RBA Minutes Reiterated No Strong Case For Near-Term Rate Change

Mar 19 19, 05:58 GMT

General Trend:

Property shares decline in early trading in Shanghai
Tencent speculated to consider job cuts ahead of Q4 earnings report
Australian coal miner New Hope declines after H1 earnings
Australian Q4 housing prices decline at the fastest rate in years
Aussie bond yields decline after RBA minutes and housing figures
After RBA minutes, focus shifts to Aussie monthly employment data due on Thursday, includes more comments than typical on China/US trade dispute
US dollar trades generally weaker ahead of Fed meeting
US Fed to hold policy meeting March 19-20 (Tuesday-Wed)
China’s Bank of Communications (BOCOM) said to plan to reduce convertible issuance by ~50%
Brexit expected to be delayed by 9-12 months, EU expected to make formal announcement this week

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.1%
(AU) Australia RBA Assistant Gov Kent: The past year in Australia was a bit of a mixed bag in terms of issuance of fixed income securities – Bonds and Benchmarks at the KangaNews DCM Summit
WBC.AU Moves wealth and insurance units into expanded business and consumer divisions; initial estimates include one-off costs of A$250-300M
(AU) AUSTRALIA RBA MEETING MINUTES FROM MARCH 5TH: REITERATES SEES NO STRONG CASE FOR NEAR TERM ADJUSTMENT IN POLICY; `CONSIDERABLE UNCERTAINTY’ AROUND CONSUMPTION OUTLOOK
(AU) Australia 3-yr yield has fallen below RBA cash target rate of 1.50% for the first time since 2016
(AU) AUSTRALIA Q4 HOUSING PRICE INDEX Q/Q: -2.4% V -2.0%E; Y/Y: -5.1% V -5.0%E (multi year low)
GCY.AU Trading halted: Reviewing FY19 guidance, operational performance for the quarter to date being below expectation; progressing potential funding options and will provide an update on progress later this week
(NZ) New Zealand to repurchase April 2020 bonds

Japan

Nikkei 225 opened -0.1%
(JP) Japan monthly Cabinet report expected Wednesday expected to repeat that the economy is assessed as “recovering at a moderate pace” and highlight overseas risks – Nikkei
(JP) Japan to cap leverage in crypto margin trading – Nikkei
(JP) Japan Fin Min Aso: Base pay is definitely heading upwards
(JP) Japan Q4 Flow of Funds: Household Assets ¥1,830T (-1.3% y/y) – BOJ
(JP) Japan Econ Min Motegi: Hope the BOJ will keep doing its upmost towards reaching price target
(JP) Some BOJ members said to see that achieving the 2% price traget by 2021 seemed unlikely – financial press
(JP) Japan MoF sells ¥1.0T v ¥1.0T indicated in 0.50% (prior 0.50%) 20-yr bonds; avg yield 0.391% v 0.419% prior; bid to cover 4.84x v 4.67x prior

Korea

Kospi opened +0.2%
005380.KR Several US state to investigate “spontaneous fires” of Hyundai and Kia vehicles – Yonhap
(KR) South Korea Foreign Min Kang: Should consider an envoy to North Korea
005380.KR With Kia to invest $300M in India’s Ola a mobility service provider

China/Hong Kong

Hang Seng opened flat; Shanghai Composite opened +0.1%
(US) White House Hassett: still working hard on reaching deal with China but still facing differences on oversight – CNBC
Hong Kong Monetary Authority (HKMA) purchased HK$2.01B as the Hong Kong dollar (HKD) traded at the weak end of its trading band versus the US dollar
(CN) China PBoC head of financial stability Wang Jingwu: Stability of yuan exchange rate and forex reserves faces pressure; “gray rhino” risks in China’s financial sector are rising and regulators will step up efforts to control them – financial press
(CN) China Assistant Commerce Min Ren Honghin said to take array of measures to support foreign trade in 2019 – Xinhua
(CN) China PBoC Open Market Operation (OMO): To inject CNY50B in 7-day reverse repos v CNY60B in 7-day prior; Net: CNY50B injection v CNY60B injected prior
(CN) China PBoC sets yuan reference rate: 6.7062 v 6.7088 prior
(CN) China Feb FX Net Settlements (CNY): -102.3B v +103.1B prior (update)
(CN) US Senate introduces bill to ban rolling stock (railroad, bus) manufactured by Chinese companies with state ties; claims China poses clear and present danger to national security and has infiltrated rail and bus manufacturing – SCMP
0728.HK Reports FY18 (CNY) Net 21.2B v 20.4Be; EBITDA 104.2B v 105Be; Rev 377.1B v 380.8Be
700.HK To target 10% of managers for job cut, demotion; cuts expected to focus on low performers

North America

SPDR Gold Trust holdings +1.1% to 779.3 metric tons
(CA) Alberta Canada to increase crude production limit by 25.0K bps starting in May and an additional 25.0K in June (prior had called for cut to production starting June 1st) – press citing local Govt
BA CEO Dennis Muilenburg: Based on facts from the Lion Air Flight 610 accident and emerging data as it becomes available from the Ethiopian Airlines Flight 302 accident, we’re taking actions to fully ensure the safety of the 737 MAX. We also understand and regret the challenges for our customers and the flying public caused by the fleet’s grounding
CBOE Will no longer offer bitcoin futures when last contract expires in June – press

Europe

(UK) Reportedly Ministers are expecting EU to grant a 9-month extension of Article 50 on Brexit; 9-months seen as the maximum delay that will be allowed – ITV
(UK) EU to formally agree on Brexit delay this week – Guardian
(UK) PM May said to have requested a 9-12 month delay to Brexit – press
(UK) Parliament Speaker Bercow: PM May must change Brexit deal to hold third ‘meaningful vote’; May CANNOT put the same Brexit deal to a third vote
(FR) France raises counter cyclical capital buffer for banks to 0.5% from 0.25% – press

Levels as of 01:20ET

Hang Seng -0.1%; Shanghai Composite -0.1%; Kospi -0.1%; Nikkei225 -0.1%; ASX 200 -0.1%
Equity Futures: S&P500 +0.1%; Nasdaq100 +0.1%, Dax flat; FTSE100 +0.1%
EUR 1.1350-1.1333 ; JPY 111.15-111.46 ; AUD 0.7112-0.7089 ;NZD 0.6863-0.6840
Commodity Futures: Gold +0.5% at $1,307,/oz; Crude Oil -0.1%at $59.34/brl; Copper +0.1% at $2.915/lb