Morning Report APAC: Market heads for safe havens
- USD falls across the board as local markets react to Trump's first speech
- Gold and JPY on the rise, with US and Australian government bonds
- JPY rises 0.7% to 113.84 to the dollar in early Tokyo trade
- Gold rises 0.4% to $1,214.96/oz in early Asian trade
By Saxo APAC Sales Trading
Economic data of the day (Singapore Time)
1730: EU – ECB’s Draghi speaks in Torino, Italy
2115: EU – ECB’s Praet speaks in Brussels
US: President Donald Trump's inauguration speech was in line with the protectionist policies he wants to implement: “We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs".
"Protection will lead to great prosperity and strength. I will fight for you with every breath in my body and I will never ever let you down."
The British prime minister will visit Washington on January 27, seven days after Trump has taken office. Her stated goal is to engage the new president on questions about the future of the North Atlantic Treaty Organization and Syria’s civil war.
Her most important task is to nail down details of what a US-UK trade deal would cover.
USD is slightly offered since Trump’s speech - but nothing huge. The macro players are still looking to buy USD but the US yields are still stuck in a range and would be a move up before the USD trend continues.
USDJPY should continue to move lower in the short term as the positioning is the heaviest on the long side and the expectation from the Macro funds was a huge move higher quickly.
Emerging Markets: USD sold off against most currencies and USDBRL broke the 3.2000 support on strong equity inflows.
USD/Asia followed the move, like USDKRW on bond and equity inflows despite the political turmoil there. USDMXN managed to trade lower after Trump’s speech with 22.000 now becoming a strong resistance level.
Foreign exchange movements
US Treasuries were mostly higher on seeking safe-haven, erasing declines that saw the 10- year yield as high as 2.511% before yields retreated shortly after Trump’s inauguration.
German front end remains under pressure since the European Central Bank clarified its position on purchases below depo floor, while supply pressures continued in France ahead of expected green bond supply next week, with long-end OATs underperforming bunds by around 1 basis point across the 10-30 year sector.
US stocks ended higher Friday as Trump presidency commenced, but both Dow & S&P 500 logged their second straight weekly decline on concerns about the new administration.
IBM rallied 2.2% a day after the tech giant reported adjusted better-than-expected quarterly profit of $5.01 per share.
While the company posted a 33% increase in its cloud business, as it continues its transition away from its older businesses, its revenue has fallen for the 19th consecutive quarter.
General Electric fell 2.2% after the conglomerate’s quarterly revenue drop was larger than expected, while Procter & Gamble Co. gained 3.3% after better-than-anticipated earnings.
Bristol-Myers Squibb tumbled 11% after the pharmaceutical company said it wouldn’t pursue accelerated approval for a lung cancer combination treatment.
Skyworks Solutions Inc jumped 13% after the chip supplier to Apple Inc. (+0.18%) posted better-than-expected quarterly results, while also unveiling a $500 million stock-repurchase program.
- Hang Lung Properties (101 HK): Cut to neutral at Macquarie
- Uni-President China (220 HK) raised to buy at Mizuho
- HK regulator scolds GEM smallcap market over practices
- Coal: China Railway Corp signs pact on coal transportation: Xinhua
- Developers: China personal mortgage growth declined slightly in Dec.: PBOC; H.K. existing home prices fall 0.08% on week: Centaline; China 4Q real estate services output rises 7.7%
- Environmental: China to push development of water conservation industry: NDRC
- Oil, gas: Xinjiang to open 30 oil, gas blocks for tender: Xinhua; CNPC oil output 105m metric tons in 2016: People’s Daily
- Internet: China sets up 100b yuan internet investment fund: Xinhua
- Refiners: Teapots reduce operating rates for third week
