Little Initial Reaction Seen From China’s Inflation Data

Feb 10 20, 07:21 GMT

General Trend:

Various companies comment on China-related production, Feb 10th is seen as when companies are expected to start resuming operations following the coronavirus related halts
PBOC is due to begin offering funds under its previously announced special relending scheme, expected to issue CNY300B in loans
IT and Banking shares decline in early trading in Shanghai, property sector outperforms
Gaming companies trade broadly lower in HK
Air China declines over 2% in HK, plans to adjust its flights between China and the US due to coronavirus
Declining sectors in Japan include Marine/Transportation and Electric/Appliances
Energy and Resource firms are among the decliners in Australia
Aussie building materials firm Boral drops over 10%, noted challenging start to H2 and issued update on financial irregularities
JB Hi-Fi (retailer of consumer products) rises over 11% in Australia, raised guidance

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened -0.1%
(NZ) New Zealand Shadow Board recommends no RBNZ rate change this week
YAL.AU Expect to record impairment charge on Watagan Mining, following investigations into technical challenges at Watagan
JBH.AU Reports H1 (A$) Net 170.6M v 160.1M y/y; Rev 4.00B v 3.84B y/y raises FY20 Rev guidance
(AU) Australia Treasury expected to complete its petroleum resource rent tax (PRRT) review which could see a tax on LNG industry in order to support budget surplus, would not go into May budget, but any changes to the PRRT would protect budget surpluses beyond the 4-year outlook – Aussie press
Treasurer Frydenberg responded to the article via tweet: “speculation in the Australian around gas regulations is wrong. The review referred to was announced in November 2018 and will not be back to Government till after this year’s Budget.”
BLD.AU Updates on financial irregularities at North American windows business: Staff manipulated accounts, Pretax earnings were overstated by $24.4M from March 2018 to Oct 2019; CEO Mike Kane to retire; fires VP finance and financial controller of Windows
(AU) Storms Insurance Council of Australia: Insurers have received 10,000 claims related to most recent cyclone totaling A$45M
(NZ) Bank of New Zealand (BNZ) now sees H1 GDP at 0.6% (prior 1.3%) citing coronavirus

Japan

Nikkei 225 opened -0.8%
(JP) Japan Dec Current Account Balance (BoP): +¥524.0B v +¥464.7Be; Adj Current Account: +¥1.71T v +1.678Te
(JP) Japan Min of Fin: Dec Japan investors sold ¥212.2B sovereign Sweden bonds (most since 2006)
6758.JP All China facilities have resumed production
(JP) Bank of Japan (BOJ) announcement related to daily bond buying operation: Raises buying of 10-25 year JGBs

Korea

Kospi opened -1.2%
(KR) South Korea Jan foreign Net Investment in domestic bonds (KRW): +4.62T v -2.49T prior; Foreign Investment in local stocks (KRW): +0.41T v +0.81T prior
005930.KR Has been operating chip plant in Xi’an without suspension and will resume operations at home appliance plant in China today
005930.KR Will release 2 foldable smartphones in 2020; in 2020 targeting to sell ~2.5M Galaxy Z Flip smartphones and targeting 5M units of foldable phone sales this year – Korean press

China/Hong Kong

Hang Seng opened -1.1%; Shanghai Composite opened -0.5%
(CN) CHINA JAN CPI M/M: 1.4% V 0.0% PRIOR; Y/Y: 5.4% V 4.9%E (CPI highest level since Oct 2011); PPI Y/Y: 0.1% V 0.0%E (1st increase in PPI in 7-months)
(CN) CHINA JAN FOREIGN RESERVES: $3.116T V $3.106TE (Friday)
(CN) China National Health Commission Feb 9th: Additional coronavirus cases 3,062; Death toll of 908 v 636 Friday Feb 7th
(CN) China Hubei Coronavirus update Feb 9th: 2,618 additional cases; Death toll 91; total cases 29,631
(CN) China Finance Ministry: All levels of govt have allocated total of CNY71.9B to fight coronavirus
(CN) China PBoC Open Market Operation (OMO): Injects CNY900B in 7-day and 14-day reverse repos v skips prior; Net CNY0B v CNY0B prior
(CN) China PBOC sets Yuan Reference Rate: 6.9863 v 6.9768 prior
(CN) China Ministry of Commerce (MOFCOM): Will help foreign companies with production resumptions

Other

2354.TW Zhengzhou, China factory (which is main production point for iPhone 11 and new cheaper model) seeing longer than expected delays to return to production; when staff does return expected to be only 40-60% of normal levels – Mac Rumors
2354.TW Follow Up: Said to have received approval to resume production in Zhengzhou, still in talks with Govt to resume production in Shenzhen – China Press

North America

(US) FOLLOW UP: Pete Buttigieg awarded most Iowa delegates after Democratic caucus
(US) According to senior administration officials President Trump has proposed the FY21 budget cut US foreign aid by 21% and increase funds to counter developing economic threats from China and Russia – US press
AAPL Said to be considering delaying launch of its new cheaper iPhone due to coronavirus – China Securities Journal

Europe

(IE) Ireland election update: Fianna Fail seen taking 45 seats; Fine Gael with 36 seats and Sinn Fein with 37 seats – press
DAI.DE Expected to cut 15,000 jobs (prior announced 10,000), cost savings seen >€1.4B as a result; will also cut investments in loss making non-core projects – German press
(UK) UK Foreign Min Raab: Singapore trade deal will be one of first wave of free trade deals; takes US concerns on Huawei very seriously, still sees US trade deal in first wave

Levels as of 12:15ET

Hang Seng -0.8%; Shanghai Composite -0.1%; Kospi -0.6%; Nikkei225 -0.6%; ASX 200 -0.1%
Equity Futures: S&P500 +0.1%; Nasdaq100 +0.1%, Dax +0.1%; FTSE100 -0.1%
EUR 1.0958-1.0942; JPY 109.88-109.56 ;AUD 0.6706-0.6666; NZD 0.6418-0.6394
Commodity Futures: Gold +0.1% at $1,575/oz; Crude Oil -0.1% at $50.30/brl; Copper +0.9% at $2.57/lb