDCA). Sunday's daily number marked a sharp fall from 580 posted Saturday.
Samsung’s Jay Lee will be sentenced on Monday regarding the 2017 bribery case.  Many will watch the case as a reflection of the sentiment towards the chaebol conglomerates.
Samsung Electronics announced Sunday that the company would allow customers to rent its new flagship smartphone Galaxy S21 models for up to three days. The promotional event for the company’s new smartphone models will run through March 14, the company added.
Hyundai Motor is to build its first overseas hydrogen fuel cell factory in China as it strengthens its foothold in a fast-growing market for vehicles powered by the energy source. +VE
Hyundai Motor and its affiliate Kia Motors Corp. sold a total of 501,487 units of eco-friendly models, including electric vehicles (EVs), hybrid models and fuel-cell EVs, worldwide last year, according to their sales data. +36% YoY  +VE
A majority of South Korean manufacturing companies expect their business conditions to stay in positive terrain this year, led by a recovery in the refining, chipmaking and bio sectors amid the virus pandemic, a poll showed Sunday.  According to the survey of 1,009 manufacturers conducted by the Korea Institute for Industrial Economics and Trade (KIET), the manufacturing sector's business survey index (BSI) stood at 103 for the year. A BSI reading below 100 means pessimists outnumber optimists.
BOK chief warns of 'big losses' from debt-based stock investment, comes as data shows that retail investors have poured in more than 100 trillion won ($90.6 billion) since early last year, data showed Sunday. Individual investors net bought a combined 102.2 trillion won in local and overseas stocks from Jan. 2, 2019, to Friday, according to data from the Korea Securities Depository (KSD).

Expect market to open lower following the US sell off Friday and with caution ahead of the China data, but Tech likely to see support and limit the downside.
No data due.  But The Central Epidemic Command Center (CECC) yesterday reported one domestic and seven imported cases of COVID-19, involving people arriving from the Philippines, Indonesia, the US, South Africa and Russia.
Taiwan’s representative to Switzerland on Thursday met with his US counterpart, the latest Taiwanese diplomat to meet a US official after Washington ended its restrictions on official contacts with Taiwan on Jan. 9.
The “US Strategic Framework for the Indo-Pacific” last week sparked debate among analysts after US President Donald Trump declassified the document 20 years ahead of schedule. It outlines US priorities in the region, emphasizes the importance of defending Taiwan against military aggression and facilitating the country’s development of asymmetric strategies and capabilities.  It makes clears Taiwan’s strategic value and means that China its aware of that too in negotiations with the incoming Biden administration.
TSMC does plan to raise its proposed capital expenditure significantly, and could benefit if Intel outsources more of its production to foundries.  So Intel Corp’s earnings conference call on Thursday is expected to clarify the US semiconductor giant’s outsourcing production plans, which would be crucial regarding TSMC performance as it along with Samsung are vying for that business. +VE
ASE Technology on Friday reported net profit of NT$27.59 billion (US$968.8 million) for the whole of last year, up 63.8 % YoY and the highest in the company’s history. Earnings per share for last year were NT$6.47, ASE said in a regulatory filing. +VE
Vanguard International Semiconductor said it is seeking new M&A opportunities and other ways to expand capacity, as increasing 5G smartphone penetration and a pick-up in the automotive sector are fueling demand for its chips.  The company is also counting on a rebound in the global economy, which is forecast to grow 5 percent this year after contracting by an estimated 4 percent last year, amid optimism that the COVID-19 pandemic would be tamed as vaccinations spread, it said. Vanguard is feeling the robust demand. +VE
Acer Inc remained the world’s fifth-largest PC brand last year, with shipments increasing 23 percent from a year earlier, International Data Corp (IDC) data showed. Worldwide, PC shipments last year totaled 302.61 million units, up 13.1 percent annually, it said. “Demand is pushing the PC market forward and all signs indicate this surge still has a way to go,” Ryan Reith, vice president of IDC’s Worldwide Mobile Device Trackers program, said in a statement. “The obvious drivers for last year’s growth centered around work from home and remote learning needs, but the strength of the consumer market should not be overlooked.” +VE
CPC Corp, Taiwan and Formosa Petrochemical Corp Sunday announced that they would increase gasoline and diesel prices for an eighth consecutive week, effective today.

CHINA Expect market to open lower as the rising number of covid cases means more lockdowns and puts the recovery into question.  China data due will be in focus but the current covid outbreak puts a question market over the data.
Mainland authorities reported 109 new covid cases Sunday (119 Saturday, 130 Friday and 135 Thursday) and that 28m people were under lockdown.  The recent COVID-19 outbreaks in the northeast have come from travellers entering the country or contaminated frozen food imports, the National Health Commission (NHC) said.
