EM ASIA CREDIT: Kasikornbank (KBANK): Q4 Results hitting tapes

Liquidity continues to tighten into year end as month to date liquidity withdrawal tops CNY900bn after today's withdrawal.  Repo rates remain steady, with limited upward pressure.   

• The PBOC issued CNY67.3bn of 7-day reverse repo at 1.4% during this morning's operations.
• Today's maturities CNY130.9bn.
• Net liquidity injection CNY63.6bn.
• The PBOC monitors and maintains liquidity in the interbank system through the issuance of reverse repo.
• The CFETS Pledged Repo Deposit Institutions 7 Day Weighted is at 1.40%, from prior close of 1.44%.
• The China overnight interbank repo rate is at 1.25%, from the prior close of 1.20%.
• The China 7-day interbank repo rate is at 1.40%, from the prior close of 1.44%

The USD/CNY fix printed at 7.0572, versus a BBG market consensus of 7.0423. The actual fixing edged up on Friday's outcome (7.0550), while the fixing error was slightly higher, but at +149pips, remains within recent ranges. USD/CNH is little changed post the fixing outcome, last 7.0335/40, which leaves us near end Friday levels from late last week. Earlier we did test just under 7.0300, but there was now follow through. Broader USD sentiment is softer so far today, BBDXY index down close to 0.10%. 

European gas rose while the US fell on Friday as weather forecasts diverged. Europe has had a mild start to the heating season but a drop in temperatures is expected from this week. The region started with inventories below last year’s level and the market remains vulnerable to spikes in demand or supply disruptions. 

• European storage continues to trend lower reaching 67.2% on Saturday, about 10pp below average. It started December around 75%. The reversal in prices since the 11 December low should help attract LNG shipments back to the region.
• European prices rose 2.1% on Friday to EUR 28.225 after a high of EUR 28.500, the highest since end November. They rose 2% on the week on increased heating demand expectations but are still down 2.1% this month.
• Ukraine continues to target Russian energy infrastructure with the Krasnodar Krai gas pipeline damaged near the Crimean Bridge.
• Purchasers took advantage on Friday of the sharp fall in US gas prices pushing them up 3.0% to $4.026 but they were still down 2.1% on the week. The January Henry Hub contract is 16.2% lower in December and been in oversold territory. They reached a trough of $3.840 on Friday before recovering. They are higher in Monday’s trading at around $4.067.
• A shift in forecasts for warmer weather in the US had driven the gas sell off and Atmospheric G2 reported higher temperatures towards end December and into early January.
• Lower-48 US gas production rose 9.4% y/y on Friday while demand fell 1.2% y/y, according to BNEF data. Flows to LNG export terminals fell around 2.7% w/w.
• Australia has announced that 15-25% of new LNG production will have to be reserved for the domestic market effective immediately but not retroactively applied.