Dec 16 Asian Macro Initial Thoughts Asian to open slightly higher US Future s flat

16 Dec

Asian Futures Nikkei Futures opened +20pts,  HK ADR’s +103pts and Australia moving higher in early trades.  Apple supply chain names +VE on news it's to ramp up production in 1H 21.  But markets may see some caution into the close ahead of the US FOMC decision due out tonight in the US.

US Futures opened flat Dow +23pts, S&P and NDX slightly higher

DOW +1.13%, NDX +1.25% (new high), S&P +1.29%, Russel 2K +2.4% Markets opened higher but saw an initial dip before working higher through the day. Sentiment helped by covid vaccine being rolled out and the latest stimulus proposal; which splits the package into two bills; one with broad agreement the other the contentious issues. Top congressional leaders to meet at 4pm New York time to try and agree a deal.
FDA committee give approval to Moderna’s vaccine with similar guidance to Pfizers.
Banks JPMorgan Chase +1.75%, Citigroup +1.74% and Wells Fargo +3.8%, AMEX +1.45%
Work from home: Facebook +0.5% initially sold down as EU looks to bring in new regulations,  Apple +5% news that it will ramp up iPhone production by 30% in 1H 21, Amazon +0.3%, Netflix -0.5%, Disney +2.8%,  Zoom Video +0.9%, Alphabet +0.5% and Microsoft unch.
Tech NXP +1%, Nvidia +0.4%, Micron +2.3%, AMD +2.5%, Skyworks +3.9%
Re-opening stocks  Boeing +0.4%, Caterpillar +2.1%, Simon Property +2.8%, Kohl’s +4.5%, Nordstrom +4.7%, Gap +1.7%, United Airlines +1.6%, Carnival +2.9%, Wynn Resorts +6.1%, Chevron -0.1%, Exxon Mobil +1.9%,  
Lock down names Campbell Soup +0.2% General Mills -0.5%, JM Smucker +0.2%
Import Prices Nov -1% YoY vs -1% Oct (F/cast was -0.8%)
Import Prices Nov +0.1% MoM vs -0.1% Oct (F/cast was +0.2%)
Export Prices Nov -1.1% YoY vs -1.6% Oct (F/cast was -1.2%)
Export Prices Nov +0.6% MoM vs +0.2% Oct (F/cast was +0.1%)
NY Empire State Manufacturing Index Dec 4.9 vs 6.3 Nov (F/cast was 5)
Redbook +2.5 YoY vs +2.1% prior [ -2.2 MoM vs -2.4% Prior)
Industrial Production Nov -5.5 YoY vs -5% Oct revised from -5.3% (F/cast was -5%)
Industrial Production Nov +0.4 MoM vs +0.9% Oct revised from +1.1% (F/cast was +0.3%)
Manufacturing Production Nov -3.7% YoY vs -3.5% Oct revised from -3.9% (F/cast was -4%)
Manufacturing Production Nov +0.8% MoM vs +1.1% Oct revised from +1% (F/cast was +0.4%)
Capacity Utilisation Nov 73.3% vs 72.8% Oct (F/cast was 73%)
IBD/TIPP Economic Optimism Dec 49 vs 50 Nov (F/cast was 53)
Foreign Bond Investment Oct $-20.1b vs +22.5b Sept
Net Long Term Tic Flows Oct $51.9b vs +108.9b Sept
Overall Net Capital Flows Oct $-10.4b vs -80.5b Sept revised from -79.9b
API Crude Oil Stock Change +1.973m vs +1.141m prior (Consensus was -3.5m)
USD was weaker vs Yen & Euro. Bitcoin +0.8% @ 19,475, VIX -7.4% @ 22.89, US T10 @ 0.911%
OIL Brent +0.89%, WTI +1.3%
Gold +1.4%, Silver +2.5%, Copper +0.5%
AHEAD MBA Mortgage Applications and 30 yr Mortgage Rate, Retail Sales data, PMI Flash Data (Manufacturing, Services and Composite), Business Inventories, NAHB Housing Market Index, EIA Oil report, FOMC Interest Rate Decision and Press Conference.

DAX +1.06%, CAC +0.05%, FTSE -0.28%  Opened lower but worked higher in early trades. FTES sold down from 10am into the red as London now at the highest social distancing level, CAC trended lower but found support at Monday’s closing level but DAX trended higher despite the approach of lock-down tomorrow. Netherlands also tightening.Brexit and Covid remain in focus.
UK’s new testing programme for travellers was overwhelmed within hours -VE fro Travel.
Volkswagen +7.6% as CEO got unanimous board support following a reported power struggle with the labour boss.
Software ONE +6.7% expanding leadership team
Umicore +6.6% after upgrading its guidance.
FRANCE Inflation Rate Nov +0.2% YoY vs 0% Oct (F/cast +0.2%)Inflation Rate Nov +0.2% MoM vs 0% Oct (F/cast +0.2%)IEA Oil Report
UK Claimant Count Changes Nov +64.3k vs -29.8% Oct (F/cast was +30k)Employment Change Sept -144k vs -164k Aug (F/cast was -200k)Average Earnings ex bonus Oct +2.8% vs +1.9% Sept (F/cast was +2.3%)Average Earnings inc bonus Oct +2.7% vs +1.4% Sept revised (F/cast was +2%)Unemployment Rate Oct +4.9% vs +4.8% Sept (F/cast was 5%)
EUROZONE PMI Flash Data (Manufacturing, Services and Composite), Balance of Trade, Construction Output, Labour Cost Index, Wage Growth
GERMANY PMI Flash Data (Manufacturing, Services and Composite)
FRANCE PMI Flash Data (Manufacturing, Services and Composite)
UK PMI Flash Data (Manufacturing, Services and Composite)

