CAPIS Capital Institutional Services : Global Recap – 1/17/2017

Asian Headlines

Mixed returns overnight in Asia with Japan lower as the ¥ strengthened for much of the session. The Real Estate sector slipped by nearly 3% with Consumer Discretionary and Staples also weaker. Hong Kong managed to close up small with Energy and Telcos leading there. After yesterday's selling, Shenzhen finished up over a percent with Shanghai flat. Australia closed lower with RE and IT weighing on the day.

In China, the PBoC injected CNY330B via reverse repos which is the largest in 2017. In addition, they lowered the midpoint for the Yuan to 6.8992 from 6.8874. With that said a state researcher suggested the country could let their currency float freely as they have such a large trade surplus and strong foreign reserves. Additionally President Xi said last year's GDP was 6.7%, right in the middle of prior estimates. Earlier the IMF forecasted GDP for 2017 at 6.5%. With oil still bubbling higher, Sinopec +2.2% continues to work higher from consolidation seen from last April.

The Nikkei continues to pullback from recent highs with the indice seeming to work back towards its 50 day. After weakening to the 118 level just a couple weeks ago the pair trades now with a 113 handle. Japan Tobacco fell 1.5% on £ weakness with the company a big player in the UK. An analyst at Jefferies noted the firm may have to bid for Imperial Tobacco -1.1% with slowing Russian sales and lost ground to competitors in the Japanese vapor market weighing. NGK Sparkplug fell 2.6% after Korea fined the firm 741M Won alleging the overpricing of oxygen sensors.

Investment lending picked up 4.9% in November in Australia, a welcome uptick with the prior view revised up to 1.5%. Home loans there rose .9% vs the prior pullback of .6%. Prices in Sydney and Melbourne have worked higher with lower rates encouraging purchasers. Ahead of the UK's PM May speech gold is higher, up over a percent helping Newcrest Mining +1.7%.

European Headlines

While most focus today is on the Brexit speech from the UK' PM May and the expected 12 point plan markets are keeping an eye on several data points noted below. Additionally, the World Economic Forum out of Switzerland is garnering attention as well. Indices across the region have traded to the downside today with most near lows midday. All sectors are in the red with Basic Resources, Autos, and Telcos leading lower.

British American Tobacco -1.1% agreed to buy the balance of Reynolds for $59.64 a share noting the deal will 'significantly' enhance the generation of cash flow. With a breakup deal of $1B the transaction is expected to wrap up in the 3Q.

After pulling back on concerns of recalls in Germany, Fiat Chrysler today is up 1.4% after reporting European sales for 2016 that were 14% higher YoY. Industry-wide, European car sales rose 6.5% last year. BMW -.9% saw sales slip in December while Daimler -1%. December sales rose 15.5%.

Austria's drilling tech firm Schoeller-Bleckman -3.8% reported a FY16 pretax loss considerably higher than expected with FY bookings down 17%.

		Event		Survey	Actual	Prior	Revised
EC	1)	EU27 New Car Registrations	Dec	-	3.00%	5.80%	-
EC	2)	ECB Bank Lending Survey
IT	3)	Trade Balance EU	Nov	-	235m	452m	446m
IT	4)	Trade Balance Total	Nov	-	4203m	4299m	4293m
UK	5)	CPI MoM	Dec	0.30%	0.50%	0.20%	-
UK	6)	CPI YoY	Dec	1.40%	1.60%	1.20%	-
UK	7)	CPI Core YoY	Dec	1.40%	1.60%	1.40%	-
UK	8)	Retail Price Index	Dec	266.7	267.1	265.5	-
UK	9)	RPI MoM	Dec	0.40%	0.60%	0.30%	-
UK	10)	RPI YoY	Dec	2.30%	2.50%	2.20%	-
UK	11)	RPI Ex Mort Int.Payments (YoY)	Dec	2.50%	2.70%	2.50%	-
UK	12)	PPI Input NSA MoM	Dec	2.40%	1.80%	-1.10%	-0.60%
UK	13)	PPI Input NSA YoY	Dec	15.50%	15.80%	12.90%	13.30%
UK	14)	PPI Output NSA MoM	Dec	0.40%	0.10%	0.00%	0.10%
UK	15)	PPI Output NSA YoY	Dec	2.90%	2.70%	2.30%	2.40%
UK	16)	PPI Output Core NSA MoM	Dec	0.20%	0.00%	0.00%	0.10%
UK	17)	PPI Output Core NSA YoY	Dec	2.20%	2.10%	2.20%	2.30%
UK	18)	House Price Index YoY	Nov	6.10%	6.70%	6.90%	6.40%
GE	19)	ZEW Survey Expectations	Jan	18.4	16.6	13.8	-
GE	20)	ZEW Survey Current Situation	Jan	65	77.3	63.5	-
EC	21)	ZEW Survey Expectations	Jan	-	23.2	18.1	-
FR	22)	Budget Balance YTD	Nov	-	-93.3b	-85.5b	-
IR	23)	Trade Balance	Nov	-	4045m	5091m	5040m