Asia market update: Equity markets begin 2024 mixed; Japan closed for holiday; USD generally rises, UST FUTs decline post holiday.

General trend

– China PMI data was mixed.

– Banks lag in Shanghai, Industrial Bank drops; Property, IT and Consumer firms also move lower [Moutai results in focus].

– Japanese companies react to earthquake.

– Japan markets to return from holiday on Jan 4th (Thurs).

– AU government bond yields rise.

– AUD outperforms.
[Reminder for South Korea] to allow qualifying foreign companies to participate in the onshore FX market from 2024.; Plans to extend onshore trading hours until 2 am local time.

-Quiet session seen for US equity FUTs.

-Tesla to release quarterly delivery figures on Tues.

-Energy index outperforms in Australia, REITs lag.

-Crude Oil FUTs rise [Maersk: US Pentagon confirms Maersk Hangzhou container ship struck by missile in Red Sea; US destroyers shut down two more missiles (from Dec 31st); Maersk to pause all sailings through the Red Sea for 48 hours from Dec 31st].

Headlines/economic data

Australia/New Zealand

-ASX 200 opens flat at 7,589.

-Australia Dec Final PMI Manufacturing: 47.6 v 47.8 prelim (confirms 10th month of contraction).

-Australia Dec Corelogic House Price Index M/M: 0.4% v 0.6% prior.

China/Hong Kong

– Hang Seng opens +0.5% at 17,135.

– Shanghai Composite opens -0.1% at 2,972.

– China Dec CAIXIN PMI manufacturing: 50.8 V 50.3E [2nd month of expansion; highest since Aug]; The subindexes for output and total new orders reached new highs since May and February; But overseas purchasing power remained limited.

– China Dec manufacturing PMI (Govt official): 49.0 V 49.6E (3rd month of contraction and 6-month low); Non-Manufacturing PMI: 50.4 v 50.5e (12th month of expansion) [from Dec 31st].

– China Pres Xi: Expect China 2023 GDP to exceed CNY126T; We should resolutely safeguard the interests of national sovereignty, security and development.

– Macau Dec Casino Rev Y/Y: +433.3% v +402.0%e; Jan-Dec Casino Rev +333.8% y/y.

– China New Year Holiday Domestic trips +155% y/y – Xinhua.

– Kweichow Moutai: Reports prelim FY23 (CNY) Net 73.5B, Rev 149.5B.

– Industrial Bank [601166.CN]: Shares to open down by 8%.

– JD.com: Said to have won monopoly lawsuit against Alibaba; JD to receive CNY1.0B in compensation – press.

– China said to issue ~179.0Mts of crude oil import quotas for 2024 v ~111.8Mts y/y – Press.

– China approves two nuclear power projects – press.

– China PBOC Open Market Operation (OMO): Sells CNY137B in 7-day reverse repos; Net drains CNY869B v CNY155B prior.

– China PBOC sets Yuan reference rate: 7.0770 v 7.0827 prior [strongest CNY fix since May 29th 2023].

– China to adjust currency weighting in CFETS RMB Index; To cut US dollar and weightings; effective Jan 1st 2024 – financial press [To cut USD weighting from 19.83% to 19.46%; To cut Euro weighting from 18.20% to 18.08%].

– China National People’s Congress (NPC) to begin its annual session on March 5th – financial press.

– China appoints former Navy chief Dong Jun as its new Defense Min – press.

Japan

-Nikkei 225 closed for holiday.

-7.6 magnitude earthquake reported off west coast of Japan; Japan dropped its highest-level tsunami alert hours after; all tsunami warnings were later lifted [from Jan 1st].

-Japan PM Kishida: Damage from earthquake appears to be widespread; Large-scale damage has been confirmed from earthquake.

-Hokuriku Electric Power [9505.JP]: Says Shika nuclear plant has secured functioning [follows earthquake].

Korea

-Kospi opens -0.4% at 2,645.

–Samsung Electronics: Said to guide 2024 chip unit Op KRW11.5T; notes rebound in DRAM prices, AI-related demand – South Korea press [The co. is estimated to have a 2023 chip unit Op loss of KRW13.0T.].

-South Korea said to consider expansion of bond market stabilization fund to KRW30T from KRW20T – South Korea press.

– Tier 1 US Bank: Some South Korea non-bank lenders at risk of insolvency – Press.

-KEPCO [015760.KR]: Shin Hanul Number 1 nuclear reactor said to halt unexpectedly – Press.

-South Korea Dec PMI Manufacturing: 49.9 v 50.0 prior; Prior to November conditions had deteriorated for 16 straight months.

– South Korea President Yoon: Domestic equity market is ‘undervalued’ – South Korea press.

-South Korea to seek to end the financial investment income tax – South Korea press.

-South Korea opposition leader Lee attacked in Busan – South Korea press.

Other Asia

-India raises windfall tax on domestic crude oil – press.

-Singapore Q4 Advance GDP Q/Q: 1.7% v 0.7%e [fastest growth since Q3 2022]; Y/Y: 2.8% v 1.8%e.

-Monetary Authority of Singapore (MAS): To review monetary policy on Jan 29th (Mon).

– Taiwan Dec PMI Manufacturing: 47.1 v 48.3 prior [19th month of contraction]; The rate of decline was the quickest seen since September and solid.

-Thailand Dec PMI Manufacturing: 45.1 v 48.3 prior [5th month of contraction, 42-month low].

North America

-JOYY [YY]: Received a written notice (the “Notice”) from an affiliate of Baidu, Inc. (“Baidu”) purporting to terminate the Share Purchase Agreement.

Europe

– Maersk: US Pentagon confirms Maersk Hangzhou container ship struck by missile in Red Sea; US destroyers shut down two more missiles [from Dec 31st]; Maersk to pause all sailings through the Red Sea for 48 hours from Dec 31st.

– ASML: Says shipment license partially revoked by the Netherlands government; reiterates the license revocation will not impact financial outlook; The revocation impacts a ‘small’ number of China customers.

– ASML: US government said to have pushed the co. to block China sales before the Jan 2024 deadline – press.

– (UK) Dec BRC Shop Price Index Y/Y: 4.3% v 4.3% prior.

– Ireland Dec PMI Manufacturing: 48.9 v 50.0 prior.

– Israeli military official: Thousands of Israeli soldiers are being shifted out of the Gaza Strip [**Note: the first significant drawdown of troops since the war began].

– Nokia: Expects that it will not achieve its 2023 financial outlook as licensing renewal discussions are expected to continue into 2024.

Levels as of 00:20 ET

– Nikkei 225, closed, ASX 200 +0.5% , Hang Seng -1.5%; Shanghai Composite -0.2% ; Kospi +0.7%.

– Equity S&P500 Futures: +0.1%; Nasdaq100 -0.1%, Dax +0.2%; FTSE100 +0.2%.

– EUR 1.1045-1.1016 ; JPY 141.67-140.81 ; AUD 0.6828-0.6802 ;NZD 0.6337-0.6293.

– Gold +0.4% at $ 2,080/oz; Crude Oil +1.7% at $72.84/brl; Copper +0.2% at $3.9010/lb.