JAPAN Nikkei futures opened +20pts expect a flat open and initial trading to be driven by the Pre market data.  Yen currently 103.64. Apple related names to see interest on news of a ramp up in production
Data due Balance of Trade (F/cast Y510bn), Exports (F/cast +0.5%) Imports (F/cast -12%) and Flash PMI Manufacturing (F/cast 50), Services (F/cast 48.5) Composite (F/cast 49)
Tokyo reported 460 new covid cases on Tuesday vs 305 Monday and the national number was 2,417 new cases in total.
Cabinet approved Yen 21.84tn third supplementary budget for fiscal 2020 +VE
Tourism ministry said Tuesday it will expand compensation for travel businesses to further help them weather the fallout of the coronavirus pandemic, following the government's abrupt decision to suspend a domestic travel subsidy program nationwide amid a surge in coronavirus cases. Slight +VE
Survey shows that only 27% of people surveyed supported holding the Olympics, preferring either a further delay or its cancellation.
Japan is seeking to strengthen ties with the United States and work closely toward realizing its vision of a free and open Indo-Pacific region, Chief Cabinet Secretary Katsunobu Kato said Tuesday, after Joe Biden's win in the Nov 3 presidential election was affirmed.
SBI Financial Services, a subsidiary of SBI Holdings Inc, has acquired UK-based B2C2 cryptocurrency trading firm and will become the first major financial group to run a digital asset dealing desk, the companies said on Tuesday.
NTT Corp. plans to make NTT Docomo Inc. its wholly owned subsidiary this month, part of its launch of a new group structure. With American and Chinese firms dominating the global telecommunications industry, NTT believes it can build up its presence through its first reorganization in 28 years.
Nissan currently reviewing its business structure a year after Makoto Uchida became President and CEO.
The Japan Business Federation, or Keidanren, plans to call on member companies to raise wages in line with individual workers’ roles and performance instead of doing so across the board, sources said Tuesday. They also emphasize that companies seeing major downturns in earnings due to the coronavirus crisis should “prioritize business continuity and employment protection” in discussions with the labor side.  The moves will be incorporated into the guidelines for next year’s shuntō spring wage talks.

SOUTH KOREA Expect markets to open higher with Tech heavyweight names leading along with Apple related names.  Upside may be muted by covid cases hitting a new high.
Data Out
Export Price Nov -4.9% vs -6.2% Oct revised from -6.4%
Import Prices Nov -10.6% vs -11.2% Oct revised from -11.6%
Due at 7am HK time Unemployment F/cast +3.7%
Govt announced 880 new covid cases to midnight Monday (vs 718 cases to Sunday midnight)  bed shortages are now an issue. -VE for sentiment.
Renewable energy will take up nearly 42% of South Korea’s power generation capacity by 2034, according to a blueprint for the national energy mix unveiled Tuesday.+VE Renewables but -VE for Nuclear and Coal.
Doosan Infracore; Sales of excavators in China are expected to reach the highest in a decade this year on strong demand in the world's No. 2 economy, industry data showed Tuesday.  According to the data by the China Construction Machinery Association, Doosan Infracore sold 1,692 units of excavators in November in China.  In the January-November period, the construction equipment makers' excavator sales in China came to 17,458 units. +VE for Doosan and also re-inforces the expectation that infrastructure plays in China should do well.
Hyundai Motor Group on Tuesday named the new chief for its flagship automaker unit; Chang Jae-hoon, who until recently served as executive vice president for Hyundai Motor’s domestic sales business and its prestige brand Genesis. It also promoted key leaders in future mobility sectors to affiliates’ top posts. The latest personnel reshuffle, marking the first of the kind since Chung Euisun was promoted to the group chairman position  Slight +VE
Doosan GridTech, a US subsidiary of Doosan Heavy Industries & Construction, won a contract worth 100 billion won ($91.3 million) to install energy storage systems (ESS) in Australia, the biggest ESS contract Doosan has ever signed. +VE
South Korea's exports of information and telecommunication products surged 15.8% YoY in November, extending their rise for the sixth consecutive month, data showed Tuesday, on the back of robust overseas demand for memory chips and display products amid the pandemic.