Data due 
NBS Press Conference
Fixed Assert Investment (YTD) Dec (Nov was +2.6% YoY F/cast is 3.2%)
GDP Growth Rate Q4 (Q3 was +2.7% QoQ, F/cast is +2.8%)
GDP Growth Rate Q4 (Q3 was +4.9% YoY, F/cast is +5.9%)
Industrial Production Dec (Nov was 7% YoY F/cast is +7.1%)
Retail Sales Dec (Nov was +5% YoY F/cast is 5.1%)
Unemployment Rate Dec (Nov was 5.2% F/cast is 5.2%) not a useful measure as people can only register unemployed in their home city, so excludes migrant workers.
Industrial Capacity Utilisation Dec (Nov was 76.7% F/cast is 76.9%)
Could get FDI data.
China has unveiled a draft bill designed to strengthen control of rare earths, vital to the production of high-tech goods such as hybrid cars and mobile phones, officials have said. The draft bill, released to the public on Friday, said the Chinese government will manage the process from mining to exports of rare earths as a national strategy, as tensions with the United States have been escalating over state-of-the-art technologies.
Brazilian health regulator Anvisa on Sunday approved emergency use of COVID-19 vaccines from China’s Sinovac Biotech Ltd and Britain’s AstraZeneca, clearing the way for immunizations as the pandemic enters a deadly second wave.
Brazil's government will not seek to bar Chinese telecom equipment maker Huawei Technologies from 5G network auctions slated for June this year, newspaper Estado de S. Paulo reported, citing government and industry sources.
China promised on Saturday to donate 500,000 COVID-19 vaccine doses to the Philippines as the two countries signed infrastructure deals aimed at boosting post-pandemic recovery efforts, officials said.

HONG KONG  ADR’s -152pts at 28,421 with most ADR’s in the red.
No data due HK reported 55 confirmed cases Sunday (vs 50 Saturday) with 51 local cases.
SHORT SELLING  Friday 15.2% vs 14.2% Thursday
Top Shorts: Henderson Land (12) 40%, Ping An (2318) 37%, Hengan (1044) 36%, Bud APAC (1876) 35%, hang Lung Ppty (101) 32%,  Hang Seng Bank (11) 32%, HK & China Gas (3) 31%, Wharf REIC (1997) 28%, MTRC (66) 28%,  BankComm (3328) 26%, CK Asset (1113) 25%.
The Union for New Civil Servants, established during the anti-fugitive bill movement, has been disbanded, saying some executives may no longer be able to stay in the government.  The announcement on Saturday came a day after the government issued a notice requiring all civil servants to sign the declaration, adding that refusing to sign or ignoring the requirement might result in termination from the civil service.
The Bauhinia Party has been established in HK led by business executives who moved to Hong Kong from the mainland.  It offers Beijing as a new model for allies, ones who are more overt about their ties to the central government and their admiration for its top-down approach.
Q TECH (01478.HK) POSITIVE PROFIT ALERT, expecting that the consolidated profit attributable to the Shareholders for the year ended 31 December 2020 may increase by approximately 40% to 60% as compared to the consolidated profit attributable to the Shareholders of RMB542 million for the year ended 31 December 2019.
KINGDEE INT'L (00268.HK) PROFIT WARNING, expecting loss of RMB250 million to RMB350 million for the 12 months ended 31 December 2020 (12 months ended 31 December 2019: profit of approximately RMB370 million).
Giordano International (0709) PROFIT WARNING  it expects to record an annual net loss of between HK$110 million and HK$130 million in 2020, as compared with a profit of HK$230 million in 2019.
Wheelock  Properties Monaco in Kai Tak yesterday reported receiveing 3,727 checks for the 145 units - an oversubscription of nearly 25 times. All the units were sold +VE
Nan Fung Group's LP10 in Lohas Park received about 2,300 checks for the 179 units on the first price list  as of 7pm last night. That meant an oversubscription of about 12 times. +VE
Vanke Property (Hong Kong)  In Cheung Sha Wan, released 63 units on the seventh price list of The Campton.Centaline Property Agency recorded 24 transactions at 10 blue-chip housing estates over the weekend.
Fiat Chrysler Automobiles and PSA Group, which merged to create an auto giant, is in talks with China's Chery Automobile and Guangzhou Automobile (2238) to create a joint venture, local media firm Yicai reported.
BYD COMPANY (01211.HK)  announced that it has recently received the Approval Regarding the Issuance of Overseas Listed Foreign Shares by BYD Company Limited from the CSRC, approving the Company to issue not more than 183 million additional overseas listed foreign shares with a par value of RMB1 each, all of which are ordinary shares.  The Company can complete the issuance in multiple tranches, and the interval between each tranche shall be not less than three months with an amount not less than 25% of the total approved quota for each tranche.
