Chinese Banks Under Perform After Weaker Feb Lending Data

General Trend:

• The Chinese reportedly removed a trip to Mar-a-Lago from Pres Xi Jinping’s calendar (Fox Business TV report from March 8th)
• Chinese markets gained in early trading, declined over 4% on Friday
• Shanghai IT shares outperform, financials lag
• Big banks, Auto, Real Estate and Iron/Steel shares rise in Japan, Softbank gains over 2%; Marine/Transportation and brokerage firms lag
• Declines in energy and resources sectors weigh on equity market in Australia
• China PBOC Official: February money supply data slowdown is normal, in line with historical trends
• USD/JPY remains weaker after recently released US employment data
• Boeing to postpone rollout ceremony for 777X after Ethiopian Airlines plane crash
• China Regulator orders all domestic airlines to suspend use of 737 Max

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened -0.2%
• (NZ) New Zealand Local Govt Funding Agency (LGFA) cancels proposed bond auction on March 13th
• (NZ) New Zealand Feb Car Spending Retail m/m: 0.9% v 0.3%e; Total m/m: 0.1% v 2.0% prior
• APX.AU To acquire Figure Eight Technologies for $175M plus earn-out consideration of A$60-80M, payable in March 2020
• AAC.AU Reports H1 extra operating expenses A$28.5M, H2 to be similar; Overall livestock losses due to flooding, lower than anticipated
• NCM.AU Enters agreement with Imperial Metals to acquire 70% stake in Red Mine for $806.5M
• AHZ.AU Cardiocel 3D and vascucel receives regulatory approval in Europe; commercial launch expected later this month; +57% in the session
• (AU) Australia RBA paper: Low interest rates (partly reflecting lower world long-term rates) explain much of the rapid growth in housing prices and construction over the past few years

Japan

• Nikkei 225 opened +0.2%
• Omron [6645.JP]: To be added to the Nikkei 225 index, replacing Pioneer; effective March 18th
• RNO.FR Renault, Nissan and Mitsubishi in talks on a new structure for alliance – FT
• (JP) Japan Transport Ministry orders airline maintenance firms to investigate possible misconduct – Japan Press
• (JP) Economists in Japan are split on recession concerns – Japanese Press
• (JP) Japan Feb Money Supply M2 y/y: 2.4% v 2.4%e; M3 y/y: 2.1% v 2.1%e
• (JP) Keidanren chief Hiroaki Nakanishi: Govt has overstepped by giving directives on what raises companies should give employees – press

Korea

• Kospi opens +0.1%
• (KR) South Korea said to be in close communication with US following reports related to North Korea restoring rocket site – financial press
• 000270.KR Considering halting production in Jiangsu China plant (production capacity 140K units/year) due to weak sales – Yonhap
• (KR) US National Sec Adviser Bolton: US is watching North Korean activities “unblinkingly”; in response to speculation that N. Korea could be preparing for another missile test – Yonhap
• (KR) South Korea March 1-10 Exports -19.1% y/y; Imports -15.4% y/y
• (KR) South Korea sells KRW1.5T v KRW1.5T indicated in 5-yr Govt bonds, avg yield 1.86% v 1.84% prior

