General Trend:
- Shanghai market fluctuates after opening down by over 2%, tech companies are among the gainers in China and HK
- Hong Kong gaming companies drop as Macau gov’t said to consider temporary suspension of casino operations
- Japanese equity markets flat in early trading, Marine/Transportation and Securities firms are among the decliners
- Panasonic rises over 8%, battery jv with Tesla turned profitable during Q4
- Nissan said to consider resuming some of its China production after Feb 10th
- Japanese companies expected to report earnings today include Sony, Mitsubishi UFJ, Sharp, Takeda and KAO Corp. Fast Retailing is due to report monthly sales
- Consumer and Financial firms are among the gainers in Australia, lower Chinese commodity prices weigh on energy and resources sectors
- South Korean LCD companies’ production impacted by coronavirus (LG Display, Samsung Display)
- Press comments on concerns that US/China Phase 1 trade agreement could be potentially impacted by coronavirus, USTR official said has not received any requests from China to discuss changes in purchase commitments under the trade deal
- Hong Kong said to report its first death related to coronavirus (Local media)
- RBA rate cut is still fully priced in for later in 2020
- RBA remains on radar after rate decision: RBA Gov Lowe is due to hold his National Press Club address on Feb 5th (Wed), RBA is also due to release its quarterly statement on monetary policy (SOMP) on Feb 7th (Friday).
- Companies expected to report earnings during the NY morning include Cummins, ConocoPhillips, Emerson Electric, Eaton Corp, Royal Caribbean, Ralph Lauren, Sirius XM and Simon Property
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened flat
- (AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 0.75%; AS EXPECTED
- (NZ) New Zealand Dec Building Permits m/m: +9.9% v -8.4% prior
- (AU) Australia Foreign Exchange Committee: Oct Australia Avg FX Turnover $139.4B/day v $119.1B in April
- BUB.AU Gives update: Expecting disruption to outbound logistics due to coronavirus
- CMW.AU Chairman Levy to retire, effective Feb 26th, Appoints deputy chairman Leon Blitz new chairman; launches strategic review; Affirms FY20 Op profit of at least A$0.083/share, distribution per share of at least A$0.075
Japan
- Nikkei 225 opened -0.4%
- (JP) Japan Fin Min Aso: Japan Post must follow thru on improvement plant; FSA will monitor progress at Japan Post
- 6752.JP Reports 9M Net ¥178.2B v ¥173.7B y/y; Op ¥240.7B v ¥292.8B y/y; Rev ¥5.76T v ¥60.8T y/y, to offer ¥100B in bonds domestically
- (JP) Japan MoF sells ¥2.1T v ¥2.1T indicated in 0.1% 10-year JGBs: avg yield: -0.051% v -0.0050% prior, bid to cover 3.63x v 3.70x prior
Korea
- Kospi opened +0.1%
- (KR) SOUTH KOREA JAN CPI M/M: 0.6% V 0.2%E; Y/Y: 1.5% V 1.0%E (fastest pace since Nov 2018)
- (KR) South Korea Vice Fin Min: Will strengthen monitoring of false rumors in market; will ‘sternly’ take steps in case of one-sided FX moves; reviewing prepared stock market stabilization steps
- 034220.KR Halts production of LCD module fabs in Nanjing and Yantai China until Feb 9th; Guangzhou operating normally
- 005380.KR Halts some production lines in Ulsan complex due to China suppliers of wiring have delayed resuming operations after holidays amid coronavirus outbreak; may halt all production lines in S. Korea this week
- (KR) South Korea President Moon: Difficulties in exports and tourism have materialized from coronavirus
China/Hong Kong
- Hang Seng opened +0.5%; Shanghai Composite opened -2.2%
- (HK) MACAU LEADER HO IAT-SENG: CONSIDERING SUSPENDING CASINO OPERATIONS FOR AT LEAST HALF A MONTH; Need to discuss with sector, city able to afford economic cost associated with this move
- (CN) China PBOC: Liquidity injections shows resolution to boost confidence, was to steer interbank rates lower; more than expected injection to lower loan rate
- (CN) China Hubei Corona virus update for Feb 3rd: 2,345 additional cases v 2,103 prior; additional deaths 64 v 56 prior
- (CN) China National Health Commission: Confirmed cases 20,438 v 17,205 prior; Death toll of 425 v 361 prior
- (CN) Scientists have found coronavirus nucleic acid on the doorknob of a confirmed Guangzhou based patient’s house, the first case of coronavirus detected outside the human body – China Global Times
- (CN) China PBoC Open Market Operation (OMO): Injects CNY500B in 7-day and 14-day reverse repos v CNY1.2T prior; Net injects CNY400B v injection CNY150B prior
- (CN) China PBOC sets Yuan Reference Rate: 6.9779 v 6.9249 prior (weakest since Dec 30th)
- (CN) China Foreign Ministry: Hopes US provides aid it has promised on the coronavirus outbreak ‘soon’; US should refrain from ‘overreacting’ on virus outbreak
- (HK) Hong Kong said to report its first death related to coronavirus – Local media
- (CN) Analysts note that logistics restrictions in China may cut phone shipments in Q1 by 50%, many don’t see a recovery until later this year – financial press
North America
- (CN) US Trade Rep spokesperson: “USTR has not received any requests from China’s government to discuss changes in China’s purchase commitments due to the coronavirus outbreak.”
- (US) Iowa Democrats are undecided if they will release results for caucus tonight (having count tech issues, not a hack)
- (US) Fed’s Bostic (dove, non-voter): we’re doing pretty good meeting employment goals; inflation is still weak and not where we want it to be
- GOOGL CEO Pichai: YouTube has over 20M paid music and premium subs, and 2M paid YouTube TV subs – earnings call
- (US) US Commerce Dept posts final rule related to countervailing currency subsidies – US financial press
Europe
- OPEC technical panel to meet in Vienna, Austria Feb 4-5th to look at impact of coronavirus on oil demand and make a recommendation on extending current oil supply curbs beyond March or to implement deeper cuts
Levels as of 12:15ET
- Hang Seng +0.7%; Shanghai Composite +0.7%; Kospi +1.8%; Nikkei225 +0.5%; ASX 200 +0.4%
- Equity Futures: S&P500 +0.6%; Nasdaq100 +0.7%, Dax +0.6%; FTSE100 +0.6%
- EUR 1.1065-1.1056; JPY 108.79-108.55; AUD 0.6726-0.6679; NZD 0.6471-0.6450
- Commodity Futures: Gold -0.2% at $1,578/oz; Crude Oil +0.9% at $50.55/brl; Copper +1.6% at $2.55/lb
