General Trend:
- Chinese markets fluctuate in early trade: IT and Property shares outperform, materials and financials lag
- China releases 2019 GDP, CPI targets (as expected) and outlines plans for the year
- Iron/Steel, Securities, Machinery and Electric Appliance companies weigh on Japanese market
- Softbank drops over 1%
- IHI declines over 3% in Japan, confirmed inspection related to engine parts
- Childcare firm Pigeon drops over 7% post earnings
- Fast Retailing and Adastri rise after respective monthly sales reports
- Consumer Discretionary and Resources companies weigh on the Australian equity market
- Australia Q4 exports data misses ests ahead of upcoming GDP report
- Little initial impact seen on markets from RBA statement
- Philippines Peso (PHP) weakens as CPI moves back within target
Headlines/Economic Data
Japan
- Nikkei 225 opened -0.5%
- (JP) Japan Fin Min Aso: Cashless points system will help increase spending overall and reduce demand volatility
- (JP) Reportedly Japan to ease competition rules on local bank mergers – Japanese press
- 7013.JP Confirms was inspected by Japan Transport Ministry. Reminder earlier: 7013.JP Japan Transport Ministry has probed IHI over allegations it assigned unqualified workers to check aircraft engines – Nikkei
- (JP) Japan Feb PMI Services: 52.3 v 51.6 prior; PMI Composite: 50.7 v 50.9 prior
- (JP) Japan and Turkey expect a board trade deal agreement in June – Nikkei
- 2811.JP To raises prices on large bottle drinks by 5-10%
- (JP) Japan MoF sells ¥2.2T v ¥2.2T indicated in 0.10% (prior 0.10%) 10-yr JGBs, avg yield -0.002% v -0.013% prior, bid to cover 4.25x v 4.80x prior
- 7201.JP Former Chairman Ghosn could be released by as early as today, Tokyo court accepted his bail application; bail has been set at ¥1.0B (~$8.9M) – Japanese Media
Korea
- Kospi opens -0.4%
- (KR) SOUTH KOREA FEB CPI M/M: 0.4% V 0.7%E; Y/Y: 0.5% V 0.7%E; CPI Core y/y: 1.3% v 1.1%e
- (KR) SOUTH KOREA Q4 FINAL GDP Q/Q: 1.0% V 1.0%E; Y/Y: 3.1% V 3.1%E; 2018 GDP y/y 2.7% (6-year low) v 2.7% prelim
- (KR) Moody’s cuts 2019 and 2020 GDP outlook for South Korea: Cuts 2019 GDP outlook from 2.3% to 2.1%; Cuts 2020 GDP outlook from 2.5% to 2.2%
- (KR) South Korea special envoy on nuclear issues with North Korea will travel to US for talks this week – Yonhap
- (KR) South Korea sells KRW1.75T v KRW1.75T indicated in 30-yr Govt Bonds; avg yield 2.075% v 2.085% prior
China/Hong Kong
- Hang Seng opens -0.5%; Shanghai Composite opens -0.3%
- (CN) CHINA NPC: SETS 2019 GDP TARGET AT 6.0-6.5% v ~6.5% in 2018; CPI ~3.0% v ~3.0% in 2018 (both inline with expectations); Fiscal policy to be proactive, monetary policy to be prudent; cuts VAT for some sectors and top bracket
- (CN) China may announce 3.0% cut to manufacturing VAT rate this week, which could add 0.6% to GDP this year – financial press
- (CN) CHINA FEB CAIXIN PMI SERVICES: 51.1 V 53.5E; PMI Composite: 50.7 v 50.9 prior
- 293.HK In talks to acquire shares in Hong Kong Express Airways and Hong Kong Airways from HNA Group, no deal reached yet
- (CN) China PBOC Open Market Operation (OMO): Skips OMO v skipped prior (4th consecutive skip); Net: CNY120B drain v CNY40B prior
- (CN) China PBoC sets Yuan Reference Rate: 6.6998 v 6.7049 prior
- (CN) China SASAC Official Xiao: Has not discussed plan to merge 3 state automakers; planning additional support for auto industry
- (CN) China Banking and Insurance Regulatory Commission (CBIRC) Chief Guo Shuqing: China did not manipulate yuan or engage in competitive devaluation of yuan; China and US can reach an agreement on opening financial sector
- (CN) China Commerce Min Zhong Shan: Some areas in trade talks have achieved a breakthrough; Working teams from both sides are talking right now
- (CN) Former PBOC Adviser Li: Exchange rate risk controllable this year
- (CN) China Agri Min: To give corn and soybean subsidies in 2019
Australia/New Zealand
- ASX 200 opened -0.1%
- (AU) AUSTRALIA Q4 BOP CURRENT ACCOUNT BALANCE (A$): -7.2B V -9.2BE; NET EXPORTS OF GDP: -0.2% V -0.1%E
- (AU) RBA LEAVES CASH RATE TARGET UNCHANGED AT 1.50%; AS EXPECTED; No notable changes in wording, affirms GDP and inflation outlooks
- (AU) Australia Feb AiG Performance of Services Index: 44.5 v 44.3 prior
- COL.AU Enters 50/50 JV with Australian Venue Co related to Coles’ Hotels and Queensland Retail Liquor business, to receive cash A$200M at completion of deal
- (AU) Australia Feb Final PMI Services: 48.7 v 49.3 prelim; PMI Composite: 49.1 v 49.7 prelim
- NEM.AU Confirms rejection of Barrick bid; Goldcorp combination represents superior value creation opportunity; Provides long term guidance
Other Asia
- (SG) Singapore Feb PMI: 49.8 v 50.1 prior
- (IN) President Trump: India has not assured US that it will provide ‘equitable and reasonable’ access to Indian markets
- (PH) PHILIPPINES FEB CPI M/M: +0.1% V -0.6% PRIOR; Y/Y: 3.8% V 4.0%E
North America
- (US) According to NY Fed economist study, tariffs have cost US firms and consumers $3.0B in additional tax costs, and companies an additional $1.4B in deadweight losses. A separate study noted farmers and blue collar workers in areas that voted for Trump had been the biggest victims of the tariffs.
Europe
- OPEC sources: Unlikely to make any output policy decision at its April meeting; more likely to do so in June – press
- (UK) FEB BRC LFL SALES Y/Y: -0.1% V 0.1%E
- (UK) Trade Secretary Liam Fox cancels Brexit briefings – FT
Levels as of 12:50ET
- Hang Seng -0.3%; Shanghai Composite 0.0%; Kospi -0.8%; Nikkei225 -0.6%; ASX 200 -0.4%
- Equity Futures: S&P500 -0.1%; Nasdaq100 -0.0%, Dax +0.1%; FTSE100 +0.1%
- EUR 1.1326-1.1352; JPY 111.73-111.95; AUD 0.7067-0.7093; NZD 0.6790-0.6828
- Commodity Futures: Gold +0.2% at $1,289/oz; Crude Oil -0.5% at $56.31/brl; Copper +0.8% at $2.93/lb
