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Cryptocurrencies lower on S. Korea raids and plans to close exchanges

Written Staff | 2018-01-11 01:41:11 GMT

Headlines/Economic Data

General Trend: Asian equities trade generally lower

- China Premier Li confirms that 2017 GDP growth expected to exceed official target

- USD/JPY trades marginally higher as China FX Regulator responded to market speculation about the country’s US Treasury holdings; US Long Bond Futures +0.4%

- Australia Nov Retail Sales rise at the fastest pace in over 3 years


- Nikkei 225 opened -0.6%; closed -0.3%

- Toyota -1%, Honda -2% (outperformed during prior session)

- Fast Retailing -0.5% (expected to report Q1 earnings after close)

- (JP) Japan govt projections show primary surplus delayed by 2 years – Nikkei

- (JP) Japan Credit Bureau (JCB) developing a technology that connects separate blockchains to share their excess capacity, resolving issuesthat arise from heavy traffic on a single ledger – Nikkei

-(JP) Bank of Japan (BOJ) quarterly public opinion of household sentiment: households see inflation at 3% in 1-yr, 2% in 5-yrs

- USD/JPY FT looks at recent yen gains, being attributed to market's growing confidence that G10 central banks will implement synchronous policy tightening


-Kospi opened -0.1%

- Steelmakers trade lower: Hyundai Steel -2%, Posco -2.3%

- Samsung Electronics -0.7% ( shares remain weaker after release of prelim Q4 results on Tuesday)

- (KR) South Korea President Moon's zeal on North Korea is leaving its allies worried that inter-Korean talks could blow a hole in international sanctions and threaten efforts to denuclearize – Nikkei

- (KR) South Korea Justice Ministry to prepare a crypto exchange shutdown bill; South Korea cryptocurrency exchanges raided by police, Bitcoin falls over 9% on the news

- (KR) South Korea Finance Min Kim: Reiterates closely monitoring property market; home price 'spike' in Gangham driven by speculative demand

China/Hong Kong

-Hang Seng opened flat, Shanghai Composite -0.2%

- Hang Seng Information Tech Index -1.6%

- (CN) China Premier Li: Sees China 2017 GDP at ~6.9% - Xinhua

- (CN) China PBoC OMO: Injects CNY60B v CNY120B prior in combined 7, 14-day reverse repos; Net drains CNY30B v CNY0B prior

- USD/CNY (CN) China PBoC sets yuan reference rate at 6.5147 v 6.5207 prior

- (CN) China Commerce Ministry (MOFCOM): Protectionist sentiment is rising in the US


Looking Ahead: China Dec Banking Data (including money supply, New Yuan loans) may be released during European session; China Dec Trade Balance tentatively scheduled for Friday

Australia/New Zealand

- ASX 200 opened flat: closed -0.5%

- ASX 200 Utilities Index -0.7%, REIT -0.7%, Energy -0.6%, Financials -0.5%

- Australian Dollar and bond yields rise after better than expected retail sales


Other Asia

- (SG) DBS CEO Gupta: Expect interest rates in Singapore to remain high; staying long S$ is a good idea

North America

- US equity markets ended mostly lower: Dow -0.1%, S&P500 -0.1% Nasdaq -0.1%, Russell 2000 flat

-S&P 500 Real Estate Sector -1.5%, Utilities -1.1%: Financials +0.8%

- Xerox (XRX): Said to be in talks with Japan's Fujifilm on a range of possible deals; Fujifilm not expected to acquire all of Xerox

- (US) Leading Republicans said to consider not passing a ‘GOP’ budget this year amid concerns that it would not pass Senate – Politico; - As an alternative plan, GOP leaders are said to have discussed 'deeming' top-line spending numbers, which is only setting total spending numbers without passing a budget.

NAFTA in focus on Wednesday’s Session:

- (CA) Canada officials reportedly increasingly convinced Pres Trump will soon announce a withdrawal from NAFTA – press

- (US) White House official: There has been no change in Pres Trump's position on NAFTA

- (MX) Mexico Central Bank Gov Del Leon: If Trump triggers NAFTA withdrawal there will likely be an impact on Peso; would make inflation more complex

- USD/MXN Trades +0.25% on report that Mexico to leave NAFTA talks if Trump triggers 6-month process to withdraw

Fed Speak:

-(US) Fed's Bullard (non-voter, dove): short of a formal shift in Fed framework, policymakers could lean toward allowing inflation float above target to make up for past shortfalls; Should not hike rates into the teeth of an inverse yield curve; the Fed should strive not to cause a yield curve inversion

-(US) Fed's Kashkari (dove, non-voter): I think the markets are pricing in a lower long-term interest rate environment, which is not actually under the control of the Fed. To me, that explains some of where asset prices are today

-(US) Fed’s Kaplan (non-voter, moderate): three rate hikes is still good base case for 2018; We'll have to see what happens with regards to China and US Treasuries

-(US) Fed’s Evans (non-voter, dove): US economy has been stronger than expected; sees 2.5% GDP growth for both 2018 and 2019; Sees tax cuts adding 0.5% to GDP growth this year, total of 0.8% over two years; sees little long-run economic boost from tax cuts, sees 1.75% long-run growth; Pausing on rate hikes until midyear is a modest proposal

Energy: (US) DOE CRUDE: -4.9M V -2.5ME

-(IR) US govt is said to be preparing new sanctions against Iran over cybersecurity and human rights violations - press

Looking Ahead: US Dec PPI expected to be released, along with comments from Fed's Dudley (seen during NY afternoon)


- (UK) Chancellor of Exchequer Hammond (Fin Min): UK goals for Brexit are affected by EU's approach; EU needs to spell out what it wants post-Brexit

- (FR) ECB's Villeroy (France): Bank of France will raise France Q4 growth target to 0.6% (from 0.5%); Sees France 2017 GDP growth at 1.9% (from 1.8%)

- (DE) Potential coalition parties in Germany said to favor avoiding ban on diesel – German Press

Looking Ahead: Germany 2017 annual GDP to be released, along with the ECB Account of Monetary Policy Meeting (Dec Minutes)


Levels as of 01:00ET

- Nikkei225 -0.3%, Hang Seng +0.1%; Shanghai Composite -0.1%; ASX200 -0.5%, Kospi -0.3%

- Equity Futures: S&P500 +0.1%; Nasdaq100 +0.0%, Dax +0.2%; FTSE100 +0.1%

- EUR 1.1970-1.1941; JPY 111.82-111.32; AUD 0.7886-0.7838;NZD 0.7214-0.7183

- Feb Gold -0.1% at $1,318/oz; Feb Crude Oil -0.1% at $63.51/brl; Mar Copper +0.3% at $3.24/lb\

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