CAPIS Capital Institutional Services : Global Recap – 1/16/17

Asian Headlines

Apart from Australia, Asia kicked off the week weaker with the small cap Shenzhen market leading lower. Telcos as a sector were down over 5% there with IT and Industrials amassing losses of over 4%. The Shanghai fared better even as IT losses there approached 3%. The ¥ is somewhat stronger with all sectors lower in Japan. Energy, Financial, and Consumer Discretionary names were in focus with losses of 150bps seen.

Producer prices ticked up better than expected in December with the annual view at its slowest decline in over 2 years. However, damping the encouraging inflation look Machine Orders for November slipped 5.1% vs the expected 1.7% drop. The reading was the largest decline in the last 7 months. BOJ head Kuroda noted price trends are expected to pick up but does expect CPI to remain a bit lower for a while longer. Takata closed 10.5% lower after Friday's $1B settlement announcement with the US' DoJ. The government will offload ¥1.4T worth of shares in Japan Post prompting the name to fall 4.9%.Honda closed flat after noting they expect sales up 3% this year on higher US and China demand.

While rhetoric continues between President-Elect Trump and China concerning the One China policy and views on their currency the PBoC increased the amount of reverse repo ops today to CNY230B while also firming the Yuan midpoint. TTN noted gov researchers said this year's GDP may Not be below last year's level with another researcher noting a one-off Yuan devaluation may be in the cards. Cathay Pacific ascended 3% on word they are redoing their business strategy which will see a small fuel-hedging program while reassigning some staff.

Material names lead Down Under with Iron Ore up strong overnight. Capacity cuts are being noted with price gains expected in the steel space. Whitehaven Coal fell 2.3% despite noting 2Q coal sales up 7%. DUET Group rallied 5.4% after Li Ka-Shing's CKI upped their bid for the company.

European Headlines

Europe is generally lower as well today with the UK outperforming on a weaker £. Despite gains in Luxottica, Italy is the underperformer with the EuroStoxx 600 off .68%. Sectorwise, Autos, Insurers, Banks, and Retail lag by a percent of more. The Pound is lower ahead of PM's May's speech tomorrow with her expected to call for a 'clean and hard Brexit'. With pro-Brexit comments from President-Elect Trump and his expressed desire to get a deal done it appears not even Northern Ireland's snap elections will slow the break.

French lense-maker Essilor +13.03% will buy Italy's Luxottica ++8.56% for $24B with LUX holders to receive .461 of a share in Essilor. LUX founder Leonardo Del Vecchio will co-lead the combined manufacturer/retailer with Hubert Sagnieres of Essilor.

Post comments out of Germany, Fiat is trading lower by -4.68% with the Italian Transport Minister firing back on allegations of pollution violations. Germany's Transport Minister said any violations will result in mass recall of Fiat vehicles.

Atlas Copco's +1.04%CEO said he will resign as the Board voted to split the company into two firms next year. One company will focus on industrial customers with the other firm mining and civil engineering focused. ​

Market Prices and Macro Data

	Event		Survey	Actual	Prior	Revised
JN	Machine Orders MoM	Nov	-1.70%	-5.10%	4.10%	-
JN	Machine Orders YoY	Nov	8.10%	10.40%	-5.60%	-
JN	PPI MoM	Dec	0.40%	0.60%	0.40%	-
JN	PPI YoY	Dec	-1.40%	-1.20%	-2.20%	-
AU	Melbourne Institute Inflation MoM	Dec	-	0.50%	0.10%	-
AU	Melbourne Institute Inflation YoY	Dec	-	1.80%	1.50%	-
UK	Rightmove House Prices MoM	Jan	-	0.40%	-2.10%	-
UK	Rightmove House Prices YoY	Jan	-	3.20%	3.40%	-
JN	Tertiary Industry Index MoM	Nov	0.20%	0.20%	0.20%	0.00%
JN	Machine Tool Orders YoY	Dec P	-	4.40%	-5.60%	-
IN	Wholesale Prices YoY	Dec	3.50%	3.39%	3.15%	-
TU	Unemployment Rate	Oct	11.50%	11.80%	11.30%	-
TU	Central Gov't Budget Balance	Dec	-	-27.14b	10.02b	-
IT	CPI FOI Index Ex Tobacco	Dec	-	100.3	100	-
IT	CPI EU Harmonized YoY	Dec F	0.50%	0.50%	0.50%	-
EC	Trade Balance SA	Nov	20.8b	22.7b	19.7b	19.9b
EC	Trade Balance NSA	Nov	24.3b	25.9b	20.1b	-