General Trend:
- Softbank rises over 16% after recent buyback announcement
- Gains in resources, energy and financial shares support Australian equities
- South Korea Kospi rises upon return from holiday break
- Kiwi (NZD) declines as unemployment rose more than expected, next week’s RBNZ meeting (Feb 13th) in focus after recent RBA guidance shift
- Japan sells 30-yr JGBs at highest bid to cover since July 2018
- RBA due to release quarterly statement on monetary policy on Friday
- Reserve Bank of India (RBI) decision expected later today, no changes expected (focus expected to be on comments)
- Bank of England (BOE) expected to leave policy unchanged at upcoming meeting
- Hong Kong markets due to resume trading on Friday, after Lunar New Year break
- US companies expected to report earnings on Thursday include Expedia, Grubhub, Kellogg, Mattel, Philip Morris, S&P Global, T-Mobile, Tapestry, Twitter, Tyson Foods, Verisign, Virtu Financial, WWE, Western Union and Yum Brands (includes afterhours)
Headlines/Economic Data
Japan
- Nikkei 225 opened -0.3%
- (JP) Japan Jan Official Reserve Assets: $1.28T v $1.26T prior
- 9984.JP Reports 9M Net ¥1.54T v ¥1.0T y/y, Op ¥1.86T v ¥1.15T y/y, Rev ¥7.17T v ¥6.81T y/y; to buyback 10.3% of shares for ¥600B [+17% in the session]
- (JP) Japan MoF sells ¥700B v ¥700B indicated in 0.70% (prior 0.70%) 30-yr JGBs, avg yield: 0.587% v 0.715% prior, bid to cover 4.72x v 4.03x prior
- (JP) Japan Dec Preliminary Leading Index: 97.9 v 97.9e (lowest since 2016); Coincident Index:102.3 v 102.2e
Korea
- Kospi opens +0.3%
- (KR) US Sec State Pompeo: See every opportunity for North Korea to de-nuclearize – Yonhap
- 030200.KR Will expand overseas network to handle Netflix traffic, no specifics provided
- (KR) some speculation that the Kaesong Industrial Zone will re-open ahead of next US/North Korea summit – Yonhap
- (KR) South Korea Lawmaker: Have agreed to a ~8% increase in defense cost sharing with US, Korea contribution ~KRW1.0T (~$890M) – Korean Press
- (KR) According to Bank of Korea (BOK) report Digital currency authorized by the central bank may have a negative impact on the South Korean financial system, causing a liquidity shortage and pushing up interest rates
China/Hong Kong
- Hang Seng and Shanghai Composite closed all week
- (CN) China Jan wholesale pork prices -15.3% y/y due to Swine flu – Chinese press
- (CN) China MOFCOM: we have made trade policies more transparent; US trade report does not match facts
- (CN) China railway trips +8.6% y/y in the first 15 days of Lunar New Year travel rush – Chinese press
Australia/New Zealand
- ASX 200 opened flat
- (AU) Australia Q4 NAB Business Confidence: 1 v 3 prior (lowest since 2015); Conditions: 8 v 13 prior
- (NZ) NEW ZEALAND Q4 UNEMPLOYMENT RATE: 4.3% V 4.1%E
- RIO Moodys raises rating one notch to A2 from A3; outlook stable
- AGL.AU Reports H1 underlying (A$) Net 537M v 487M y/y; EBIT 862M v 814M y/y; Rev 6.3B v 6.5B y/y; affirms FY19
- SPO.AU Reports H1 (A$) Net 39.0M v -39.6M y/y; EBITDA 121.6M v 13.7M y/y; Rev 1.46B v 1.50B y/y, issues positive outlook
- DOW.AU Reports H1 (A$) Net 163.4M v 5.7M y/y; EBIT 236.6M v 52.3M y/y; Rev 6.30B v 5.80B y/y; raises FY19 guidance
- (NZ) New Zealand sells NZ$100M v NZ$100M indicated in 2.50% inflation indexed Sept 2040 bonds, avg yield 1.4902% v 1.7244% prior, bid to cover 2.17x v 2.90x prior
- (AU) UBS expects the Reserve Bank of Australia (RBA) to cut rates in Nov 2019 and H1 of 2020 – US financial press
North America
- (US) Fed’s Quarles (hawk, voter): 2019 is an interim year as Fed moves to longer stress testing cycles; we have better tools than monetary policy to address financial stability concerns
- (US) Democrats in the Senate are seeking an FCC probe related to net neutrality violations, companies mentioned included AT&T, T-Mobile, Sprint and Verizon – US financial press
- (US) Fed Chair Powell: Does not comment on monetary policy or economy
Europe
- (UK) Reportedly PM May now planning the second Brexit vote for the week of Feb 25th; ministers believe this means extending Article 50 is now inevitable – Telegraph
Levels as of 12:50ET
- Hang Seng closed; Shanghai Composite closed; Kospi +0.1%; Nikkei225 -0.8%; ASX 200 +1.1%
- Equity Futures: S&P500 -0.2%; Nasdaq100 -0.3%, Dax -0.2%; FTSE100 +0.0%
- EUR 1.1354-1.1376; JPY 109.72-110.03; AUD 0.7095-0.7114; NZD 0.6744-0.6778
- Commodity Futures: Gold -0.5% at $1,307/oz; Crude Oil -0.3% at $53.86/brl; Copper +0.1% at $2.83/lb
