General Trend:
- Japan’s Q4 GDP contracts at the sharpest annualized rate since the sales tax hike back in 2014.
- Trade-sensitive sectors lead declines in Japan (Marine/Transportation and Iron/Steel)
- Nissan’s shares continue to drop after recent financial guidance
- Small-caps (including tech companies) lead the early gains in Shanghai after easing by the PBOC; property sector lags as home price growth hits slowest pace since 2018
- Zhejiang Hisun Pharmaceutical [600267.CN] rises by 10% on regulatory approval in China related to coronavirus virus treatment
- HK sportswear company Anta Sports rises over 3% after issuing its market update, Li Ning and Xtep International rise over 2%
- Great Wall Motor rises over 4%after agreeing to buy a manufacturing plant in Thailand from GM.
- GM announced a move to scale down its operations in Thailand and Australia/New Zealand
- Financials are among the decliners in Australia, Energy and Resources sectors rise amid strength in Chinese equities
- China PBOC cut MLF rate, expected to cut loan prime rate (LPR) on Thursday (Feb 20th)
- Banks in China have provided over CNY537B (~$76.9B) of credit support as of Friday (Feb 14th) afternoon to help companies restore production (Chinese regulator)
- Chinese local governments start to rollout measures to support the resumption of production, manufacturing city Dongguan approves measures to support local companies
- Singapore and Thailand governments cut 2020 GDP and export forecasts amid expected coronavirus impact
- RBA is due to release its Feb minutes on Tuesday, RBA Gov Lowe has previously said that the central bank discussed lower rates ‘extensively’ in Feb (comments from Feb 7th)
- China considering starting purchases of US farm goods by early March, China wants to show commitment to phase one trade deal – financial press
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.1%
- (NZ) New Zealand Jan Performance of Services Index: 57.1 v 52.1 prior (highest since May 2018)
- BXB.AU Reports H1 Net $277.9M v $319.8M y/y; Op $435.5M v 429.5M y/y; Rev 2.4B v 2.3B y/y
- CTX.AU Updates on improved offer from ATD: Board considers that it is in the interests of Caltex shareholders to engage further with ATD
Japan
- Nikkei 225 opened -0.8%
- (JP) JAPAN Q4 PRELIMINARY GDP Q/Q: -1.6% V -1.0%E; GDP ANNUALIZED Q/Q: -6.3% V -3.8%E (largest annualized decline since 2014)
- (JP) Japan reports additional 70 coronavirus cases on the Diamond princess cruise ship, total on ship now 355 (largest outside of China) – press
- (JP) Japan Econ Min Nishumura: Watching for impact on coronavirus on inbound tourism and supply chain disruption; will swiftly implement emergency steps to counter coronavirus using budget reserve funds
- 7974.JP Likely to see global Switch console shortages citing coronavirus
- (JP) Japan PM Abe: Will continue to carefully examine coronavirus and sales tax hike’s impact on economy – speaking to Diet
- (JP) Bank of Japan (BOJ) Gov Kuroda: Coronavirus is the largest uncertainty for the economy – Japan press
Korea
- Kospi opened flat
- (KR) South Korea Fin Min Hong: Will provide KRW300B in support for budget carriers suffering from coronavirus; Shipping companies to receive KRW60B in aid – South Korea Press
- 005930.KR Expected to resume operations at TV factory in Tianjin, China this week after regulators give approval – Korean press
China/Hong Kong
- Hang Seng opened -0.2%; Shanghai Composite opened +0.3%
- (CN) China Fin Min Liu Kun: China will implement targeted and phased company tax cuts and reduce unnecessary government expenses
- (CN) CHINA PBOC CONDUCTS CNY200B V CNY300B PRIOR IN 1-YEAR MEDIUM TERM LENDING FACILITY (MLF) OPERATIONS AT 3.15% V 3.25% PRIOR; NET INJECTION CNY700B V CNY300B PRIOR
- (CN) China PBOC: China banks will tolerate higher levels of problem loans as part of those support efforts during coronavirus
- (CN) China CBIRC: Will accelerate approval process for production licenses to help firms resume work
- (CN) China PBOC may conduct MLF this week at a lower rate – China Securities Journal
- (CN) China Hubei province coronavirus update for Feb 16th: 1.9K additional cases v 1.84K prior, Additional deaths 100 v 139 prior
- (CN) China National Health Commission Coronavirus Update for Feb 16th: 2.0K additional cases v 2.0K prior; Additional death 105 v 142 prior
- (CN) China PBOC sets Yuan Reference Rate: 6.9795 v 6.9843 prior
- (CN) China PBoC Open Market Operation (OMO): Injects CNY100B in 7-day reverse repos v skips prior; Net drain CNY900B v CNY0B prior
- (CN) CHINA JAN NEW HOME PRICES M/M: 0.3% V 0.4% PRIOR; Y/Y: 6.3% V 6.6% PRIOR
- (CN) China Jan Foreign Direct Investment (FDI) yuan terms y/y: +4.0% v 5.8% prior
- 1928.HK Exec: Macau may allow casinos to re-open Thursday, Feb 20th – local media
Other
- (SG) Singapore Q4 Final GDP Q/Q: 0.6% v 0.1%e; Y/Y: 1.0% v 0.8%e; Cuts 2020 GDP at -0.5% to +1.5% (prior 1.5-1.9%)
- (SG) SINGAPORE JAN NON-OIL DOMESTIC EXPORTS M/M: 4.6% V -4.3%E; Y/Y: -3.3% V -3.7%E; Electronic Exports Y/Y: -13.0% v -10.5%e
North America
- GE Trump administration considering halting jet engine deliveries made by CFM International (GE/Safran) for planes in China over fears of reverse engineering – press
- GM To sell Thailand manufacturing plant to China’s Great Wall Motors; Will cease Holden sales, design and engineering operations by 2021, plans to focus on growth opportunities in specialty vehicle business; net charges of $300M; Will cut 1,500 jobs in Thailand, 828 in Australia and New Zealand
- Reminder US and Canada markets closed for holiday Monday, Feb 17th
Europe
- (US) USTR raises duties on EU aircrafts to 15% from 10%, effective March 18th; leaves tariffs on Scotch, cheese, French wine unchanged (after hours Friday)
Levels as of 12:15ET
- Hang Seng +0.5%; Shanghai Composite +1.5%; Kospi -0.1%; Nikkei225 -0.8%; ASX 200 -0.1%
- Equity Futures: S&P500 +0.2%; Nasdaq100 +0.4%, Dax +0.2%; FTSE100 +0.2%
- EUR 1.0844-1.0834; JPY 109.86-109.72; AUD 0.6730-0.6714; NZD 0.6448-0.6428
- Commodity Futures: Gold 0.0% at $1,586/oz; Crude Oil -0.0% at $52.30/brl; Copper +0.9% at $2.63/lb
