CAPIS Capital Institutional Services : International Summary, January 22nd, 2016

Asian Headlines

Buoyed by potential easing by central banks Asia staged a nice rebound today with the Nikkei rallying well. Along with fairly dovish comments from the ECB, TTN today noted the Financial Times sees data showing a slight probability of 4 hikes in the States this year. Back in Japan, energy moved up nearly 7% with all the major sectors up 5% or more. HK also saw solid gains with Energy there up over 7.5%. Consumer Discretionary names gained over 6%. Mainland Chinese markets opened up, sold lower, but closed right near early morning highs.

The Japanese press is noting the BoJ is strongly considering further easing. The creditability of the BOJ has been called in doubt amid further pushbacks of the 2% inflation target even though they have cited weaker oil as the reason. The stronger ¥ is also in focus. Further making the case for more of a response, the Nikkei flash manufacturing PMI was 52.4 vs December's 52.6 reading. Within that, New Orders were at a 6 month low with input prices down on lower material prices for the 1 time in three years. The Nikkei reported Sharp +3.1% was leaning towards accepting INCJ's offer with creditors set to approve the rescue plan as well. Focus is of course on keeping technology in Japan.

China's VP Li said the government will continue to intervene in the stock market. He noted 'an excessively fluctuating market is a market of speculation where only the few will gain the most benefit when most people suffer'. China Shenhua rallied +10% post a report the government will pay 100B yuan a year to the industry to support a reduction in coal and steel capacity. Further the Ecoonmic Info Daily said the government may close 4300 coal mines over 3 years to pare the glut.

South Korea's LG Electronics +6.6% rallied post Korea Economic Daily reporting the company is to supply electronic car parts to China's FAW. Kia Motors +2.3% denied a report released by the Seoul Economic Daily it would setup a JV with Iran's Khodro .

Down Under, Santos surged 10% despite a 24% drop in Q4 sales and announcing further asset writedowns. In November, they expected A$3.4B in asset value reduction. Woodside Petroleum +1.8% yesterday announced $1.2B in writedowns.

European Headlines

Europe again opened better and has only added to gains with some indices rallying up over 3%. All sectors are to the upside with Energy and Construction leading. A decent rebound in oil is why the Energy sector seeing gains over 5%. Iron ore plays are getting an extra lift in the basic resources sector with Brazil ordering Vale to close a port due to environmental violation allegations. Volumes are an encouraging 7% higher vs the last 5 days of trading and 33% up vs the last week. Post Draghi commenting the ECB would reassess in March, today's PMI misses in the EZ, Germany, and France lend to possible further easing ahead.

The ECB Survey of Professional Forecasters, which is a precursor to the ECB projections, noted its GDP view is unchanged adding they agree with the medium term target of 2% for inflation.

Shoe retailer Tod's +4.7% stepping up today post reporting FY sales just ahead of estimates. Same store sales were down though a bit more than expected. They kept their €200M 2016 ebitda target.

Philips flat post noting its cancelled its controlling stake sale of its auto/LED unit. The US was opposed to the deal citing national security.

Citi upgraded Antofagasta +5.4% to Buy noting the 75% decline over the last 3 years. They noted the company's strong balance sheet calling them a 'trough cycle survivor'.

Computer board-maker Kontron +13% has entered into an agreement with Ennoconn where Kontron will sell its Canadian unit for $57.3M.

Market Prices and Macro Data

		Event		Survey	Actual	Prior	Revised
DE	1)	Retail Sales MoM	Dec	0.30%	-0.80%	0.20%	0.00%
DE	2)	Retail Sales YoY	Dec	-	0.00%	1.10%	1.00%
FR	3)	Markit France Manufacturing PMI	Jan P	51.3	50	51.4	-
FR	4)	Markit France Services PMI	Jan P	50.1	50.6	49.8	-
FR	5)	Markit France Composite PMI	Jan P	50.3	50.5	50.1	-
SW	6)	Bloomberg Jan. Sweden Economic Survey (Table)
NO	7)	Bloomberg Jan. Norway Economic Survey (Table)
GE	8)	Markit/BME Germany Manufacturing PMI	Jan P	53	52.1	53.2	-
GE	9)	Markit Germany Services PMI	Jan P	55.5	55.4	56	-
GE	10)	Markit/BME Germany Composite PMI	Jan P	55.1	54.5	55.5	-
EC	11)	ECB Survey of Professional Forecasters
EC	12)	Markit Eurozone Manufacturing PMI	Jan P	53	52.3	53.2	-
EC	13)	Markit Eurozone Services PMI	Jan P	54.2	53.6	54.2	-
EC	14)	Markit Eurozone Composite PMI	Jan P	54.1	53.5	54.3	-
IC	15)	Wage Index MoM	Dec	-	0.90%	0.90%	-
IC	16)	Wage Index YoY	Dec	-	9.70%	8.70%	-
UK	17)	Retail Sales Ex Auto Fuel MoM	Dec	-0.30%	-0.90%	1.70%	1.30%
UK	18)	Retail Sales Ex Auto Fuel YoY	Dec	3.50%	2.10%	3.90%	3.40%
UK	19)	Retail Sales Inc Auto Fuel MoM	Dec	-0.30%	-1.00%	1.70%	1.30%
UK	20)	Retail Sales Inc Auto Fuel YoY	Dec	4.40%	2.60%	5.00%	4.50%
UK	21)	Public Finances (PSNCR)	Dec	-	8.1b	5.4b	7.1b
UK	22)	Central Government NCR	Dec	-	20.5b	7.7b	-
UK	23)	Public Sector Net Borrowing	Dec	10.0b	6.9b	13.6b	12.9b
UK	24)	PSNB ex Banking Groups	Dec	10.5b	7.5b	14.2b	13.5b
EC	25)	Euro Area Third Quarter Government Debt
EC	26)	Euro Area Third Quarter Government Deficit
IR	27)	PPI MoM	Dec	-	-1.10%	2.90%	-
IR	28)	PPI YoY	Dec	-	3.60%	4.40%	-