USD/JPY and UST yields rise after Fed speak, month-end also in focus

Asia Market Update: Equity markets generally pare losses amid CN holiday; Some volatility seen; US equity FUTs move between gains and losses; USD/JPY and UST yields rise after Fed speak, month-end also in focus; RBA due tomorrow.

General trend

- AU yields decline ahead of RBA’s decision on bond purchase program [curve steepens].

- China PMI data was mixed; Caixin said it became more evident that China’s economy is straining under the triple pressures of contracting demand, supply shocks and weakening expectations.

- Hang Seng extended gain, HK markets to close early today.

- Jan Macau Casino Revs in focus.

- China holiday in focus: Shanghai to close between Jan 31st and Feb 4th; HK to close Feb 1-3rd.

- Nikkei 225 has extended gains [USD/JPY rises].

- Japanese cos. due to report earnings include TEPCO, Mitsubishi Motors, Kyocera, Komatsu, Shionogi, Hino Motors.

- S&P ASX 200 pared decline [REITs rise ahead of RBA; Energy index also rises].

- WTI Crude FUTs rise over 1% [focal points include Ukraine]; Natural Gas FUTs rise over 7%.

- Companies due to report during the NY morning include L3Harris, Otis Worldwide, Trane Technologies.

Headlines/Economic data

Australia/New Zealand

- ASX 200 opened 0.0%.

- ORG.AU Reports Q2 Total production 60.8 .PJ v 68.3 PJ y/y; Commodity Rev A$2.25B v 1.06B y/y.

- (AU) Australia Jan Melbourne Institute Inflation M/M: 0.4% v 0.2% prior; Y/Y: 3.0% v 2.8% prior.

- FAR.AU Samuel Terry Asset Management notes off-market takeover offer for Far Ltd at A$0.45/shr.

- AMA.AU Gives Q2 update: Business remained significantly COVID-19 affected through much of Q2; Monthly repair volumes were at their lowest level for the 6 months.

- ANN.AU Guides H1 EBIT $111M v $130Me; Rev $1.0B v $1.0Be; cuts FY22 $1.25-1.45 (prior $1.75-1.95).

- (AU) Australia Treasurer Frydenberg: The A$424B of private savings between households and businesses will support the economy as it transitions away from pandemic-era emergency measures – AFR.

- (AU) Australia in its March 29th Federal Budget expected to upgraded labour market forecasts that project the jobless rate on track to fall below 4% in 2022 (prior saw 4.5%) - Aussie press.

Japan

- Nikkei 225 opened -0.1%.

- (JP) JAPAN DEC PRELIMINARY INDUSTRIAL PRODUCTION M/M: -1.0% V -0.6%E; Y/Y: 2.7% V 2.9%E; lowers Jan outlook.

- (JP) JAPAN DEC RETAIL SALES M/M: -1.0% V 0.3%E; Y/Y: 1.4% V 2.8%E.

- 6758.JP "Spider-Man: No Way Home" top movie at the N. American box office with $11.0M in sales ($735.9M to date).

- (JP) Former Bank of Japan (BOJ) official Yamaoka: Against using digital yen, BOJ shouldn’t view the issuing of a digital currency as a monetary policy option as doing so could severely damage the economy.

- (JP) Japan Jan Consumer Confidence: 36.7 v 37.0e (2nd consecutive decline).

- (JP) Japan Dec Annualized Housing Starts: 838K v 854Ke; Y/Y: 4.2% v 8.1%e.

Korea

- Kospi closed for holiday.

- (KR) North Korea fired what appears to be its longest range missile since 2017 earlier this morning (7th launch in January) – press.

- Follow up: North Korea confirmed it test fired Hwasong-12 intermediate-range ballistic missile over the weekend.

China/Hong Kong

- Hang Seng opens +0.3%; Shanghai Composite closed for New Year holidays.

- (CN) CHINA JAN PMI MANUFACTURING (GOVT OFFICIAL): 50.1 V 50.0E.

- (CN) CHINA JAN CAIXIN PMI MANUFACTURING: 49.1 V 50.0E (moves back into contraction, 23 month low).

- 3333.HK Receivers appointed for assets of some China Evergrande Group subsidiaries; no material impact expected; no material impact seen.

- (CN) China outlines 14th 5 year plan for pharmaceutical industry: Avg R&D spending +10%/year.

- (CN) China PBOC: Q4 Property loan growth Y/Y: 7.9% v 7.6% prior.

Other

- (IN) India Central Bank (RBI) comments on Conversion/Switch of Govt of India (GoI)’s Securities: Govt has done a conversion transaction with the Reserve Bank on January 28; bought back securities maturing in FY 2022-23, FY 2023-24 and FY 2024-25 from the Reserve Bank and issuing fresh securities for equivalent market value, to make the transaction cash neutral.

- (SG) Singapore Q4 Business Confidence: 0 v 16 prior (lowest since Q3 2020).

North America

- (US) Fed's Bostic (non-voter, hawk): Reiterates Fed could use quarter point rate increases, holds view of 3 25bps raises in 2022, with the first coming in March, if inflation remains high; every option is on the table for every meeting - FT.

- CTXS Elliott and Vista said to be close to acquiring at $104/shr cash, $13.0B; announcement could be as soon as Monday – press.

Europe

- (PT) Portugal Socialist Party [center-left] won general election with an outright parliamentary majority in snap election (not expected to win outright majority, though expected to win).

- (IT) Italy President Mattarella agrees to serve a 2nd term after coalition parties urged him to reconsider stepping down; Draghi to remain PM.

Levels as of 00:15ET

- Hang Seng +1.2%; Shanghai Composite closed for holiday; Kospi closed for holiday; Nikkei225 +1.1%; ASX 200 -0.2%.

- Equity Futures: S&P500 +0.2%; Nasdaq100 +0.4%, Dax +0.5%; FTSE100 +0.1%.

- EUR 1.1164-1.1139; JPY 115.60-115.22; AUD 0.7017-0.6987; NZD 0.6565-0.6539.

- Commodity Futures: Gold +0.1% at $1,786/oz; Crude Oil +1.1% at $87.77/brl; Copper -0.2% at $4.31/lb.