Aussie Capex Beats Ests

General Trend:

• Telecom services, IT and Financial companies decline in Shanghai
• Utilities companies outperform in Australia
• Marine/Transportation, Electric Appliance and Machinery companies underperform in Japan
• BoJ’s Suzuki said it is important to maintain powerful monetary easing
• Bank of Korea Gov reiterated not time yet to consider rate cut
• Aussie rises on better Capex data, but pares gain after China PMIs
• US/North Korea summit in Vietnam due to conclude today
• MSCI is expected to announce decision related to China stock weights on March 1st (Friday)
• China Feb Caixin Manufacturing PMI data due for release on Friday

Headlines/Economic Data

Japan

• Nikkei 225 opened -0.1%
• (JP) JAPAN JAN PRELIM INDUSTRIAL PRODUCTION M/M: -3.7% V -2.5%E (largest decline since Jan 2018); Y/Y: 0.0% V +1.3%E; Cuts assessment of industrial production, says output is ‘stalling’
• (JP) Bank of Japan (BOJ) Board Member Suzuki: Important to maintain powerful monetary easing; BOJ does not intend to raise interest rate levels now, so will act swiftly through market operations if yields rise rapidly
• (JP) Japan Labor Ministry: No systemic cover-up of incorrect data – Japanese Press
• 7203.JP Said to seek price cuts from auto parts companies for the April-Sept period – Japanese Press
• (JP) Japan Investors Weekly Net Buying of Foreign Bonds: ¥1.01T v ¥196.2B prior; Foreign Buying of Japan Stocks: -¥15.2B v -¥52.9B prior
• (JP) Japan Jan Department Store and Supermarket Sales y/y: -3.3% v -1.8%e
• (JP) JAPAN JAN PRELIM RETAIL SALES M/M: -2.3% V -0.8%E; Retail Trade y/y: 0.6% v 1.4%e
• (JP) Japan Chief Cabinet Sec Suga: Will go ahead with arranging Japan/US trade talks schedulr
• (JP) Japan MoF sells ¥2.1T v ¥2.1T indicated in 0.10% (0.10% prior) 2-yr JGBs, avg yield: -0154% v -0.167% prior, bid to cover 5.27x v 6.08x prior
• (JP) Japan Dec Vehicle Production Y/Y: -0.7% v 4.6% prior
• (JP) Japan PM Abe confirms LDP party to discuss chance of him serving a 4th term – Japanese Press

Korea

• Kospi opens -0.1%
• (KR) North Korea Leader Kim: If I wasn’t ready to denuclearize I wouldn’t be at the summit
• (KR) President Trump: Very productive talks with N. Korea Kim, no matter what happens will have a deal that is good for both US and N. Korea; Deal will likely take more than 2 days
• (KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 1.75%; AS EXPECTED
• (KR) US negotiators said to have dropped demands for North Korea to provide an inventory of its nuclear weapons and ballistic missile programs – press
• (KR) South Korea Jan Industrial Production m/m: 0.5% v 0.3%e; y/y: 0.1% v 1.2%e
• (KR) South Korea Jan Cyclical Leading Index Change: -0.4 v -0.2 prior
• (KR) South Korea Jan Retail Sales m/m: 0.2% v -0.2% prior; y/y: 4.0% v 3.0% prior
• (KR) North Korea leader Kim: Have a feeling good results will come from meeting with Trump
• (KR) US President Trump: North Korea will have economic powerhouse, look forward to helping with the economy; appreciate no testing of weapons; I’m in no rush but we don’t want testing
• (KR) South Korea FSC to ban banks form having exposures above 25% of core capital – Yonhap
• (KR) South Korea National Pension Fund: 2018 return -0.92% (first negative return since 2008)

