General Trend:

  • IT and Telecom shares outperform in Shanghai ahead of China/US trade talks
  • Declines in oil prices weigh on energy shares in Asia
  • Financials weigh on the Australian market, Bendigo drops after earnings
  • Several miners in Australia warn operations and financial outlooks will be impacted after severe weather damages/closes down operations
  • Iron ore and materials firms rise in China and Australia; Dalian Iron Ore prices trade limit up
  • New Zealand Dollar (NZD) rises on the session, Wednesday’s RBNZ policy meeting in focus
  • Thai Baht (THB) rises against the US dollar, Thailand Royal Princess Ubolratana Mahidol withdrew her candidacy from the elections
  • Swiss Franc (CHF) sees volatility amid Japanese holiday
  • China PBoC may release Jan foreign exchange reserves data later today, reserves expected to have risen for 3rd straight month to ~$3.085T v $3.073T prior (US financial press)
  • US trade delegation to travel to Beijing for talks on Feb 14-15th
  • There is press speculation that Trump and Xi could hold phone conversation before March 1 tariff deadline (US press)

Headlines/Economic Data

Japan

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  • Nikkei 225 closed
  • 6502.JP Expected to cut FY18/19 Op forecast to ¥20-30B, notes costs related to energy business (guided ¥60B currently) – Japanese Press

Korea

  • Kospi opens +0.2%
  • (KR) South Korea signs new $924M defense cost sharing deal with US, +8.2% from prior and below $1.0B as they were hoping -Korean Press
  • (KR) US Commerce Department has preliminarily found that weighted average dumping margins for South Korean steelmakers NEXTEEL Co. is 59.09% and SeAH Steel Corp is 26.47% – Yonhap
  • (KR) Inventory of South Korean manufacturers has increased to its highest point in 10 years – Yonhap

China/Hong Kong

  • Hang Seng opens -0.1% and Shanghai Composite opens -0.2%
  • (CN) China travel over Lunar New Year saw 415M travelers, +7.6% y/y – Xinhua
  • (CN) China PBoC may release Jan foreign exchange reserves data later today, reserves expected to have risen for 3rd straight month to ~$3.085T v $3.073T prior – US financial press
  • (CN) China 2019 GDP expected to slow to 6.3% in 2019 v 6.6% in 2018 – China Daily
  • (CN) Trump’s advisers said to have informally discussed holding a summit in March with China President Xi to try to end the trade war; Trump said to plan phone conversation with Xi before March 1 tariff deadline – Axios
  • (CN) Talks to resume between China and US on trade, expected to focus on intellectual property; China Vice premier Liu He to join talks – press
  • (CN) According to China Commerce Ministry, Lunar New Year retail, food and drink sales totaled CNY1.005T, -1.7% y/y (lowest growth on record since 2005 tracking started) – press
  • JD Reports China New year sales from Feb 3-8th +42.7% y/y – Xinhua
  • (CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations v CNY80B injected in 14-day reverse repos prior: Net: CNY20B drain v CNY80B injected prior
  • (CN) China PBoC sets Yuan Reference Rate: 6.7495 v 6.7081 prior (weakest setting since July 2018)
  • (CN) China will see more than CNY1.0T PBoC lending operations expire this week – CSJ
  • (CN) Hebei province in China to offer financial incentives for companies seeking to raise equity capital; Province to spend up to CNY100M to encourage local companies to conduct IPOs – financial press
  • (CN) US officials do not expect a quick resolution to trade agreement, but some talk that the March 1st deadline could be extended while talks continue – press

Australia/New Zealand

  • ASX 200 opened +0.1%
  • (FR) Australia signs A$50B contract for submarines with Naval Group for 12 new submarines – press
  • JBH.AU Reports H1 (A$) Net 160.1M v 151.7M y/y; EBITDA 264.3M v 256.3M y/y; Rev 3.84B v 3.69B y/y
  • FMS.AU Takeovers panel declare unacceptable circumstances in Flinders Mines delisting
  • SIG.AU Affirms FY19 underlying EBITDA ~A$75M; Guides FY20 underlying EBITDA A$55-60M, business review identifies >A$100M/yr in cost savings
  • (AU) Australian Securities Investments Commission (ASIC) may request Australia Govt may changes to mortgage rules to make it harder for borrowers to obtain a new home loan

Other

  • (US) IMF MD Lagarde: Sees possible “economic storm” caused by: trade and tariff escalations, financial tightening, Brexit uncertainty, and Chinese slowdown
  • 2330.TW Reportedly to remain exclusive supplier of chips for 2019 series of iPhones – press

North America

  • (US) Talks on funding border wall between Republicans and Democrats have again come to a stalemate, with next govt shutdown looming – US press

Europe

  • (UK) PM May has agreed to talks with Corbyn on soft Brexit – Telegraph
  • (ES) Protesters in Madrid oppose any concessions by the govt to Catalan pro-independence parties; call for early elections – press
  • (UK) PM May has rejected targeting a customs union with EU (which would appease Labour Party) – press
  • (CH) Switzerland and the UK are expected to sign a trade related agreement on Monday (Feb 11th) – financial press

Levels as of 12:50ET

  • Hang Seng +0.2%; Shanghai Composite +0.9%; Kospi 0.0%; Nikkei225 closed; ASX 200 -0.2%
  • Equity Futures: S&P500 -0.1%; Nasdaq100 -0.2%, Dax -0.1%; FTSE100 -0.1%
  • EUR 1.1312-1.1329; JPY 109.78-110.02; AUD 0.7083-0.7108; NZD 0.6742-0.6774
  • Commodity Futures: Gold -0.3% at $1,315/oz; Crude Oil -1.4% at $52.02/brl; Copper -1.0% at $2.78/lb
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