USD/JPY Declines Ahead Of Fed Chair Powell’s Testimony

Feb 26 19, 07:47 GMT

General Trend:

Shanghai Composite rises in early trading as IT and property shares gain
Chinese telecom services and brokerage firms pullback from Monday’s gains
Apple supplier AAC Technologies declines over 12% in Hong Kong, issued profit warning
Standard Chartered now targeting tangible ROE of at least 10%, raises dividend
Japanese equities weighed down by Electric Appliance, Machinery and Financial companies
Consumer Discretionary, Resources and Financial shares weigh on Australian market
China NDRC: New construction starts may fall, manufacturing investment may face some downward pressure in H1
Korean Won (KRW) declines, upcoming US/North Korea summit in focus (Feb 27th-28th)
Indian Rupee (INR) weighed down by geopolitical concerns related to Pakistan
British pound (GBP) rises in Asian trading , PM May speculated to propose to formally rule out a ‘no-deal’ Brexit (UK Press)
Fed Chair Powell due to give Congressional testimony on Feb 26-27th (Tuesday-Wed), Tuesday’s testimony before the Senate expected to begin at 10 am EST
Australia Q4 construction work done data due for release on Wednesday (Feb 27th)

Headlines/Economic Data

Japan

Nikkei 225 opened +0.1%
9201.JP Expects FY19 net -17% y/y at ¥114B, Op Net -3% y/y at ¥170B; To apply for a budget carrier license in March, service to start next year – Nikkei
(JP) Japan Fin Min Aso: Corporate cash should be spent on R&D or shareholders
(JP) Bank of Japan Gov Kuroda (BOJ): China economy has been slowing down, and very significantly since second half of 2018
4589.JP Rises by over 25% after Nikkei reports plans to raise prices on agricultural equipment sold in the US
(JP) Bank of Japan (BOJ) Jan Core CPI Y/Y: 0.5% v 0.4% prior

Korea

Kospi opens -0.1%
(KR) US and North Korea remain apart on an agreement over extent of nuclear inspections – Korean press
(KR) US White House: Trump to have initial meeting with North Korea Kim on Wed evening in Vietnam, ‘follow-ups’ are expected on Thursday
(KR) South Korea Feb Consumer Confidence: 99.5 v 97.5 prior

China/Hong Kong

Hang Seng opens flat; Shanghai Composite opens +0.3%
(CN) President Trump: Will have a signing summit with China on Trade (Note: no specific details provided)
(CN) China Jan soybean imports from US 135.8Kt v 69.3Kt m/m v 5.8Mt y/y
(CN) China Banking and Insurance Regulatory Commission (CBIRC): Q4 Non-Performing Loan (NPL) ratio for commercial banks 1.83% v 1.87 prior; Outstanding bad loans CNY2.03T v 2.04T prior
(CN) China Banking and Insurance Regulatory Commission (CBIRC): Large state owned lenders, should see loans to small and micro firms for amounts CNY10M or less, to rise 30% y/y or more in 2019 v +21% in 2018 – Xinhua
(CN) China Banking and Insurance Regulatory Commission (CBIRC) Deputy Chair Wang Zhaoxing: The risk of a financial meltdown in China’s economy has been largely avoided – SCMP
(CN) China PBoC sets Yuan Reference Rate: 6.6952 v 6.7131 prior
(CN) China PBoC Open Market Operation (OMO): Injects CNY120B in 7-day reverse repos v CNY40B injected in 7-day reverse repos prior; Net: CNY120B injected v CNY40B injection prior

Australia/New Zealand

ASX 2 00 opened -0.2%
(AU) Australia ANZ Roy Morgan Weekly Consumer Confidence: 114.1 v 115.2 prior
BLY.AU Reports FY18 Net -$43.5M v -$150M y/y; Rev $770.2M v $739.1M y/y
CTX.AU Reports FY18 (A$) RCOP Net 558M v 638M y/y; EBIT 829M v 929M y/y; Rev 21.7B v 16.3B y/y; starts A$260M buyback
SDA.AU Reports FY18 (A$) underlying Net 48.1M v 5.9M y/y; EBITDA 132.0M v 60M y/y; Rev 623.1M v 304.9M y/y
IPL.AU Guides negative impact to EBIT of A$100-120M related to outage in Queensland
(AU) Australia Govt: To review operation of milk price index
(NZ) RBNZ Dep Gov Bascand: Bank capital plan could reduce Govt borrowing costs

North America

(US) Fed’s Vice Chair Clarida (moderate, voter): Now a good time to review Fed policy framework; Fed can afford to be patient with inflation remaining muted
TSLA SEC said to ask judge to hold Musk in contempt for violating deal, cites Feb 19th Tweet by Musk regarding production – US financial press
(US) US Trump: US farmers will benefit if deal made with China

Europe

(UK) Prime Min May reportedly will propose formally ruling out a no-deal Brexit, which could lead to postponement of March 29 Brexit date by several months – UK’s The Sun
(UK) UK planning to pay “billions” to EU even in a “No Deal” Brexit – Telegraph
STAN.UK Reports FY18 adj Pretax $3.86B v $3.01B y/y, underlying Op $14.9B v $14.3B y/y

Levels as of 12:50ET

Hang Seng -0.5%; Shanghai Composite +0.5%; Kospi -0.4%; Nikkei225 -0.4%; ASX 200 -0.9%
Equity Futures: S&P500 -0.3%; Nasdaq100 -0.5%, Dax -0.2%; FTSE100 -0.3%
EUR 1.1352-1.1372; JPY 110.76-111.08 ; AUD 0.7151-0.7174; NZD 0.6875-0.6889
Commodity Futures: Gold +0.1% at $1,330/oz; Crude Oil -0.6% at $55.16/brl; Copper -0.2% at $2.94/lb