Shanghai Stock Exchange will include JD HEALTH (06618.HK) and HAIER SMARTHOME (06690.HK) in the Southbound Trading under the Shanghai-Hong Kong Stock Connect, with effect from the next Southbound Trading day.
GEELY AUTO (00175.HK) announced grant of 629 million share options to eligible grantees under the share option scheme at an exercise price of $32.7 per share.
AIR CHINA (00753.HK) announced that the number of passengers carried in 2020 aggregated 68.6915 million, down 40.3% yearly; the total cargo and mail carried was 1.1134 million tonnes, down 22.4%.
CHINA SOUTH AIR (01055.HK) announced that in December 2020, passenger capacity (measured by available seat kilometres (ASK)) of the Group decreased by 23.89% YoY. In terms of cargo operations, in December 2020, cargo capacity (measured by available tonne kilometers (ATK) - Cargo and Mail) decreased by 0.46% YoY.
HKEX (00388.HK) announced the launch of two new stock futures contracts and two new stock option classes of WUXI BIO (02269.HK) and JD HEALTH (06618.HK)  on 25 January 2021.  The Commission Levy of the new stock futures contracts will be waived for the first 6 months upon the commencement of trading.
SINOPEC CORP (00386.HK) announced that the oil and gas production reached 459 million BOE last year, flattish year on year.
CHINA TAIPING (00966.HK) announced that the gross premium income for the period from 1 January 2020 to 31 December 2020 aggregated RMB178.399 billion, up 3.48% yearly.
Feng Qingfeng, vice president of Geely Group and CEO of Group Lotus, stated that Lotus' plant in Wuhan will be completed and commence operation in 2022, upgrading the R&D, manufacturing and supply chain system in full swing and create diversified products. In the coming 3-5 years, Lotus will continue to improve the three-terminal online digital production service system - manufacturing, vehicles and users, and keep enriching the product matrix to meet diversified and personalized customization needs.
SINOMAB BIO-B (03681.HK) announced that the first healthy subject has been successfully dosed in a Phase I clinical trial of SN1011, an innovative third generation Bruton’s tyrosine kinase (BTK) inhibitor, in Shanghai, China.
CCL last printed at 176.52, down 0.9% weekly. 
CCL Mass dipped 0.81% weekly to 179.01,
CCL (small-to-medium flats) sagged 0.85% weekly to 176.47. T
he three key indices softened altogether after two weeks of rally. Second-hand home deals burgeoned significantly in January 2021, which had yet to be reflected in this week's reading, said the research department of Centaline Property.

DOW -0.57%, NDX -0.87%, S&P -0.72%, Russel 2K -1.49%  After a weak open with some initially selling; as Biden’s relief package had no positive surprises and poor economic data with Retail Sales weaker than expected and weak Michigan data. Banks reported earnings that beat but failed to inspire.  Markets then worked better to just below flat at midday before selling down slightly in the PM ahead of the long weekend. Market will be closed Monday.Pfizer -0.1% on news it will reduce covid vaccine deliveries to Europe
Banks weak despite earnings beating forecasts and the release of more than $5bn of provision : JPMorgan Chase -1.8% (Net Income +42% EPS $3.79, Revenue +3.4%) Citigroup -6.9% (Net income -7%, Revenue -11.9%) and Wells Fargo -7.8% (Net income +4.1% but revenue -9.7% missed consensus), AMEX 1.3%
Work from home names: Facebook +2.3%, Apple -1.4%, Amazon -0.7%, Netflix -0.6%,  Disney -1.2%, Zoom Video +0.3%, Alphabet -0.2% and Microsoft -0.2%,
Tech NXP -4.3%, Nvidia -2.6%, Micron -0.7%, AMD -2.8%, Skyworks -3.8%
Re-opening stocks  Boeing -2.7%, Caterpillar -1.4%, Simon Property -2%, Kohl’s -4.3%, Nordstrom -4.7%, Gap -1.5%, United Airlines -5.2%, Carnival -0.6%, Wynn Resorts -2.5%, Chevron -3.6%, Exxon Mobil -4.8% on news the US SEC launched an investigation, following a whistle-blower’s complaint that it overvalued a key asset in the prolific Permian shale oil basin.  
