General Trend:
- Shanghai Composite weighed down by declines in IT and Telecom Services indices
- Australia’s Consumer Staples index drops over 2%, Woolworths declines over 5% post earnings
- Iron ore miner Fortescue rises over 4%, reported H1 results and declared special dividend
- Automakers trade generally higher in Japan, Japanese gov’t said to seek to put together US trade deal parameters before May summit (Japanese press)
- Japan exports decline for second straight month in Jan, exports to China -17.4% y/y
- Japan 2-yr JGB yield trades at lowest level since Nov 2017
- Chinese Yuan (CNY) rises, US officials are reportedly seeking a stable yuan pledge as part of the China trade deal talks (press)
- China PBoC to launch first bill swap operation later today
- Australia 3-year bond yields decline after Q4 wage data
- US Fed minutes due to be released as scheduled on Wed, despite weather advisory in D.C.
Headlines/Economic Data
Japan
- Nikkei 225 opened +0.2%
- 9508.JP President: Considering cutting power bills for households – Nikkei
- (JP) Japan Economy Min Motegi: Currency clause not discussed Sept 2018 with US; talks with US haven’t started – speaking in Diet
- (JP) Japan Fin Min Aso: have never directly talked about currency with US Treasury Sec Mnuchin; reiterates currency moves decided by the market -speaking in diet
- (JP) Japan PM Abe: Agreed with Trump not to talk about currencies, currency discussion is in the realm of the MoF – speaking in Diet
- (JP) Bank of Japan (BOJ) Gov Kuroda: Do not believe current BOJ policy is weakening yen, BOJ monetary policy is not targeting yen, believe this is understood by US and other countries – speaking in Diet
- 7203.JP Said to agree to H1 price increase for specialty steel – Japanese Press
- (JP) JAPAN JAN TRADE BALANCE: -¥1.42T V -¥1.03TE; ADJ TRADE BALANCE: -¥369.9B V ¥150.7BE; Exports y/y: -8.4% v -5.7%e (fastest decline since Oct 2016); Imports y/y: -0.6% v
- 3.5%e; Exports to US +6.8% y/y; China -17.4% y/y; Asia -13.1% y/y, Europe -2.5% y/y
- (JP) Japan wants to hash out parameters of US trade deal before summit in May – Nikkei
Korea
- Kospi opens +0.5%
- (KR) Pres Trump: looking forward to a good meeting with North Korea’s Kim; I want denuclearization in North Korea, but not in a particular hurry
- (KR) South Korea President Moon: Needs to be increased efforts to further expand bilateral cooperation with India – Yonhap
- South Korea prosecutor has raided offices of Hyundai/Kia quality division in Southern Seoul
- (KR) South Korea industrial city of Uslan Q4 unemployment rate 4.5% v 2.9% prior (Uslan is the highest among eight major cities and nine provinces)
China/Hong Kong
- Hang Seng opens +0.6%; Shanghai Composite opens +0.2%
- (CN) China PBoC to implement CNY1.5B 1-yr bill swap operation today, coupon rate will be 2.45%
- (CN) China PBoC sets Yuan Reference Rate: 6.7558 v 6.7642 prior
- (US) US Senator Portman said he sees ‘partial’ US/China trade deal by March 1 deadline, expects trade talks to continue past the deadline without Trump raising tariffs on China – HK Press
- (CN) China PBoC Open Market Operation (OMO): Injects CNY20B in 7-day reverse repos v skips prior (1st injection after 7 skips); Net CNY20B injection v nil prior
- (CN) China Top Content Regulator said to have asked local officials to stop submitting new video game licence applications – financial press
- (CN) US officials reportedly seeking a stable yuan pledge as part of China trade deal talks, said to have reached a tentative agreement to include it in trade deal – press
- (US) President Trump: China trade talks are going well; March 1st is NOT a magical date
- (AU) China has recruited the services of former police detectives in Australia and other Western countries to help it recover millions of dollars in alleged “hot money” taken out of the country, called “Project Dragon” – Aussie press
- (CN) China FX Regulator SAFE Deputy Dir Lu Lei: China must address its domestic imbalances to strengthen its ability to weather the impact of external risks such as the trade war with US; rapidly rising household debt is the biggest threat to China’s economy – Caixin
- 293.HK Guides FY18 Net ~HK$2.3B v -HK$1.26B y/y, record high; benefited from capacity growth
Australia/New Zealand
- ASX 200 opened +0.1%
- (AU) AUSTRALIA Q4 WAGE PRICE INDEX Q/Q: 0.5% V 0.6%E; Y/Y: 2.3% V 2.3%E
- WOW.AU Reports H1 (A$) Net 979M v 973Me; EBIT 1.53B v 1.5Be; Rev 30.6B v 30.6Be; to return up to A$1.7B in capital to shareholders
- (AU) Australia Treasury Sec: Additional declines in housing prices could weaken consumer spending; commodity prices are higher than at mid-year report; more risk to economic outlook on balance
- FMG.AU Reports H1 Net $644M v $681M y/y; adj EBITDA $1.6B v 1.8BB y/y; Rev $3.54B v $3.68B y/y; declares special dividend of A$0.11
- WOR.AU Reports H1 (A$) underlying Net 98.4M v 78.2M y/y; EBIT 133.9M v 109.3M y/y; Rev 2.65B v 2.41B y/y
- (AU) Australia Jan Skilled Vacancies m/m: 1.3% v 0.7% prior
- (AU) Australia sells A$900M v A$900M indicated in 2.50% May 2030 bonds, avg yield 2.1472% v 2.2814% prior, bid to cover 3.39x v 3.13x prior
- (AU) According to Australia Foreign Investment Review Board China is no longer the largest source of proposed investment in Australia, being surpassed by the US for the first time since 2012/13
- (AU) Some in China and Hong Kong said to be concerned about possible increase in the capital gains tax on property investments in Australia – HK Press
- (NZ) New Zealand Q4 PPI Input q/q: 1.6% v 1.4% prior; PPI Output q/q: 0.8% v 1.5% prior
North America
- (US) President Trump; China trade talks are going well; March 1st is NOT a magical date
- (US) Fed’s Williams (moderate, voter): monetary policy is where it ought to be with rates around neutral; new patient Fed stance doesn’t mean not hiking rates or that policy is set for all time.
- TSLA Musk: by the end of 2019 annualized production ~500K (10 cars/week); 4000 Tesla cars are loading in San Francisco for Europe – tweet
Europe
- (UK) UK Chancellor of the Exchequer Hammond (Fin Min): ‘Malthouse’ initiative is a valuable effort to allay backstop concerns in the future
- (UK) PM May said to be considering plans to bring forward the meaningful vote on her Brexit deal to next week in bid to see off threat of ministerial resignations – financial press
Levels as of 12:50ET
- Hang Seng +0.8%; Shanghai Composite -0.4%; Kospi +0.9%; Nikkei225 +0.5%; ASX 200 -0.2%
- Equity Futures: S&P500 -0.1%; Nasdaq100 -0.1%, Dax -0.1%; FTSE100 +0.0%
- EUR 1.1335-1.1359; JPY 110.53-110.93; AUD 0.7152-0.7177; NZD 0.6865-0.6886
- Commodity Futures: Gold +0.1% at $1,345/oz; Crude Oil +0.1% at $56.49/brl; Copper +0.1% at $2.88/lb
