Asia-pacific Markets Firm Ahead Of U.S. Inflation; Crude Advances

09/12/2021 Shares in Asia rose on Thursday as concerns about the economic impact of the Omicron coronavirus variant receded and increasing caution ahead of U.S. inflation data capped other risk assets such as oil. MSCI Inc.’s gauge of Asia Pacific equities advanced for a third day, up 0.49%, led by Hong Kong. Tencent firm 1.20%. The pace of factory gate price rises in China slowed last month, with the annual pace at a still whopping 12.9%, while inflation picked up to 2.3% year-on-year. Friday’s U.S. inflation data is seen as a prelude to the Fed’s December meeting next week. Economists expect annual headline U.S. inflation to have hit 6.8% last month, though previous readings have surprised on the upside. The U.K. tightened rules advising people to work from home and mandating the use of so-called vaccine passports in large venues.

Oil extended gains as studies showed that existing vaccines are effective against the omicron coronavirus variant, thus easing demand fears. Futures in New York rose toward $73 a barrel on Thursday. U.S. crude stockpiles dropped by a modest 241,000 barrels last week for a second weekly draw, according to government data. Brent crude futures are trading around $76.25 a barrel, having gained 0.60%.

Gold held steady at $1,786 an ounce head of key U.S. inflation data due Friday.

Bitcoin flat on Wednesday at $50,400. Executives from six major cryptocurrency companies, including Coinbase and Circle, urged Congress to provide clearer rules for the booming $3 trillion industry.

Locally, the JSE slipped 0.73% to 72,403.88 points, dragged by precious metals – 3.16%, resources -2.13%, and industrial metals -1.64%. The Top-40 saw the day’s session out 0.78% lower. Rand Merchant Investment Holdings (RMIH) rose 8.87% to R45.92, this is after the company announced the sale of its 30% stake in UK short-term insurer Hastings Group to Nordic insurer Sampo for R14.6bn, thereby doing away with a planned rights issue. The sale gives Sampo outright ownership of Hastings. The deals means RMIH will book an R8.7bn profit after settling Hastings’ debt and receiving a dividend from Outsurance, which is 89.1% owned by RMI and which also had a stake in Hastings. The local currency steady at R15.73/$, having tested R15.66/$ levels after market close on Wednesday. Top-40 futures +40points, IG markets, looking forward to a choppy session at the opening bell.

NEWS:
• South Africa Records Highest Covid-19 Cases Since Omicron Find
• South African Covid Hospitalizations at 4,252, 8.6% in ICU
EQUITY PREVIEW:
• RMI Jumps on ‘Very Favorable’ News That Capital Raise Not Needed
• Sampo Buys Remaining RMI Stake in Hastings
MEDIA SUMMARIES:
• Moneyweb: Dis-Chem gets tough on unvaccinated employees
• Fin24: Eskom runs up R1bn diesel bill in November
ECONOMIC DATA:
• 11am: 3Q CURRENT Account Level, est. 259b, prior 343b
• 11am: 3Q Current Account as a % GDP, est. 3.9%, prior 5.6%
• 11:30am: Oct. Mining Production MoM, est. 2.2%, prior -3.7%
• 11:30am: Oct. Mining Production YoY, est. -1.0%, prior -3.4%
• 11:30am: Oct. Platinum Production YoY, prior -7.5%
• 11:30am: Oct. Gold Production YoY, prior -6.9%
• 1pm: Oct. Manufacturing Prod SA MoM, est. 0.5%, prior 3.8%
• 1pm: Oct. Manufacturing Prod NSA YoY, est. -1.6%, prior 1.3%
CORPORATE EVENTS:
• Annual General Meetings: APN SJ

EU/UK/US
European stocks ended a volatile session lower on Wednesday, with tech and luxury stocks reversing strong gains as investors pitted vaccine reassurances against COVID-19 curbs. The pan-European Stoxx 600 index gave up early gains to trade 0.59% lower, with the German Dax down 0.80% and the FTSE100 closing flattish 0.04%. Germany’s trade balance, and current account balance, data is due 09H00 local time on Thursday. FTSE100 futures +10points up, while DAX futures are +14 points firm

U.S. contracts fluctuated on Thursday after the S&P 500 and the technology-heavy Nasdaq 100 extended a rally previous day. Dow futures off -60 points, 0.17%, S&P500 futures slid 0.15%, Nasdaq easy at -0.16%. Wall Street extended gains recorded in the previous session, on Wednesday, as fears regarding the Covid-19 omicron variant subsided. The Dow Jones Industrial Average index gained 0.10%, S&P500 advanced 0.31%, while the tech-heavy Nasdaq rallied 0.64%. U.S. stocks entered wait-and-see mode for Friday’s inflation report that could fuel further Fed rate hike bets.

ASIA
Japan’s Nikkei225 slipped on Thursday as investors turned cautious ahead of key central bank meetings next week, although strong gains for airlines and communications services sector limited losses with Omicron fears continuing to ebb. The Nikkei declined 0.13%. The U.S. Federal Reserve headlines a string of central bank policy decisions next week, which also includes the Bank of Japan and the ECB.

China’s red-hot factory-gate inflation cooled slightly in November, driven by a government crackdown on runaway commodity prices and an easing power crunch, amid Beijing’s efforts to lessen the crippling effects of surging costs on the economy. The producer price index rose 12.9% in November, slower than October’s 26-year high of 13.5%. China’s blue-chip CSI300 leading regional gains up +2.35%, Shanghai Composite gaining +1.35%, alongside Hang Seng firm 1.03%.

Australia’s securities regulator said on Thursday it was suing Australia and New Zealand Banking Group for failing to provide over half a million customers with promised benefits, which led to the payment of A$200 million ($143.40 million) in remediation. The S&P/ASX200 slid 0.28%