Lock down names Campbell Soup +1.2% General Mills +0.9%, JM Smucker +1.4%
Retail Sales Dec -0.7% MoM vs -1.4% Nov (revised from -1.1%) (F/cast was -0.2%)
Retail Sales Dec 2.9% YoY vs +3.7% Nov (revised from +4.1%) (F/cast was +3.6%)
Retail Sales Ex Auto Dec -1.4% MoM vs -1.3% Nov (revised from -0.9%) (F/cast was -0.1%)
PPI Dec +0.3% MoM vs +0.1% Nov (F/cast was+0.2% )
PPI Dec +0.8% YoY vs +0.8% Nov (F/cast was +0.6%)
Core PPI Dec +0.1% MoM vs +0.1% Nov (F/cast was +0.1%
NY Empire State Manufacturing Index Jan 3.5 vs 4.9 Dec (F/cast was 5.9)
Industrial Production Dec -3.6% YoY vs -5.4% Nov (revised from -5.5%) (F/cast was -4.6%)
Industrial Production Dec +1.6% MoM vs +0.5% Nov (revised from +0.4%) (F/cast was +0.2%)
Capacity Utilisation Dec 74.5% vs 73.4% Nov (revised from 73.3%) (F/cast was 73.4%)
Manufacturing Production Dec -2.8% YoY vs -3.5% Nov ((revised from -3.7%) (F/cast was -3.4%)
Manufacturing Production Dec +0.9% MoM vs +0.8% Nov (F/cast was +0.4%)
Business Inventories Dec +0.5% MoM vs +0.7% Nov (F/cast was +0.3%)
Michigan Data Prelim
Current Conditions Jan 87.7 vs 90 Dec (F/cast was 88)
Consumer Sentiment Jan 79.2 vs 80.7 Dec (F/cast was 79.2)
Inflation Expectations Jan 3% vs 2.5% Dec (F/cast was 2.1%)
Consumer Expectations Jan 73.8 vs 74.6 Dec (F/cast was 75.1)
5 year Inflation Expectations Jan 2.7% vs 2.5% Dec (F/cast was 2.3%)
Baker Hughes Oil Rig Count 287 vs 275 prior
Baker Hughes Total Rig Count 373 vs 360 prior
USD was slightly stronger vs Yen & Euro. Bitcoin +0.8% @ 6,292.25, VIX +4.6% @ 24.34, US T10 @ 1.087% as US retail sales miss forecasts
OIL Brent -2.3%, WTI -2.3% as lockdowns in China likely to hurt demand.
Gold-1.3%, Silver -3.8%, Copper -1.7%
AHEAD No data due as Markets closed for Matin Luther King Jr day

DAX -1.44%, CAC -1.22%, FTSE -0.97%  Open lower and trading sideways following Asia as Biden’s stimulus plan contained no real surprises and prompted a ’sell the news’ response. Covid resurgence in China with lockdowns there raising concerns about the global recovery.
Basic Resources, Petrochems and most sectors except Healthcare weak. French data in line but UK data was largely better than forecast. Italian government coalition partner withdraws support and the Dutch Govt resigned en mass following a scandal over the mismanagement of Childcare funds.
Siemens Energy -6.3% after General Electric -2.8% filed a U.S. lawsuit alleging that one of its subsidiaries used stolen trade secrets to rig a contract bid.
Carrefour -2.9% after the French government on Thursday voiced opposition to the takeover of Europe’s largest retailer by Canada’s Alimentation Couche-Tard +4.7%
AVEVA Group +7% after a positive trading update.
On Saturday Fiat Chrysler and PSA sealed their long-awaited merger on Saturday to create Stellantis, the world's fourth-largest auto group with deep enough pockets to fund the shift to electric driving and take on bigger rivals Toyota and Volkswagen.
UK announced shutting down all travel corridors from Midnight Monday.
Balance of Trade Nov Euro 25.8b vs 30b Oct (F/cast was 25b)
Two day congress of the CDU started Friday and selected Armin Laschet to succeed Merkel in leading the part
Inflation Rate Final Dec 0% YoY vs +0.2% Nov (F/cast was 0%)
Inflation Rate Final Dec +0.2% MoM vs +0.2% Nov (F/cast was +0.2%)
Budget Balance Nov Euro -176.85b vs -159.85b (F/cast was -166b)
Balance of Trade Nov GBP -5b vs -2.3b Oct revised (F/cast was -1.2b)
GDP Nov -8.9% YoY vs -6.8% Oct revised (F/cast was -12%)
GDP Nov -2.6% MoM vs -0.6% Oct revised (F/cast was -4.6%)
GDP 3 Month Average Nov +4.1% vs 10.5% Revised (F/cast was +2.9%)
Industrial Production Nov -4.7% YoY vs -5.8% Oct revised (F/cast was -4.4%)Industrial Production Nov -0.1% MoM vs +1.1% Oct revised (F/cast was +0.3%)
Manufacturing Production Nov -3.8% YoY vs -6.1% Oct revised (F/cast was -5.6%)
Manufacturing Production Nov +0.7% MoM vs +1.6% Oct revised (F/cast was +0.5%)
Construction Output Nov -1.4% vs -2.2% revised (F/cast was -10%)
Goods Trade Balance Nov GBP -16.012b vs -13b Oct revised (F/cast was -10.2b)
NIESR Monthly GDP Tracker Dec +0.9% vs +4.1% Nov (F/cast was -2%)
EUROZONE No data due
GERMANY No data due
FRANCE No data due
UK No data due

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