Headlines/Economic Data
General Trend: Asian equity markets rise amid rebound in steel makers and earlier gains in the US
Asian automakers also trade generally higher
Energy producers gain after rise in oil prices on Monday
RBA expects faster economic growth in 2018 vs 2017; notes wage growth ‘appears to have troughed’
Weaker yen boosts Japanese exporters, especially auto makers
Australia Q4 Net Exports expected to subtract from GDP; Q4 GDP data due on Wednesday’s session
Korean Won (KRW) gains over 0.5% versus US dollar as talks between the two Koreas in focus
Australia/New Zealand
ASX 200 opened +0.3: closed +1.1%
ASX 200 Energy Index +2%, Utilities +1.8%, Telecom +1.6% Resources +1.5%, Consumer Discretionary +1.1%, Financials +1%
NZM.NZ Terminates merger agreement with Fairfax’s Stuff Limited, will continue with appeal
(AU) Australia Q4 Current Account (A$): -14.0B v -12.2Be; Net Exports of GDP: -0.5% v -0.6%e
(AU) AUSTRALIA JAN RETAIL SALES M/M: 0.1% V 0.4%e
(AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 1.50%; AS EXPECTED
Looking ahead: Australia Q4 GDP data due to be released on Wed, RBA Gov Lowe scheduled to speak (topic: ‘The Changing Nature of Investment’)
China/Hong Kong
Shanghai Composite opened flat, Hang Seng -0.2%
Hang Seng Energy Index +2.7%, Info Tech +2.6%, Materials +1.8%, Services +1.3%, Consumer Goods +1.2%, Financials +1.2%
(CN) China PBoC monetary policy expected to be more flexible this year; Should cut RRR to prevent risks from slower growth – China Securities Journal
(CN) According Financial Stability Board (FSB) stats China shadow banks account for 15% of global market, with ~$7T of the global $45.2T global shadow banking assets
(CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations for the 2nd consecutive session; Net drain nil v CNY100B prior
(CN) PBOC SETS YUAN REFERENCE RATE AT 6.3386 V 6.3431 PRIOR
Japan
Nikkei225 opened +1.7%; closed: +1.8%
TOPIX Iron & Steel +2.4% Index, Electric Appliances +2.3%
Cosmetics company Shisheido [4911.JP] gains over 4% following release of FY18-20 corporate strategy
(JP) Barclays pushes back forecast for BoJ policy changes to 2019 – US financial press
(JP) Top analysts say a worsening in trade concerns could weigh on foreign demand for Japanese equities – US financial press
(JP) Japan Trade Min Seko: Japanese products contribute to US growth and jobs
(JP) Japan’s Persol, Recruit, and other major human resource firms to start providing commutation allowances for temporary workers in administrative positions from April this year as labor shortages become an increasingly serious issue – Nikkei
(JP) Japan Cabinet approves plan to improve the accuracy of prelim GDP data – financial press
(JP) Japan Govt approves signing of TPP FTA without the US – Nikkei (to happen later this week in Chile)
(JP) Japan MoF sells ¥800B v ¥800B indicated in 0.8% (0.8% prior) 30-yr bonds; Avg yield: 0.75% v 0.820% prior; Bid to cover: 4.24x v 4.27x prior
(JP) BoJ Gov Kuroda: BOJ is keeping policy very accomodative, takes time to get rid of deflationary mindset – Confirmation Hearings
Looking Ahead: Additional confirmation hearings for the BoJ Dep Gov Nominees (Amamiya, Wakatabe) set for Wed, March 7th
Korea
Kospi opens +1.1%
Shares of Samsung Electronics gain over 3% (declined ~1.8% on Monday’s session)
LG Display’s shares underperform amid cautious broker commentary
(KR) North Korea and South Korea hold high level talks today, North Korea has a “firm will” to advance relations with South Korea. Kim Jung Un has agreed to meet with South Korea President Moon after successful talks.
(KR) SOUTH KOREA FEB CPI M/M: 0.8% V 0.5%E; Y/Y: 1.4% V 1.2%E
(KR) South Korea Jan Current Account: $2.68B v $4.1B prior; Balance of Goods (BOP): $8.11B v $8.2B prior
(KR) South Korea to talk about revision of property holding tax – Korean press
(KR) South Korea to challenge US steel tariffs in G20 – Korean press
(KR) South Korea to announce scale and date of military drills with US after the 18th (were delayed due to Olympics)
(KR) South Korea sells 30-yr bonds; avg yield 2.735%
Other Asia
(PH) Philippines Feb CPI M/M: 0.8% v 1.0% prior; Y/Y: 4.5% v 4.1%e (Highest annual pace since 2014)
Punjab National Bank [PNB.IN] Foreign banks said to stop sales of gold to the bank – Indian Press
North America
US equity markets ended broadly higher: Dow +0.7%, S&P500 +0.8%, Nasdaq +0.7%, Russell 2000 +0.7%
S&P500 Utilities +2%, Financials +1.4%, Real Estate +1.4%
(US) On Thursday (Mar 8th), US President Trump expected to discuss impact of planned tariffs with US companies that use aluminum and steel – US financial press
(US) President Trump: Will not back down on trade; I don’t think we will have a trade war; Reiterates threat to raise tax on car imports
LOGI Guides initial FY19 Rev growth in ‘high single-digit’; Op $310-320M; affirms FY18 Rev +12-14% y/y; Op $270-280M
Looking ahead: US Weekly API Crude Oil Inventories due for release
Europe
(UK) Reportedly the EU’s initial offer on trade will not be very detailed; The lack of detail in the offer would leave the UK having to renegotiate large parts of its trade agreement with the EU during the post-Brexit period. The UK has been seeking to have the entire trade accord squared away before the March 2019 Brexit – press
(UK) Senior EU Brexit negotiator Rynck: not likely that there will be certainty about future ties to the EU by this fall [*Note: previously EU had sought to wrap up trade negotiations by Nov]
(UK) Feb BRC Sales LFL y/y: 0.6% v 0.5%e
OPEC Sec Gen Barkindo: Demand has not been this solid and positive since before the financial crisis; Have to wait on a decision about whether production cuts will be extended into 2019; Shale producers are interested in a dialogue with OPEC, but will not be discussion production cuts or prices
Telecom Italia [TIT.IT]: Elliott said to build stake in the company – US financial press
Levels as of 01:00ET
Hang Seng +1.7%; Shanghai Composite +0.8%; Kospi +1.5%
Equity Futures: S&P500 +0.0%; Nasdaq 100 +0.2%, Dax +0.1%; FTSE100 -0.1%
EUR 1.2332-1.2363; JPY 106.16-106.47; AUD 0.7761-0.7792 ; NZD 0.7203-0.7245
Apr Gold +0.3% at $1,324/oz; Apr Crude Oil +0.2% at $62.70/brl; Mar Copper +0.5% at $3.14/lb