TAIWAN Expect market to open higher with Apple related names +VE 
No data due 
Taiwan launched its ‘carrier killer’ corvette as it strengthens defences against mainland China attack.  The Ta Jiang is armed with anti-ship missiles and stealth technology that will allow it take out much larger vessels.  The domestically produced warship, along with a new high-speed minelayer, are part of a programme to develop the island’s asymmetric warfare capacity
Wistron Corp said yesterday in a filing with the Taiwan Stock Exchange that damage to its iPhone factory in the Indian state of Karnatakaia is much less than has been reported +V
EA power outage at one of Nippon Electric Glass Co’s (NEG) fabs last week would lead to a further increase in prices of flat panels used in televisions, monitors and PCs through next quarter, market researcher TrendForce Corp said yesterday. The company’s manufacturing equipment was damaged during the five-hour shutdown on Thursday, NEG said in a statement on its Web site, adding that it is trying to restore production as soon as possible.
Tong Yang Industry  which manufactures bumpers and automotive sheet metal products, yesterday said that pretax profit increased 11% to NT$107 million last month from NT$96.2 million in October on improved foreign-exchange losses, marking its third straight month of growth. On an annual basis, pretax profit plunged 66.8 percent, mostly due to a lack of air cargo and shipping containers, and surging transportation costs.
China Airlines Ltd and EVA Airways Corp yesterday said that they are ready and willing to transport COVID-19 vaccines, although they had not received assignments from the government.
Survey showed that expected annual bonuses hit nine-year low: Only 55.9% of employees surveyed expect year-end bonuses, -67.8% YoY and the lowest in the poll’s history, job bank yes123 said.  Employers expect to issue year-end bonuses equivalent to 1.11 months of wages on average, the lowest in nine years,  -VE for sentiment.            

CHINA Expect market to open flat after yesterday’s rally in the PM.
No data due but may get FDI (YTD)
China suspends top credit rating agency as defaults hit market. Regulator says Golden Credit failed to justify some of its ratings and upgrades.  This will cause further concerns in China’s bond market about the validity of the data currently available. China ordered the agency to “immediately carry out a comprehensive rectification . . . strengthen internal controls and compliance management, strictly police business practices and improve the quality of ratings” .-VE for Banks and sentiment.
China's hog production is expected to fully recover in the first half of 2021, said the Ministry of Agriculture and Rural Affairs, state media Xinhua reports. By the end of November, the inventory of live pigs and breeding sows has reached over 90 percent of the levels seen in normal years, the ministry said.  The breeding sows in stock expanded to over 41 million, while that of live hogs surpassed 400 million during the period. +VE
China-Australia relations -VE over reports of ‘discriminatory’ coal ban.  Canberra is trying to verify Chinese media reports that Beijing has directed power plants not to import Australian coal. Australian Trade minister Simon Birmingham says, if true, the action could constitute a ‘breach of China’s commitments’ at World Trade Organization
Brazil’s health regulator Anvisa said on Monday China’s health authorities are not transparent in their authorization of COVID-19 vaccines for emergency use, a statement that may further inflame political tension in the South American country.
British Prime Minister Boris Johnson has invited India, South Korea and Australia to the Group of Seven summit meeting next year, as the US and Europe seek to build a wider alliance against China’s growing power. -VE for sentiment

HONG KONG  ADR’s +103pts at 26,310 but with weakness in the Telco’s, CCB and BoC.  Expect some initial short covering but shorts have been running light recently.  Apple names +VE  Ecommerce likely to give support too.No data due
IPO  BLUE MOON GROUP (06993.HK),debut , closed at $15.32 in grey market, up 16.4% or $2.16 against the listing price of $13.16, on volume of 38.5 million shares and turnover of $579 million, PhillipMart data showed. Excluding handling fee, the book gain was $1,080 per board lot size of 500 shares.
AOYUAN HEALTHY (03662.HK) announced that Lei Yiqun, executive vice president of the Group and general manager of commercial management, increased 488,000 shares on the market Tuesday, involving $2.342 million.
HKEX (00388.HK) announced that it will include JD HEALTH (06618.HK) into the Volatility Control Mechanism (VCM) Securities list with a triggering threshold of +/- 10%, effective 22 December.
MCC (01618.HK) (601618.SH)   announced that the value of newly signed contracts from January to November in 2020 amounted to RMB894.25 billion, representing an increase of 36.2% from the same period of last year.
COSCO SHIP PORT (01199.HK) throughput reached 8.956 million tonnes, +2% yearly, in November 2020.
TENCENT (00700.HK) has officially upgraded its culture and tourism cloud, while launching the "WeRoad Tencent Digital Cloud Platform", announced Zhang Yaohui, Vice President for the giant's culture and tourism products.  The platform will be conducive to culture and tourism sector buildout leveraging digital technology in the fields of product capability, solutions and ecosystem.
BABA-SW (09988.HK)  and CATL (300750.SZ) partook in the latest funding round of SAIC Mobility, the auto-sharing subsidiary of SAIC MOTOR (600104.SH) , involving RMB300 million in total, reported foreign media.

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