China/Hong Kong

• Hang Seng opens +0.1%; Shanghai Composite opens flat
• (HK) Hong Kong Monetary Authority (HKMA): On March 8th sold US dollars for Hong Kong dollars of HK$1.51B as HKD traded at weak-side of US dollar trading band; notes significant widening in the interest rate gaps between the HKD and USD
• (CN) CHINA FEB CPI Y/Y: 1.5% V 1.5%E (13-month low); PPI Y/Y: 0.1% V 0.2%E
• (CN) CHINA FEB NEW YUAN LOANS (CNY): 885.8B V 975BE; Outstanding Loan Growth y/y: 13.4% v 13.4% prior
• (CN) CHINA FEB M2 MONEY SUPPLY Y/Y: 8.0% V 8.4%E; M1 MONEY SUPPLY Y/Y: 2.0% V 0.4% PRIOR; M0 Money Supply Y/Y: -2.4% v 17.2% prior
• (CN) China PBOC Official: February money supply data slowdown is normal, in line with historical trends
• (CN) China Feb Total Social Financing (CNY): 703B v 1.45Te
• (CN) China PBoC Gov Yi Gang: China faces financial sector challenges, world economy is facing downward pressure, will never devalue currency to boost exports; room to cut RRR to help reduce risk of sharper slowdown
• (CN) China PBoC Deputy Gov Pan: Will keep liquidity ample and set up counter cyclical adjustments; Will take timely measures on arbitrage activities in bill financing and curb risks (comments from yesterday)
• 2386.HK Reports FY18 (CNY) Net 1.7B v 1.1B y/y; Rev 47.0B v 36.2B y/y
• (CN) China Pres Xi reportedly removes visit to Mar-a-Lago from US trip itinerary – US Press
• (CN) China Vice Commerce Minister Wang Shouwen suggested extra tariffs [on China goods] should be lifted by the US if both sides resolve the remaining issues in trade talks – Japanese Press
• (CN) China PBoC Open Market Operation (OMO): Skips OMO (8th consecutive skip); Net: nil v nil prior
• (CN) China PBoC Sets Yuan Reference Rate: 6.7202 v 6.7235 prior
• (CN) China Feb Retail vehicle sales 1.19M units, -18.5% y/y (released on March 8th)
• (HK) Hong Kong Monetary Authority (HKMA): On March 8th sold US dollars for Hong Kong dollars of HK$1.51B as HKD traded at weak-side of US dollar trading band; notes significant widening in the interest rate gaps between the HKD and USD

North America

• (US) Fed Chair Powell: Reiterates Fed does not feel any hurry to change interest rates again; – Watching retail sales after weak Dec, some evidence sales rebounded in Jan – ’60 Minutes’ interview
• MLNX Said to be close to being acquired by NVIDIA in $7.0B cash deal – US financial press
• BA Ethiopian Airlines flying a new Boeing 737 Max, cashes shortly after takeoff, killing 157 people (2nd crash of the new 737 Max recently)
• BA China Govt requested all domestic airlines suspend use of 737 Max (after most recent accident), impacting 96 planes – Chinese press
• (VE) Venezuela on its 4th day of nationwide blackout, reports of no cellphone reception, food rotting in stores, lines for fuel and water – press
• DIS “Captain Marvel” top movie at the N. American box office with $153M in sales
• (US) Fed Chair Powell: downside risks to the economic outlook have increased; more economies started slowing 6 months ago – comments at Stanford over the weekend
• (US) White House: President Trump to request avg of 5% cut to non-defense spending in FY2020 budget; budget expected to be released on Monday from 11:30 AM (EST)

Europe

• (UK) Bank of England (BOE) tightens bank liquidity buffers before Brexit; banks should assume they will not be able to exchange dollars and pounds and model balance sheets accordingly – Financial News
• (UK) EU said to prepare multi-billion pound increase on divorce payment from the UK in return for Brexit delay, EU said to consider multi-billion pound increase to the £39B divorce payment – Telegraph
• (UK) MPs warn PM May: Brexit vote must be put on hold – UK Press

Levels as of 01:20ET

• Hang Seng +0.6%; Shanghai Composite +1.5%; Kospi -0.0%; Nikkei225 +0.3%; ASX 200 -0.4%
• Equity Futures: S&P500 +0.1%; Nasdaq100 +0.1%, Dax -0.0%; FTSE100 -0.7%
• EUR 1.1223-1.1239; JPY 110.88-111.17; AUD 0.7027-0.7046; NZD 0.6788-0.6808
• Commodity Futures: Gold -0.1% at $1,297/oz; Crude Oil +0.4% at $56.30/brl; Copper -0.0% at $2.89/lb