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Asian Indices Trade Generally Higher after US Gains

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Fundamental analysis of Forex market

Asia Market Update: Asian indices trade generally higher after US gains; Hang Seng rises over 1% after return from 2 day holiday; Shanghai rises amid improvement in China’s industrial profits

General Trend:

  • Shanghai Composite Industrial index outperforms on industrial profits data; Banks rise as China’s 10-year government bond yield moved higher
  • Chinese liquor maker Kweichow Moutai rises over 3%, sees higher sales volumes in 2020
  • Hang Seng Property index rises, tracks recent gains in Shanghai; China recently announced plans to ease guidelines related to household registration limits in certain cities
  • Resource and financial firms lead gains in Australia
  • Japanese equities underperform; Fast Retailing is among the decliners on the Nikkei
  • Japan Display rises over 6%, said to be in talks to sell display plant to Apple and Sharp
  • South Korea’s Kospi opened lower amid ex-dividend impact, shares later rebounded
  • China’s industrial profits rose in Nov at fastest pace in 8 months [prior data was the largest y/y decline since 2011]
  • Japan’s NHK incorrectly reported that North Korea had launched a missile (from Dec 26th)

Headlines/Economic Data

Australia/New Zealand

  • ASX 200 opened +0.1%

China/Hong Kong

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  • Hang Seng opened +0.6%, Shanghai Composite flat
  • (CN) China is said to be carefully trying to ensure that trade deal with the US will be in line with global trade rules and does not hurt relations with other trading partners (including Russia, EU and Brazil) – SCMP
  • (CN) China Nov Industrial Profits Y/Y: +5.4% v -9.9% prior (first rise since July, fastest increase in 8 months)
  • (CN) China PBoC Open Market Operation (OMO): Skips reverse repos for the 4th consecutive session; Net drain CNY0B v drain CNY30B prior
  • (CN) China PBOC sets Yuan Reference Rate: 6.9879 v 6.9801 prior

Japan

  • Nikkei 225 opened +0.1%
  • (JP) Japan Nov Preliminary Industrial Production M/M: -0.9% v -1.0%e; Y/Y: -8.1% v -8.1%e
  • (JP) Japan Nov Retail Sales M/M: 4.5% v +5.0%e; Y/Y: -2.1% v -1.7%e
  • (JP) Japan Dec Tokyo CPI Y/Y: 0.9% v 0.9%e; CPI Ex-Fresh Food Y/Y: 0.8% v 0.6%e
  • (JP) Japan Nov Jobless Rate: 2.2% v 2.4%e (matches 27-year low)
  • (JP) Bank of Japan (BOJ) Summary of Opinions: Reiterates must look at side-effects of policy while maintaining current monetary easing
  • (JP) Bank of Japan (BOJ) announces Bond purchases for month of Jan: To maintain current pace of purchases in month (released on Dec 26th)

Korea

  • Kospi opened -0.7%
  • (KR) South Korea central bank 2020 policy direction statement: BOK will expand govt bond holdings to respond to market changes; BOK will boost study of non-rate policy options in 2020 – Annual guidance on operation of monetary and credit policy
  • (KR) South Korea Dec Consumer Confidence: 100.4 v 100.9 prior
  • (KR) South Korea Industry Min Sung: Sees exports rebounding in Feb – South Korea Press

North America

  • (AR) Argentina Central Bank cuts benchmark interest rate by 300bps to 55%

Levels as of 00:20 ET

  • Nikkei 225, -0.1%, ASX 200 +0.4%, Hang Seng +1.3%; Shanghai Composite +0.7%; Kospi +0.2%
  • Equity Futures: S&P500 +0.1%; Nasdaq100 +0.3%, Dax +0.7%; FTSE100 +0.4%
  • EUR 1.1122-1.1095 ; JPY 109.66-109.41 ; AUD 0.6956-0.6921 ;NZD 0.6682-0.6666
  • Gold +0.2% at $1,517/oz; Crude Oil +0.3% at $61.84/brl; Copper -0.1% at $2.848/lb