Asian Equities Track Friday’s Gains In The US

Feb 18 19, 07:37 GMT

General Trend:

Telecom services and IT sectors outperform in China amid focus on trade talks
Shanghai banking index rises over 1%, China Jan new loans hit record high
Japanese equities supported by gains in financials and Marine/Transportation companies
US markets closed in observance of holiday
Resource and energy companies lead gains in Australia
Singapore’s DBS rises over 1% post earnings
Japan cut assessment of machinery orders
China auto sales continued to decline in Jan
Commodity currencies rise, some press outlets note ‘optimism’ related to US/China trade talks
Reserve Bank of Australia (RBA) due to release policy meeting minutes on Tuesday
US Commerce Dept. is expected to imminently release its auto-related recommendations, has submitted report to White House but details not disclosed yet
HSBC is expected to report earnings on Tuesday (Jan 19th)
BHP expected to report H1 results after Tuesday’s close

Headlines/Economic Data

Japan

Nikkei 225 opened +1.5%
(JP) JAPAN DEC CORE MACHINE ORDERS M/M: -0.1% V -1.1%E; Y/Y: +0.9% V 3.4%E; Govt cuts assessment of machine orders, orders are stalling (prior recovering)
8001.JP China Foreign Ministry acknowledged a company worker has been detained on espionage allegations in China since Feb 2018 – Japanese Press
7201.JP Corporate governance panel expected to suggest an outside director to oversee board meetings – Nikkei
(JP) Former BoJ Deputy Gov Iwata: Further rate cuts could bring some financial institutions ‘under’; Japan must ramp up fiscal spending with debt bank rolled by BoJ

Korea

Kospi opens +0.5%
(KR) North Korea propaganda notes that N. Korea/US ties could experience “a major breakthrough,” with the second summit; North Korea has not built or tested nuclear weapons of late, nor does it plan to use or spread these weapons
005930.KR Senior North Korean official is believed to have looked around areas near a smartphone factory in Vietnam owned by Samsung, sparking speculation that he may visit it – Yonhap
(KR) South Korea Jan Foreign Net Investment in local bonds (KRW): -3.74T v +1.48 prior; Local Stocks (KRW): +3.7T v +0.1T prior
042660.KR Shipbuilders union to vote on strike against sale to Hyundai Heavy; voting concludes Tuesday Feb 19 -Korean Press
(KR) Bank of Korea (BOK) sells 6-month Monetary Stabilization Bonds (MSB); avg yield 1.81% v 1.63% prior
(KR) South Korea sells KRW1.85T v KRW1.85T indicated in 10-yr bonds, avg yield 1.985% v 1.995% prior, bid to cover 2.76x v 3.18x prior

China/Hong Kong

Hang Seng opens +1.0%; Shanghai Composite opens +0.7%
(CN) Over the weekend, US President Trump was briefed by advisers on trade talks with China; Trump called the talks ‘very productive’ following the meeting – financial press
(CN) China state news Xinhua: China and US can get closer to the final goal as the pace of talks quickens
(CN) China corporate USD bond offerings over the last 3-months have an avg coupon of 7.8%, +2.2% y/y – press
(CN) China State-Owned Assets Supervision and Administration Commission (SASAC) Chairman Xiao Yaqing reiterated to seek to attract foreign investment into larger state-owned enterprises (SOEs) – financial press
(CN) China PBoC Head of Monetary Policy Dept Sun Guofeng said China does not wish to use administrative methods to require banks to lend – financial press
(CN) Certain soybean traders in China played down recent cancellation of import orders – financial press
(CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations for 6th consecutive session; No injection or drain with no reverse repos maturing
(CN) China PBoC sets Yuan Reference Rate: 6.7659 v 6.7623 prior
(CN) CHINA JAN NEW YUAN LOANS (CNY): 3.230T V 3.00TE (record high) (Friday)
(CN) CHINA JAN AGGREGATE FINANCING (CNY) : 4.64T v 3.31TE (Friday)
(CN) CHINA JAN M2 MONEY SUPPLY Y/Y: 8.4% V 8.2%E; M1 Money Supply Y/Y: 0.4% v 1.9%e; M0 Money Supply Y/Y: 17.2% v 10.0% (Friday)

Australia/New Zealand

ASX 200 opened +0.1%
WBC.AU Gives Q1 update: Cash Profit A$2.04B
BOQ.AU Guides H1 (A$) Net 165-170M; Rev (NII broadly inline y/y, non-interest income -10 to -8M y/y); NIM 1.93-1.95% v 1.97% y/y; Seeing continued downward pressure across fee, trading, insurance and other income lines
BNO.AU Announces further analysis of phase II PTSD trial results: shows a statistically significant response of BNC210 in treatment of PTSD symptoms, as measured by CAPS-5 at 12 week (+54.2% during trade)
(AU) Australia sells A$400M v A$400M indicated in 2.75% June 2035 bonds, avg yield 2.3978%, bid to cover: 2.44x
(AU) Australia PM Morrison: A “sophisticated state actor” had hacked main political parties and parliament in the weeks leading up to election – press

Other Asia

DBS.SG Reports Q4 (S$) Net 1.32B v 1.22B y/y; Rev 3.25B v 3.06B y/y
(SG) SINGAPORE JAN NON-OIL DOMESTIC EXPORTS M/M: -5.7% V +6.7%E; Y/Y: -10.1% V -3.0%E
(TH) Thailand Q4 GDP Q/Q: 0.8% v 0.7%e; Y/Y: 3.7% v 3.6%e
2330.TW Guides Q1 Rev reduction of $550M, Gross margin to fall 2.6%, Op margin to fall 3.2%, EPS to fall by NT$0.42 following Impact of Fab 14B Photoresist Material Incident (Friday after the close)

North America

(US) Commerce Dept report supporting a 25% automobile tariff and other options could be released as soon as Sunday – press

Europe

(UK) PM May office confirms she will return to Brussels for more talks with EC President Juncker this coming week
(UK) PM May has been told that up to 7 cabinet members are ready to resign if she fails to prevent a no deal Brexit, which would block a vote on no deal Brexit, unless May gives her MPs freedom to vote on the issue – Telegraph
(EU) ECB’s Rehn (Finland): recent data point to a weakening economy in the euro zone, cited greater uncertainties outside the euro zone – German Press
(FR) ECB’s Villeroy (France): Timing of rate hike depends on length of current slowdown – financial press

Levels as of 12:50ET

Hang Seng +1.7%; Shanghai Composite +2.3%; Kospi +0.4%; Nikkei225 +1.8%; ASX 200 +0.4%
Equity Futures: S&P500 -0.0%; Nasdaq100 +0.0%, Dax -0.1%; FTSE100 -0.1%
EUR 1.1290-1.1325; JPY 110.46-110.58; AUD 0.7135-0.7159; NZD 0.6857-0.6894
Commodity Futures: Gold +0.3% at $1,326/oz; Crude Oil +0.5% at $56.25/brl; Copper +0.3% at $2.82/lb