China/Hong Kong

• Hang Seng opens -0.1%; Shanghai Composite opens -0.1%
• (US) Trade Rep Lighthizer: it’s too early to predict the outcome US-China trade talks – congressional testimony
• (CN) CHINA FEB OFFICIAL (NBS) MANUFACTURING PMI: 49.2 V 49.5E (multi-year low, 3rd consecutive month of contraction); Non-Manufacturing PMI: 54.3 v 54.5e; Composite PMI: 52.4 v 53.2 prior
• (CN) China Vice Premier Han Zheng: All regions and government departments need to get a clear picture of the country’s grain stockpiles to help ensure grain security – Xinhua
• (CN) US pressuring China to commit to monthly meetings for lower level officials, quarterly meetings at the vice ministerial level and semiannual meetings at the ministerial level that would help enforce trade deal – press
• (CN) China Jan Swift Global Payments CNY: 2.2% v 2.1% prior
• (CN) China PBoC Open Market Operation (OMO): Skips OMO operations v CNY60B injected in 7-day reverse repos prior; Net: CNY0B injected v CNY40B injection prior
• (CN) China PBoC sets Yuan Reference Rate: 6.6901 v 6.6857 prior
• (CN) China National Bureau of Stats (NBS): Real 2018 GDP per capita 6.1%; real disposable income per capita +6.5% y/y
• (CN) China PBoC Wang Jingwu (head of financial stability dept): Central bank to block transmission risks across markets, regions and borders; to prevent abnormal fluctuations and ‘resonances’ in financial market – financial press
• (CN) Various companies in China have reported goodwill impairment related losses – China Securities Times
• (HK) HK$ 1-month HIBOR +7bps to 1.00036% (highest level since Dec 2018); Overnight +62bps to 1.03893% (highest since late Jan); 3-month +1bps to 1.56732%

Australia/New Zealand

• ASX 200 opened flat
• (AU) AUSTRALIA Q4 PRIVATE CAPITAL EXPENDITURE Q/Q: 2.0% V 1.0%E
• HVN.AU Reports H1 (A$) underlying Net 209.7M v 209.4M y/y; EBITDA 383.4M v 377.8M y/y; Rev 4.0B v 3.9B y/y
• (JP) Japan Jan beef imports from TPP members increase 57% y/y – Japan Press
• (NZ) New Zealand Feb ANZ Activity Outlook: 10.5 v 13.6 prior; Business Confidence: -30.9 v -24.1 prior
• (NZ) New Zealand sells NZ$200M in Apr 2029 bonds; avg yield 1.8098% v 2.2709% prior; bid to cover 3.49x v 1.59x prior

Other Asia

• OLAM.SG Reports Q4 (S$) Net 75.3M v 265.1M y/y; Rev 8.5B v 7.2B y/y
• (JP) Bank of Japan (BOJ) signs bilateral swap agreement with India, effective immediately; Enables both countries to swap their local currencies against USD for up to $75B

North America

• (US) Former Trump attorney Cohen: regarding campaign collusion with Russians, says I wouldn’t use the word ‘colluding’; there was something odd about back-and-forth praise with Pres Putin; not really sure can answer collusion question; I am aware of other possible illegal acts by Pres Trump that are being investigated by New York federal prosecutors
• CELG Wellington Management does not support Bristol-Myers Squibb’s acquisition of Celgene
• HPQ Reports Q1 $0.52 v $0.52e, Rev $14.7B v $15.1Be
• (US) DOE CRUDE: -8.7M V +2.5ME; GASOLINE: -1.9M V -1ME; DISTILLATE: -0.3M V -2ME

Europe

• (UK) Feb Lloyds Business Barometer: 4 v 19 prior
• (UK) Parliament approves Amendment calling for vote on whether to rule out ‘no deal’ and extend Article 50; approves Amendment affirming Citizen’s Rights even in a ‘no deal’ Brexit
• (EU) ECB’s Villeroy (France): still believes normalization of monetary policy is desirable; if current downturn happens to be more durable, then ECB will adapt – press interview
• GAZP.RU Sees 2019 gas output at 495.1 BCM; said to consider paying out 50% of profit in dividends after 2020 – US financial press
• (UK) France President Macron: EU would grant a request to extend Brexit but only if UK justified its request with a clear objective (call an election, hold a second referendum, or present a new plan) – press
• (UK) Govt said to have asked EU to ringfence citizens’ rights; would protect the 3.5M EU citizens living in the UK and 1.3M UK citizens living in EU in the event of a no deal Brexit – press

Levels as of 12:50ET

• Hang Seng 0.0%; Shanghai Composite -0.5%; Kospi -1.0%; Nikkei225 -0.8%; ASX 200 +0.3%
• Equity Futures: S&P500 -0.2%; Nasdaq100 -0.3%, Dax -0.3%; FTSE100 -0.1%
• EUR 1.1364-1.1386; JPY 110.81-110.02 ; AUD 0.7130-0.7166; NZD 0.6834-0.6856
• Commodity Futures: Gold -0.1% at $1,319/oz; Crude Oil -0.2% at $56.86/brl; Copper -0.5% at $2.95/lb