General Trend:
- US Pres Trump: May consider delaying March 1st deadline if nearing a deal with China, but would prefer not to
- Japanese equities extend gains from Tuesday’s session; Securities brokers, Machinery and Electric Appliance companies outperform
- Chinese equities extend recent winning streak following holiday break; Shanghai Telecom Index rises over 5%, IT index gains over 2%
- ZTE rises over 6% in Hong Kong ahead of high-level US/China trade talks
- Xiaomi gains over 4% in Hong Kong, expected to be added to the MSCI China index
- Shanghai Property index underperforms, China new home sales declined by 56% y/y during the Lunar New Year (HK Press article citing data from 17 major cites)
- Energy and Resources companies rise in Australia, financials lag
- Virgin Australia rises over 10%, H1 profits and revenues rose
- New Zealand 10-year yield rises over 7bps after RBNZ policy statement, NZD also gained
- South Korea Unemployment Rate rose to the highest level since 2010; Fin Min says job market situation is ‘grave’
- It remains unclear whether Trump will support government shutdown deal
- Japan Q4 prelim GDP data due on Thursday
- PBOC conducts second ever yuan denominated bill sale in Hong Kong (as expected)
- China monthly auto sales may be released later today
- China Trade Balance expected Feb 13-14th
- High level US/China trade talks due to occur in Beijing on Thursday-Friday (Feb 14-15th)
- US companies expected to report earnings on Wed include AIG, Cisco, DaVita, Louisiana Pacific, MGM, NetApp and Nu Skin (including after hours)
Headlines/Economic Data
Japan
- Nikkei 225 opened +0.8%
- (JP) JAPAN JAN PPI (CGPI) M/M: -0.6% V -0.2%E; Y/Y: 0.6% V 1.0%E
- (JP) Japan Center for Economic Research (JCER): Japan GDP grew 1.2% in Dec v -0.7% prior (first growth in 2 months) – Japanese Press
- 7201.JP Reports 9M Net ¥316.7B v ¥578.1B y/y; Op ¥313.7B v ¥364.2B y/y; Rev ¥8.58T v ¥8.53T y/y; Cuts all guidance
- (JP) Moody’s Official: Still ‘opportune’ time for Japan to proceed with sales tax increase
- 6502.JP Reports 9M Net ¥1.02T v ¥27.0B y/y; Op ¥8.2B v ¥55.5B y/y; Rev ¥2.65T v ¥2.80T y/y; Cuts outlook
- (JP) Japan MoF sells ¥2.0T v ¥2.0T prior in 0.10% (prior 0.10%) 5-yr JGB: avg yield: -0.151% v -0.144% prior, bid to cover: 4.84x v 5.15x prior
Korea
- Kospi opens +0.4%
- (KR) South Korea Jan Unemployment Rate: 4.4% v 3.8%e
- (KR) South Korea Finance Min Hong comments after Jan Jobs Data: Job market in ‘grave’ situation
- (KR) US Adm. Philip Davidson: Think its unlikely that North Korea will give up all of its nuclear weapons or production capabilities, but seeks to negotiate partial denuclearization in exchange for US and international concessions – Yonhap
China/Hong Kong
- Hang Seng opens +0.1%; Shanghai Composite opens +0.1%
- (CN) US President Trump: May consider delaying March 1st deadline if nearing a deal with China but would prefer not to
- (US) US Treasury Sec Mnuchin: Hopes for productive trade meetings this week – comments from Beijing
- (CN) China PBoC sells CNY20B v CNY20B indicated in offshore-yuan 3-month and 1-yr bills in Hong Kong
- (CN) China President Xi to meet with US trade delegation Friday including Lighthizer and Mnuchin in Beijing – SCMP
- (CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations for 3rd consecutive session; Net: CNY270B drain v CNY100B drain prior
- (CN) Fitch: China shadow financing likely to decline for a second consecutive year in 2019, offshore funding market remains challenging
- (CN) China PBoC sets Yuan Reference Rate: 6.7675 v 6.7765 prior
- (HK) Hong Kong Commissioner for Economic and Trade Affairs Eddie Mak: Sustainable and stable trade ties between China’s Hong Kong Special Administrative Region (HKSAR) and the United States are mutually beneficial – Xinhua
Australia/New Zealand
- ASX 200 opened -0.0%
- (AU) Reserve Bank of Australia (RBA) Head of Economic Analysis Heath: perspectives about the domestic economy have shifted
- (NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE UNCHANGED AT 1.75%; AS EXPECTED; Sees keeping OCR at 1.75% through Nov 2020
- (NZ) RBNZ Gov Orr: Reiterates chances of rate cut have not increased, outlook is balanced up or down; does not rule out rate cut, best guess is we hold for a long period – Post rate decision press conference
- (AU) Australia Feb Westpac Consumer Confidence: 103.8 v 99.6 prior; m/m: +4.3% v -4.7% prior
- VAH.AU Reports H1 (A$) underlying pretax 112.3M v 102.5M y/y; EBIT 191.8M, +19.4% y/y; Rev 3.07B v 2.8B y/y; Guides Q3 Rev +7% q/q at least
- TTS.AU.OTC Reports H1 (A$) Net 182.5M v 24.6M y/y; Rev 2.79B v 1.34B y/y; CFO to retire
- EXP.AU Reports prelim H1 (A$) EBITDAI 17.6M; Rev 84.3M; CEO Anthony Ritterresigns, names Chairman Bob East interim CEO
- AOG.AU Reports H1 (A$) underlying Net 12.0M v 36.3M y/y; Rev 144.0M v 208.0M y/y; updates on strategic review
- CSL.AU Reports H1 at cc Net $1.16B v 1.09B y/y; EBITDA $1.72B v $1.62B y/y; Rev $4.34B v 3.99B y/y; narrows FY19 guidance range higher
- (AU) Australia sells A$900M v A$900M indicated in 2.75% Nov 2029 bonds, avg yield: 2.1564% v 2.2988% prior, bid to cover 3.00x v 2.70x prior
North America
- (US) Pres Trump: Can’t say I’m happy about border deal; will have meeting on deal later today; does not expect govt shutdown
- (US) Sen Maj Leader McConnell (R-KY): hopes Pres Trump will sign border funding agreement
- (US) Weekly API Oil Inventories: Crude: -1M v +2.5M prior
- (US) Fed Mester (hawk, non-voter): monetary policy doesnt seem far behind or ahead of the curve; inflation likely to move below 2% in first part of the year due to low energy prices; Plans will be finalized for ending balance sheet runoff and completing balance sheet normalization at coming meetings
- (US) Fed’s George (hawk, voter): Support for pausing interest rate hikes was to let Fed assess the impact of past hikes
Europe
- (UK) PM May adviser Oliver Robbins reportedly was overheard saying that MPs will be given choice between PM May’s deal or lengthy delay to Brexit – ITV News
- (UK) PM May said to have the opportunity to win a late concession from EU leaders at Brussels summit March 21st – US financial press
Levels as of 12:50ET
- Hang Seng +1.2%; Shanghai Composite +1.3%; Kospi +0.4%; Nikkei225 +1.4%; ASX 200 -0.3%
- Equity Futures: S&P500 +0.3%; Nasdaq100 +0.5%, Dax +0.2%; FTSE100 +0.2%
- EUR 1.1324-1.1345; JPY 110.43-110.70; AUD 0.7093-0.7137; NZD 0.6727-0.6853
- Commodity Futures: Gold +0.2% at $1,316/oz; Crude Oil +0.9% at $53.57/brl; Copper +0.4% at $2.78/lb
