- China’s monetary policy is looking increasingly like an alphabet soup, sowing volatility in markets. So far this year, the People’s Bank of China has boosted rates on three different liquidity facilities, created a new one, and ordered banks to cut lending. Its most high-profile tools -- the benchmark borrowing cost and reserve-requirement ratio -- have been left untouched. Since liberalizing interest rates in 2015, China has been seeking to modernize its monetary toolbox while tackling slower economic growth, currency weakness and swelling debt. This has prompted the central bank to forge an array of new tools -- a process that has sparked bigger swings in the money market as investors try to interpret them, deepening a bond selloff that has driven yields to a 1 1/2-year high.
- Nowhere are China’s rusted-out industries worse than in Liaoning, a province that’s slumped into outright recession and where officials have admitted to years of inflating fiscal revenue data. Liaoning is also a showcase for how long a road China faces to create a world-class bond market. For all its problems, the district pays little more than its peers to borrow. On the corporate side, authorities’ reluctance to let more insolvent enterprises go under means a limited role for the market, with financiers willing to restructure their debts on the sidelines.
- The woes of Singaporean energy-services provider Ezra Holdings Ltd. are a stark reminder to the city’s biggest banks of the threat souring oil and gas loans pose to their earnings. A writedown flagged by Ezra recently has refocused attention on the debt-repayment problems marine-services firms are facing, fueling concerns that lenders may have to set aside more money to cover loan losses. Fourth-quarter results due this week from DBS Group Holdings Ltd. and its two biggest rivals may include a 44 percent surge in combined provisions for the period from a year earlier, according to RHB Capital Bhd. “At the end of the day, it’s the issue of provisioning that will weigh down on profitability,” said Leng Seng Choon, an RHB analyst in Singapore.
- Japan’s economy continued on a moderate growth path during the final quarter of 2016, driven by rising exports and business investment.
- . The Obama years sprang some unwanted surprises on Israeli Prime Minister Benjamin Netanyahu -- like secret nuclear talks with Iran. This week, in his first White House visit with President Donald Trump, Netanyahu’s priority will be to make sure Israel is kept in the loop and that the two countries’ positions are generally aligned, according to Michael Oren, Israel’s ambassador to the U.S. for much of Barack Obama’s term. set Ties After Obama Years
- . Rumors about the demise of reflation trades look to have been at least a little exaggerated. Asian stocks were poised to extend a global rally as investors looked ahead to data that will provide detail on the strength of U.S. consumer prices and speeches from a range of Federal Reserve officials. The yen weakened Monday after the S&P 500 Index climbed to a record high on Friday. Stock investors last week pushed the global index higher for a third week, while Trump’s promise of a “phenomenal” tax plan snapped a six-week losing streak for the Bloomberg Dollar Spot Index that represented its longest-such slump since 2010. The rebound in the latter half of last week saw some of this year’s angst recede after a crescendo of speculation that the so-called Trump reflation trade was withering. New Zealand’s S&P/NZX 50 Index rises 0.2 percent. Futures on Australia’s S&P/ASX 200 Index and the Hang Seng gain 0.2 percent. Contracts on the FTSE China A50 Index added 0.3 percent. Nikkei 225 Stock Average futures slip 0.2 percent. The yen slides 0.3 percent to 113.57 per dollar. ides
Wall Street Journal:
- Trump Faces Test Over North Korea Missile. White House response could give clues to administration’s approach to foreign-policy challenges.
- Speed Limits on Trump’s Infrastructure Drive: Federal Laws, Rare Species and Nimbys. Environmental regulations and neighborhood opposition routinely bog down projects and will likely constrain the administration’s plan to spend $1 trillion on ‘highways, bridges, tunnels, airports’.
- Federal Reserve Vice Chair Stanley Fischer cites 'significant uncertainty' about fiscal policy under Trump.
- Apple's(AAPL) Tim Cook Urges "Massive" Government Crackdown On 'Fake News': "It's Killing People's Minds".
- Asian indices are +.25% to +.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 104.25 -3.0 basis points.
- Asia Pacific Sovereign CDS Index 29.0 -.25 basis point.
- Bloomberg Emerging Markets Currency Index 71.24 -.04%.
- S&P 500 futures +.16%.
- NASDAQ 100 futures +.11%.
Earnings of Note
- None of note
- None of note
- The China CPI report, Japan Industrial Production report, BIO investor conference and the CSFB Energy Summit could also impact trading today.