- Bank of Qingdao (3866 HK): To raise up to 14.5b yuan
- Cheung Kong Property (1113 HK): HK$1.22b in buybacks this wk
- China Coal (1898 HK): Sees FY net of up to 2.2b yuan vs loss
- China Cosco Shipping (1919 HK): Didn’t bid for Orient Overseas (316 HK)
- China Oilfield (2883 HK): Files second Norway civil action against Statoil
- Cosco Shipping (1919 HK): Buy Qingdao Port stock for 5.8b yuan
- Chow Sang Sang (116 HK): Expects 2016 profit to drop 30%-40%
- Nifco (7988): Downgraded to neutral from outperform at Credit Suisse
- Fanuc (6954): Raised to outperform from neutral at Daiwa
- Topre (5975): Cut to neutral from outperform at Credit Suisse
- Lixil (5938): Raised to outperform from neutral at Credit Suisse
- Aderans (8170): To be delisted after management buyout
- Dowa (5714): Full-year operating profit 32b yen, Nikkei says; co. guidance 29b yen, Bloomberg est. 30.4b yen
- en-japan (4849): Rated new buy at Jefferies with a price target of 2,600 yen
- Fukuoka Financial Group (8354): Says merger between its unit Shinwa Bank and Eighteenth Bank (8396) delayed due to prolonged vetting by Japan Fair Trade Commission
- Hitachi (6501): Chairman says M&A to remain key element of growth plans; Brexit not an immediate concern
- Jafco (8595): Operaing profit for 9 months ended Dec. dips 49% to 9.57b yen
- Japan Tobacco (2914): Dec. cigarette sales volume slips 3.6% y/y
- Kirin Holdings (2503): Heineken says it is in talks with co. for buying Brasil Kirin Holding, confirming earlier Nikkei report
- Mitsubishi Heavy (7011): Sees Trump’s infrastructure plans as opportunity
- Mitsubishi Motors (7211): To exit high-end sedans, Nikkei says
- Mizuho (8411): Considering cities in Europe as potential locations for securities unit if Brexit impact “heavy”
- Nagatanien Holdings (2899): Scraps plans to form Chinese venture to focus on EU, U.S. operations
- Nippon Suisan (1332): Corrects earnings back to 2011; no changes to current forecasts
- Ono Pharma (4528): Merck agrees to pay $625m plus royalties to co. and Bristol-Myers to settle patent suits over cancer drug Keytruda
- Ryohin Keikaku (7453): To set up JV with SSI of Philippines
- Sharp (6753): Foxconn ponders $7b investment in U.S. display plant, Reuters reports
- Syuppin (3179): Deutsche Bank units cut stake in co. to 4.36% from 5.43%
- Takata (7312): TSE says it will loosen the lower limit on the stock if no trades are conducted on Jan. 23
- Tokyo Steel Manufacturing (5423): Parent co. operating profit for 9 months ended Dec. falls 39% to 8.4b yen
- TonenGeneral (5012): Wakayama refinery operating at reduced rates after fire Sunday
- Toshiba (6502): To raise 500b yen to cover nuclear writedown, including sale of 20% stake in chip business Asahi reports; Canon (7751) to consider investing in chip business, Kyodo reports; Silver Lake, KKR may also bid for chip ops, Nikkei says; Captial Research raises stake in Toshiba to 7.11% from 5.93%; cut to hold from buy at Deutsche Bank
- TSI Holdings (3608): To sell land in Kanagawa to Daiwa House REIT Investment (8984), expects to book 2.34b yen gain
- ANZ Bank Cut to Neutral at Citi, PT A$31.50
- Citi Turns Bearish on Aussie Banks, Cuts CBA, Westpac and ANZ
- Horizon Oil Cut to Neutral at UBS, PT A$0.07
- Asaleo Care Cut to Neutral at Citi, PT A$1.50
- Sims Metal Cut to Neutral at Citi, PT A$13.70
- CBA Cut to Sell at Citi, PT A$75
- Alacer Gold cut to neutral at Macquarie; PT A$2.40
- Regis Resources Cut to Neutral at Macquarie, PT A$3
- South32 Cut to Neutral at Evans and Partners
- CSL Raised to Overweight at JP Morgan
- Abano (ABA NZ) says tracking above financial forecasts for FY17
- Syrah Resources (SYR AU) due to release 4Q development report
- OceanaGold Reports 1st Gold Pour in South Carolina Mine
- Rio Executive Firing Linked to Internal CEO Feud, Says Conde
– Edited by Adam Courtenay
This report was compiled by the Saxo APAC Sales trading team in Singapore – the home of social trading. Follow the team on @SaxoStrats or post your comment below to engage with Saxo Bank's social trading platform. Follow us on @SaxoStrats on Twitter
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