Nikkei FUT Lag As Japanese Cruise Ship Remains In The Headlines

Feb 12 20, 06:51 GMT

General Trend:

Shanghai equities move between gains and losses in early trading, interest rate sensitive sectors lag (Property, Banks, Financials); IT, Industrial and Consumer Discretionary firms trade higher
HK gaming companies outperform amid the earlier gains in US-listed gaming names
Other gainers in HK include property, financial and tech shares
Japanese equities gain upon return from holiday
Softbank Group rises over 13% after judge ruled in favor of the Sprint/T-Mobile merger, earnings expected later today
Other Japanese companies due to report earnings include Renesas, JFE Holdings and INPEX.
Aussie equities rise amid focus on earnings, sectors moving higher include financials
Commonwealth Bank rises over 3.5% after earnings beat ests; Blackmores (Aussie health products co.) declines over 15% on guidance and expected coronavirus impact
Apple supplier Foxconn said to now plan to resume 80% of Chinese production in March – financial press [On Feb 5th, it was reported that Foxconn was said to see full China production resuming in late Feb]
China Aviation Regulator confirmed it will support M&A among airlines to help them deal with the coronavirus impact

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.3%
(NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE (OCR) UNCHANGED AT 1.00%; AS EXPECTED; Adjusts OCR rate path
(NZ) Reserve Bank of New Zealand (RBNZ) Gov Orr: Many signs that household spending growth is increasing; Fiscal boost eases pressure on monetary policy – post rate decision press conference
(AU) Reserve Bank of Australia (RBA) Head of Economic Analysis Heath: Outlook for consumption remains major uncertainty, see consumption rise based on tighter job market, there is a better business investment outlook partly due to mining
IAG.AU Reports H1 (A$) Net 283M v 500M y/y; Rev 9.0B v 8.6B y/y; issues more cautious guidance
CSL.AU Reports H1 (A$) Net 1.25B v 1.16B y/y; Op 1.63B v 1.55B y/y; Rev 4.91B v 4.50B y/y
BKL.AU Reports H1 (A$) underlying Net 18.0M v 34.3M y/y; Rev 302.7M v 319.4M y/y, expect impact from coronavirus
CBA.AU Reports H1 (A$) Cash profit 4.5B v 4.7B y/y; Rev 12.42B v 12.4B y/y
HZN.AU Establishes independent board committee to oversee investigation into PNG bribery allegations; Suspends CEO Michael Sheridan, Chris Hodge appointed acting CEO for the duration
(AU) Australia Feb Westpac Consumer Confidence Index: 95.5 v 93.4 prior; M/M: +2.3% v -1.8% prior
(AU) Australia sells A$1.3B v A$1.3B indicated in 2.50% Sept 2030 indexed bonds, avg yield 1.0605%, bid to cover 2.65x

Japan

Nikkei 225 opened +0.2%
(JP) Japan reports additional 39 more cases of coronavirus on cruise ship, including 1 quarantine officer, according to Japanese media; Separate Japanese press report notes 4 of the people are in ‘serious’ condition
7201.JP Will suspend production at Japan Fukuoka factory for 2-days due to disruption of supply chain related to parts
(JP) Japan Cabinet Sec Suga: Expects to have supply capacity of over 100M masks/week for coronavirus
9984.JP Goldman Sachs has invited clients to meet with Softbank’s Son, there is no indication as to what might be discussed at the meeting – NY Post

Korea

Kospi opened +0.1%
(KR) South Korea Jan Unemployment Rate: 4.0% v 3.8%e (matches the highest level since July 2019, 5th consecutive increase)
(KR) South Korea Fin Min Hong: Job uncertainty may increase due to coronavirus – Yonhap
003620.KR Parent Mahindra Exec: Have created 3-year turnaround plan, will need up to KRW450B for turnaround, expect to turn profitable by 2022
(KR) Extension of military agreement with Japan is temporary, continues to urge Japan to remove export curb measures – Yonhap

China/Hong Kong

Hang Seng opened +0.5%; Shanghai Composite opened -0.2%
(CN) China Hubei Coronavirus update Feb 11th: 1,638 additional cases v 2,097 prior; Daily death toll 94 v 103 prior
(CN) China National Health Commission Feb 11th: 2,015 additional coronavirus cases (lowest number since Jan 30th) v 2,478 prior; Daily death toll of 97 v 108 prior
(CN) China President Xi: we will complete the economic and social targets that have been set; prevention and control work on the coronavirus outbreak is having positive results
(CN) China PBOC Skips Reverse Repo operations v injects CNY100B in 7-day prior; Net CNY0B v drain CNY280B prior
(CN) China PBOC sets Yuan Reference Rate: 6.9718 v 6.9897 prior
(CN) China Guangzhou and Shenzhen Communist Party Standing Committees authorize the ’emergency requisition’ of any private property in government efforts to fight coronavirus
(CN) China Finance Ministry front loads local govt bonds; allocates CNY848B of its 2020 new local govt bond quota

Other

2354.TW Targeting to resume 50% of production in China by the end of February and 80% of production in China in March – financial press

North America

(US) FOLLOW UP: NEW HAMPSHIRE DEMOCRATIC PRIMARY RESULTS: Sanders has 26.3% of vote; Buttigieg 24.1% and Klobuchar in 3rd with 19.6%
S Judge concludes T-Mobile/Sprint merger is not reasonably likely to substantially lessen competition; rejects state AGs’ arguments
(US) National Sec Advisor O’Brien: Coronavirus could curb China Phase 1 deal agricultural purchases
AAPL Said to be considering shifting more assembly orders for iPhones set for release in H1 to factories in Taiwan in order to reduce risk of impact from coronavirus – Digitimes

Europe

(UK) BOE’s Haskel (dovish dissenter): limited policy room justifies an immediate rate cut

Levels as of 12:15ET

Hang Seng +0.8%; Shanghai Composite +0.3%; Kospi +0.6%; Nikkei225 +0.5%; ASX 200 +0.5%
Equity Futures: S&P500 +0.2%; Nasdaq100 +0.3%, Dax +0.2%; FTSE100 +0.2%
EUR 1.0923-1.0911; JPY 109.89-109.77; AUD 0.6738-0.6712; NZD 0.6478-0.6401
Commodity Futures: Gold 0.0% at $1,569/oz; Crude Oil +1.4% at $50.63/brl; Copper +0.5% at $2.60/lb