General Trend:
- China markets reportedly to resume trading on Monday (Feb 3rd), market resumption delayed from Jan 31st (Friday) due to impact of coronavirus
- Few press articles have been seen today about impact of coronavirus on Macau’s casinos
- Fast Retailing (largest Nikkei component) said to expand temporary store closures in China amid impact of coronavirus (Japanese press)
- Trade-sensitive companies continue to decline in Japan; TOPIX Marine/Transportation and Iron/Steel indices drop over 1.5%
- Japanese chemical companies due to report earnings later today (Shin-etsu Chemical, Hitachi Chemical)
- Aussie equities decline after return from holiday, recent decline in commodity prices weighs on Resources and Energy indices
- Australia Q4 CPI data due on Wednesday, futures markets are pricing in an ~24% chance of a Feb 2020 RBA rate cut
- Australia business confidence turned negative in Dec (lowest reading since mid-2013); ,the survey has not showed clear evidence of a bushfire impact
- Companies expected to report earnings during the NY morning include Harley Davidson, Lear, Lockheed, MMM, Nucor, Pfizer, Pulte Homes, UTX and Xerox.
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -1.0%
- (AU) AUSTRALIA DEC NAB BUSINESS CONFIDENCE: -2 V 0 PRIOR (lowest reading since mid-2013); BUSINESS CONDITIONS: 3 V 4 PRIOR
- OSH.AU Reports Q4 production 7.0 MMBOE v 7.4 y/y; Rev A$446.7M v 503.1M y/y
- (NZ) Reserve Bank of New Zealand (RBNZ) Assistant Gov Hawkesby: RBNZ supports the selection of the Official Cash Rate (OCR) as New Zealand’s fall-back benchmark interest rate; Global interest rate benchmarks, such as LIBOR, play a substantial role in the valuation of financial derivatives and contracts
- (NZ) New Zealand PM Ardern confirms Sept 19th as election day
Japan
- Nikkei 225 opened -0.9%
- (JP) Japan Fin Min Aso: Reduction in bond issuance shows fiscal stance; markets would be hit by any impression fiscal stance has changed – speaking in parliament
- (JP) Japan Econ Min Nishimura: Closely monitoring impact of virus on economy as 30% of foreign tourists to Japan are from China
- (JP) Japan PM Abe nominates Marusan Securities Economist Seiji Adachi for BOJ Board to replace Harada (dissenter)
- 7201.JP S&P warns that is Renault reduces stake it could result in ratings cut if it changes the dynamics of the alliance – press
- (JP) Japan MoF sells ¥399.2B v ¥400B indicated in 0.50% 40-year JGBs, highest accepted yield 0.40% v 0.46% prior, bid to cover: 2.86x v 3.50x prior
Korea
- Kospi opened -2.4%
- (KR) South Korea Fin Min Hong: Will fund efforts to contain coronavirus within existing budget; will promptly act to stabilize markets if needed; virus impacts on economy has been limited so far
- (KR) South Korea Agriculture Ministry: World Trade Organization (WTO) has approved South Korea’s current 513% tariff rate on imported rice – Yonhap
China/Hong Kong
- Hang Seng closed; Shanghai Composite closed
- (CN) China Updates on Coronavirus: Total cases in China at 4,515 v 2,744 at the end of Jan 26th; Death toll 106 v 80 yesterday – China press
- (CN) China Hubei confirms 1,291 new cases of coronavirus; deaths total 100 (prior 76); Notes 2,714 total cases of the coronavirus [vs. 1,423 as of Jan 26th]
- 293.HK Spokesperson: Have started to offer unpaid leave option to pilots, received “substantial number of applications” for the offering
Other
- JBSS3.BR Signs MOU with WH Group to sell BRL3B of meat per year in the China market – press
North America
- AAPL Asks suppliers to make 10% more iPhones, 80M in H1 – Japan Press
- FDX S&P revises to Negative from Stable; Affirms BBB rating
- WHR Reports Q4 $4.75 v $4.30e, Rev $5.38B v $5.53Be
- XLRN Sotatercept achieved Primary and Secondary Endpoints in the PULSAR Phase 2 Placebo-Controlled Trial in Patients with Pulmonary Arterial Hypertension
- (IL) Leaks of Trump Middle East plan show he will offer Palestine a path to statehood – Washington Post
Europe
- (UK) EU’s Barnier: Believes UK and EU will need much more time to reach a trade deal
- (DE) First case of the coronavirus has been confirmed in Germany – Press
Levels as of 12:15ET
- Hang Seng closed; Shanghai Composite closed; Kospi -3.2%; Nikkei225 -0.9%; ASX 200 -1.4%
- Equity Futures: S&P500 +0.5%; Nasdaq100 +0.6%, Dax +0.4%; FTSE100 +0.2%
- EUR 1.1025-1.1015; JPY 109.05-108.83; AUD 0.6763-0.6747; NZD 0.6550-0.6536
- Commodity Futures: Gold +0.1% at $1,579/oz; Crude Oil -0.2% at $53.02/brl; Copper +0.2% at $2.60/lb
