General Trend:
- Asian Apple suppliers trade broadly lower (decliners include Taiwan Semi, AAC Technologies, Sunny Optical, Largan, Hon Hai)
- Sectors moving lower in Japan include Electric Appliances (includes Apple’s suppliers), general weakness in tech shares weighs on Softbank
- Shanghai property index drops over 1% as PBOC said to deny that it plans to ease property loan cap
- Declining sectors in Australia include Energy and Consumer Discretionary, financials move higher
- Australian corporate earnings remain in focus, BHP rises after H1 results
- Canadians are now said to be among those from Japanese cruise ship that have coronavirus (Canadian press)
- Air New Zealand to extend some of its coronavirus-related service adjustments into early May
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -0.1%
- BHP.AU Reports H1 underlying Net $5.2B v $3.7B y/y; Underlying EBITDA $12.1B v $10.5B y/y, Rev $22.3B (cont ops) v $21.6B y/y; May cut forecast if coronavirus not well contained in March quarter
- SGM.AU Reports underlying H1 (A$) Net -34.7M v +76.7M y/y; EBIT -23.2M v +109.6M y/y; Rev 2.71B v 3.33B y/y
- COL.AU Reports H1 (A$) Net 498M* v 489M y/y; EBIT 725M v 733M y/y; Rev 19.0B v 20.9B y/y
- (AU) RESERVE BANK OF AUSTRALIA (RBA) FEB MEETING MINUTE: REVIEWED CASE FOR FURTHER RATE CUT AT FEBRUARY MEETING, FURTHER CUT COULD SPUR BORROWING AMID STRONG UPSWING IN HOUSING
Japan
- Nikkei 225 opened -0.5%
- (JP) Japan Fin Min Aso: Reiterates drop in Q4 consumption is still smaller than that seen after 2014 sales tax hike
- 7201.JP CEO: Sees challenges to cashflow and earnings for remainder of FY20; decided to cut full-year dividend to focus on business transformation and investments
- (JP) Japan Chief cabinet Sec Suga: Watching China National People’s Congress (NPC) developments, China President Xi to visit as planned
- (JP) Japan MoF sells ¥1.9T v ¥1.9T prior in 0.1% coupon 5-year JGB: avg yield: -0.144% v -0.087% prior, bid to cover: 4.49x v 4.48x prior
Korea
- Kospi opened -0.7%
- (KR) South Korea Industry Min Sung Yun-mo: key industrial sectors suffered no disruptions over the past eight months after Japan imposed restrictions on exports of 3 key industrial materials critical for chip and display industries – Yonhap
- (KR) South Korea president Moon: Economic situation is worse than expectation; ordered cabinets to prepare strong steps to help companies
China/Hong Kong
- Hang Seng opened -0.7%; Shanghai Composite opened -0.1%
- (CN) China National Health Commission Coronavirus Update for Feb 17th: 1.9K additional cases v 2.0K prior; Additional death 98 v 105 prior
- (CN) China Hubei province coronavirus update for Feb 17th: 1.8K additional cases v 1.9K prior, Additional deaths 93 v 100 prior
- (CN) Macau Secretary for Economy and Finance Lei Wai Nong: Casinos can reopen Thursday (Feb 20th), but could also be delayed for additional 30 days on conditions
- (CN) Renewed speculation that China was considering delaying the annual National People’s Congress meeting that is scheduled in March
- HUAWEI.CN Trump Administration said to consider semiconductor restrictions that would target company – financial press
- (CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations v injects CNY100B in 7-day reverse repos prior; Net drain CNY220B v CNY900B prior
- (CN) China PBOC sets Yuan Reference Rate: 6.9826 v 6.9795 prior
- (CN) China State Asset Regulator SASAC Vice Chief Hongbin: To keep SOEs operational targets despite coronavirus; impact of coronavirus on industries will mainly show in Feb
- (CN) China Trade Body: Some customers in Russia, Turkey, Middle East and North Africa have stopping accepting metal deliveries due to fears of the coronavirus
– 5.HK Reports FY19 Adj pretax $22.2B v $21.7B y/y, Adj Rev $55.41B v $53.9B y/y; cost reduction plan of $4.5B, to suspend buybacks for 2020 and 2021 - (CN) Follow Up: China to start application for tariff exemption on US goods, US products for tariff exemption applications include LNG and crude oil – US financial press (as expected)
Other
- (SG) Singapore Fin Min Keat: Singapore would not have been able to act quickly and decisively to unveil a budget with measures to tackle coronavirus challenges if not for its ‘deep reserves’; Budget will include measures that weren’t originally on the table a month ago – social media post
North America
- AAPL *Will not meet prior revenue guidance, cites coronavirus, worldwide iPhone supply is temporary constrained, though demand remains strong, production is ramping up slower than expected
- DELL Said to be close to deal to sell RSA Security business for $2.0B to private equity, STG – US financial press
- (MX) Mexico Fin Min Herrera: Mexico clearly has room to keep cutting interest rates after reaching CPI target in 2019 – financial press
Europe
- (UK) Chief Brexit Negotiator Frost: UK aims to minimize as much as it can trade friction through customs facilitation, we want a Canada type FTA with EU
- SIX2.DE Hyundai Motor said to acquire stake in Sixt for KRW1.0T – South Korean press
Levels as of 12:15ET
- Hang Seng -1.5%; Shanghai Composite -0.3%; Kospi -1.5%; Nikkei225 -1.5%; ASX 200 -0.2%
- Equity Futures: S&P500 -0.3%; Nasdaq100 -0.6%, Dax -0.5%; FTSE100 -0.5%
- EUR 1.0838-1.0823; JPY 109.91-109.66; AUD 0.6734-0.6684; NZD 0.6442-0.6406
- Commodity Futures: Gold +0.2% at $1,589/oz; Crude Oil -0.7% at $51.94/brl; Copper -0.6% at $2.61/lb