China Inflation Raises Some Deflation Concerns

Feb 15 19, 07:33 GMT

General Trend:

Shanghai Composite declines on weakness in property sector
Telecom services and IT firms rise in Shanghai amid focus on trade talks
Tech names weigh on the Hang Seng
Equity markets in Japan weighed down by financials and machinery companies, Heavily-weighted Nikkei components also decline
Whitehaven Coal declines over 9% in Australia, earnings miss estimates
National Australia Bank (NAB) credit outlook cut to Negative at Fitch, notes recent management changes
US retail sales miss estimates
Singapore Q4 GDP revised lower by more than expected amount
China inflation data misses ests
Indonesia trade deficit wider than expected, exports contract more than expected
Taiwan Semi and AU Optronics release Jan sales figures

Headlines/Economic Data

Australia/New Zealand

China/Hong Kong

Shanghai Composite opened -0.3%, Hang Seng -0.7%
(CN) Reportedly US/China trade talks remain deadlocked as Beijing refuses to eliminate coerced technology transfers or government subsidies to Chinese companies – WSJ
(CN) Trade talks remain far apart on some demands made by US; there have been discussions about removing some of the US tariffs on China – SCMP
(US) US and China officials said to be ‘scrambling’ to at least produce memorandum of understanding (MOU) by end of today, MOU could help pave the way for meeting between Trump and China President Xi – FT
(CN) CHINA JAN CPI Y/Y: 1.7% V 1.9%E (lowest since Jan 2018)
(CN) China Jan PPI Y/Y: 0.1% v 0.3%e (matches the lowest since 2016, slows for 7th straight month)
(CN) China state planner NDRC issues statement on stepping up govt financing guarantee funds for smaller firms, & rural development
(CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations for 5th consecutive session
(CN) China PBoC sets Yuan Reference Rate: 6.7623 v 6.7744 prior

Japan

Nikkei 225 opened -0.4%
(JP) Japan Buying of Foreign Bonds: ¥992.4B v ¥915.3B prior; Foreign Buying Japan Stocks: -¥102.0B v -¥123.8B prior
(JP) Japan Banking Lobby chief Fujiwara: BOJ should not pay excess attention to the 2% inflation target; should conduct monetary policy in a forward-looking manner
(JP) Japan Dec Fin Industrial Production M/M: -0.1% v -0.1% prior; Y/Y: -1.9% v -1.9% prior

Korea

Kospi opened -0.7%
(KR) South Korea Finance Ministry: Investments and exports undergoing ‘corrections’; job creation remains ‘sluggish’
(KR) South Korea Dec Current Account Balance: $4.82B v $5.1B prior; Balance of Goods (BOP): $6.53B v 8.0B prior
(KR) South Korea sells KRW593B v KRW550B indicated in 50-year bonds: avg yield 1.970% v 1.950% prior
(KR) South Korea Jan Bank Lending to Household Total (KRW): 828.7T v 827.6T prior

Other

(ID) Indonesia Jan Trade Balance: -$1.2B v -$0.9B prior
(IN) India Gov’t Minister: Incontrovertible evidence of Pakistan’s hand in Kashmir attack; India withdraws most favored nation status from Pakistan
(SG) Singapore Q4 Final GDP Q/Q: 1.4% v 1.5%e; Y/Y: 1.9% v 2.1%e (2-year low)
(SG) Singapore MTI: 2019 growth expected to come in slightly below mid-point of 1.5-3.5% forecast range, pace of growth in domestic economy is expected to slow in 2019 vs 2018

North America

(US) DEC ADVANCE RETAIL SALES M/M: -1.2% V 0.1%E; RETAIL SALES (EX-AUTO) M/M: -1.8% V 0.0%E
(US) Fed’s Brainard (voter, dove): retail sales data today certainly caught my eye but it’s only one month’s data; data does add to story of downside risks – CNBC interview
(US) White House Econ Adviser Kudlow: there are “glitches” in today’s retail sales data, it was affected by the govt shutdown – Fox News interview
(US) White House Press Sec Sanders: confirms Pres Trump will sign govt funding bill and declare a national emergency to build a border wall
(US) US President Trump is expected to speak on border security at 10 am ET on Friday, expected to sign spending bill and declare national emergency (as expected)
(US) House Speaker Pelosi (D-CA): may file legal challenge if Pres Trump declares national emergency over border wall; she will consider options
(US) US House advances Border Security Funding Bill (as expected); Majority of House later votes to approve the government funds for border security and other programs, vote 300 to 128

Europe

(UK) UK lawmakers reject govt motion that sought reaffirmation of support to seek changes to Brexit deal
(UK) UK Lawmakers Vote against SNP’s ‘Amendment I’ and Labour’s ‘Amendment A’

Levels as of 01:00ET

Nikkei 225, -1.3%, ASX 200 +0.1%, Hang Seng -1.8%; Shanghai Composite -1%; Kospi -1.6%
Equity Futures: S&P500 -0.4%; Nasdaq100 -0.5 %, Dax -0.3%; FTSE100 -0.1%
EUR 1.1311-1.1283 ; JPY 110.55-110.26 ; AUD 0.7108-0.7079 ;NZD 0.6840-0.6809
Gold +0.1% at $1,315/oz; Crude Oil +0.5% at $54.65/brl; Copper -0.4% at $2.761/lb