Nikkei Declines After Gain In Prior Session

General Trend:

• In Japan over 1,000 companies are trading ex-dividend today (includes Sony, Mitsubishi UFJ and Softbank)
• Japanese autos and financials trade generally lower, Iron/Steel and Marine/Transportation firms also decline
• Chinese Healthcare and Financial firms rise in early trading; IT and Telecom services companies lag
• Chinese broker GF Securities declines after weaker than expected earnings, noted losses at its multi-strategy hedge fund
• BYD declines over 4% in Hong Kong, China revised subsidy rules for new energy vehicles
• Utilities, REITs, Consumer Discretionary and Energy companies weigh on equity market in Australia
• RBNZ said it is more likely that the next rate adjustment is down (vs next move in official cash rate could be up or down prior)
• New Zealand 2-year yield declines over 10bps and Kiwi drops over 1% after RBNZ statement
• Chinese telecom ZTE may report earnings later today
• Chinese bank ICBC expected to report FY results on Thursday
• US/China due to hold trade talks in China on March 28-29th (Thursday-Friday)

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened flat
• (NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE (OCR) UNCHANGED AT 1.75%; AS EXPECTED; More likely that next rate adjustment is down
• (NZ) Following RBNZ statement money markets are now pricing in rate cut in Nov 2019 (vs June 2020 prior)- US financial press
• LYC.AU Will not engage with Wesfarmers on current terms
• (AU) Australia Labour Party Member Butler: Labour doesn’t support Govt subsidies for new coal; need stable rules on climate change to guide investment
• ECX.AU Gives market update: has received interest from a number of parties regarding the Grays and Right2Drive businesses and confirms that these businesses are for sale; Fleet and Novated- 5 months to Feb 19th Net Op income 71.0M v 72.4M y/y
• RBA Assistant Gov Kent made no comments on monetary or fiscal policy at FX conference
• (AU) Australia sells A$900M v A$900M indicated in 2.75% Nov 2029 bonds, avg yield 1.8158% v 2.1564% prior, bid to cover 2.81x v 3.0x prior

Japan

• Nikkei 225 opened -0.4%
• (JP) Japan Econ Min Motegi to meet with leaders from Seven & I, FamilyMart, Lawson and Ministop in April to ask them to consider stopping 24 hour operations amid tight labor market –

Nikkei

• (JP) Sony, Mitsubishi UFJ, Softbank as well as over 1,000 others traded in Japan are trading ex-dividend
• (JP) Nikkei poll shows 25% of Japanese business leaders expect the global economy to be in worse shape in 6-months

Korea

• Kospi opened -0.1%
• (KR) South Korea Mar Consumer Confidence: 99.8 v 99.5 prior
• (KR) US President Trump did mean to reverse day old sanctions on North Korea last week before officials stopped him and issued a cover up for his confusing announcement – Yonhap
• (KR) South Korea and US set up joint monitoring of North Korea missile plant – Korean press
• 600221.CN Cuts FY18 (CNY) Net -4.0 to -3.0B v +3.3B y/y (prior -500M)
• (KR) Bank of Korea (BoK) Quarterly Report on Regional Economies: Economy remained largely steady in some regions in Q1; manufacturing production and exports declined slightly in Seoul metro area

China/Hong Kong

• Hang Seng opened flat; Shanghai Composite opened +0.5%
• 293.HK Confirms to acquire Hong Kong Airways for HK$4.93B (HK$2.25B cash and HK$2.68B through the issue and novation of promissory loan notes)
• (CN) CHINA FEB INDUSTRIAL PROFITS YTD Y/Y: -14.0% V -1.9% PRIOR
• (CN) China PBoC Open Market Operation (OMO): Skips for 6th consecutive session; Net drains CNY0B v CNY50B prior
• (CN) China PBoC sets yuan reference rate: 6.7141 v 6.7042 prior
• 3333.HK Reports FY18 (CNY) Net 78.3B v 45.1Be, Rev 466.2B v 497.8Be
• (CN) China Q1 Beige Book notes Q1 recovery is unmistakable, profits, investment and hiring improved
• (CN) Former China PBoC Gov Zhou: Some outside criticism is useful for China as it pushes reforms
• (CN) China said to be planning more pork imports ahead of next phase of trade talks – financial press
• (CN) China revises subsidy rules for new energy vehicles; cuts subsidies to encourage development of longer range NEVs

Other Asia

• (TH) Thailand Pheu Thai said to partner with ‘Democratic Front’ of parties, claims 255 seats gives it majority in House of Representatives – financial press

North America

• (US) Fed’s Daly (dove, non-voter): Right now appropriate policy is being patient, wait to see if data will tell up or down move is needed; wage growth coming up, has not stalled out
• (US) President Trump’s nominee for Fed Stephen Moore: Fed should immediately cut rates by 50bps – NYT

Europe

• (SE) Sweden Central Bank (Riksbank) Gov Ingves: Floating exchange rate works, do not see any trend that the Krona will continue weakening – Op Ed in local press
• (IT) Italy PM Conte and President Xi sign MOU, making Italy the first western European country to sign on to China Belt and Road – SCMP

Levels as of 1:20 ET

• Nikkei 225, -0.5%, ASX 200 +0.1%, Hang Seng +0.5%; Shanghai Composite +0.4%; Kospi -0.2%
• Equity Futures: S&P500 +0.1%; Nasdaq100 +0.2%, Dax flat; FTSE100 +0.1%
• EUR 1.1278-1.1250 ; JPY 110.67-110.40 ; AUD 0.7142-0.7097 ;NZD 0.6917-0.6795
• Gold flat at $1,321/oz; Crude Oil +0.2% at $60.04/brl; Copper +0.1% at $2.865/lb