CAPIS Capital Institutional Services : Global Recap 1/25/17

Asian Headlines

Solid day in Asia with Japan leading thanks in part due to encouraging sales data. The strength among basic resources in the West followed through in Asia and buoyed Australia.

Following a 14 month slump, December Japanese exports turned positive rising 5.4% y/y well ahead of the 1.1% estimate. Imports fell 2.6% leaving a trade surplus of ¥641.4b vs. the expectation of +¥281.1b. Most of the auto makers traded well following President Trump's comments to reduce environmental regulations for the sector.

S. Korea's Q4 GDP expanded 0.4% q/q vs. the +0.3% estimate with the economy growing at a 2.7% pace in 2016. Hyundai Motor -3.3% reported a 33.0% decline in OP due to labor strife and falling demand in emerging markets. OP dropped to 1.02t won during Q4, shy of the 1.45t won estimate. NI declined for the 12 consecutive quarter.

Down Under, the mining majors dominated headlines. Locals had their first chance to react to the Rio Tinto +3.8%/Yanzhou Coal +1.5% deal announced yesterday. BHP's +3.3% Q2 iron ore output increase 9% while the union at its Excondida copper mine is recommending its 2,500 members strike.

European Headlines

Europe has been having a solid trading session, trading in the green since the open and volumes are up strong. Financials and industrials have been leading with gains of 1% or more with telcos the only sector in the red, down small.

Investors have been clicking on Logitech +15.7% offers following Q3 results. Sales surpassed expectations and the company raised its FY retail sales growth outlook. It has been the leading performer in the Eurostoxx600.

Novartis +2.0% sees 2017 FY sales inline with last year. The company announced a buyback and is considering a spinoff of Alcon.

Banco Santander's +3.5% results were bueno as NI surpassed expectations, NPLs decline and its fully loaded CET1 ratio improved. Elsewhere in the sector, Intesa Sanpaolo -2.3% lags following yesterday's announcement it is considering a merger with Generali +1.4%. Deutsche Bk +3.0% is considering a partial spin-off of its asset management business.

German IFO readings all lagged expectations. The USD is generally weaker this morning and commoditues are pulling back. An exception to the USD comment is the Mexican Peso following President Trump's Tweet from yesterday regarding building a wall. Cisco is purchasing AppDynamics for $3.7b in cash.

Market Prices and Macro

	Event		Survey	Actual	Prior	Revised
FR	Business Survey Overall Demand	Jan	-	11	4	3
FR	Business Confidence	Jan	105	104	105	-
FR	Manufacturing Confidence	Jan	106	106	106	-
FR	Production Outlook Indicator	Jan	6	8	6	-
FR	Own-Company Production Outlook	Jan	8	11	8	-
SP	PPI MoM	Dec	-	1.50%	0.20%	-
SP	PPI YoY	Dec	-	2.80%	0.60%	-
GE	IFO Business Climate	Jan	111.3	109.8	111	-
GE	IFO Expectations	Jan	105.8	103.2	105.6	105.5
GE	IFO Current Assessment	Jan	117	116.9	116.6	116.7
IT	Industrial Orders MoM	Nov	1.00%	1.50%	0.90%	1.00%
IT	Industrial Orders NSA YoY	Nov	-	0.10%	-3.20%	-
IT	Industrial Sales MoM	Nov	-	2.40%	0.80%	-
IT	Industrial Sales WDA YoY	Nov	-	3.90%	-0.90%	-
UK	CBI Trends Total Orders	Jan	2	5	0	-
UK	CBI Trends Selling Prices	Jan	30	28	26	-
UK	CBI Business Optimism	Jan	-8	15	-8	-