General Trend:
- Japanese equities underperform amid multiple ex-dividends, concerns that coronavirus may impact the upcoming Olympics; declining sectors in Japan include Securities, Real Estate and Marine/Transportation
- Shanghai Composite outperforms in early trading amid gains in IT and Industrial companies
- Standard Chartered issued cautious guidance due to impact of coronavirus and situation in HK
- Sectors moving lower in Australia include Energy and Consumer Discretionary
- Bank of Korea (BOK) unexpectedly left rates unchanged, elected to expand special loan program to support small companies
- Top expert in China said the coronavirus epidemic will be ‘under control’ by the end of April, the official expressed confidence in the prevention and control measures that China has taken (Chinese press)
- China’s Commerce Ministry (MOFCOM) sometimes holds its weekly press conference on Thursday (comments generally seen during the early European morning)
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -0.1%
- FCG.NZ Affirms FY20 earnings NZ$0.15-0.25/shr; Farm Gate Milk price NZ$7.00-7.60/kgMS; Cuts milk collections 1,515M kgMS (prior 1,530)
- LYC.AU Receives new 3-year Malaysian operating licence through March 2023
- (NZ) New Zealand Jan Trade Balance (NZ$): -340M v -549Me
- (NZ) New Zealand Fin Min Roberston: Coronavirus may hurt economy through 2020 – NZ press
- (NZ) Reserve Bank of New Zealand (RBNZ) Assistant Gov Hawkesby said rates are not the right response to the coronavirus – financial press
- (NZ) New Zealand Feb ANZ Business Confidence: -19.4 v -13.2 prior; Activity Outlook: 12.0 v 17.2 prior
- (AU) AUSTRALIA Q4 PRIVATE CAPITAL EXPENDITURE Q/Q: -2.8% V +0.5%E
Japan
- Nikkei 225 opened -0.8%
- (JP) Bank of Japan (BOJ) Official Kataoka (dissenter): BOJ is ready to ease without hesitation if needed, appropriate for BOJ to lower interest rates; may be good for BOJ to conduct a policy review; Japan’s price momentum has already been lost
- (JP) Japan Ruling party considering extra budget to deal with coronavirus – Nikkei
- 6501.JP Postpones planned ¥200B bond offering
- (JP) Japan Minister for the Tokyo Olympic Hashimoto: comments by IOC official Dick Pound regarding a possible cancellation were not an official announcement – speaking to lower House
Korea
- Kospi opened -0.2%
- (KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 1.25%; NOT EXPECTED; Cuts 2020 GDP at 2.1% (prior 2.3%); Decision NOT unanimous, 2 dissenters (Cho Dong-Chul and Shin In-Seok)
- (KR) South Korea and US decide to postpone joint drills – Yonhap
- (KR) South Korea Coronavirus update for Feb 26: 334 additional cases v 169 prior; Total cases 1,595
- (KR) South Korea and US hold phone talks about denuclearizing North Korea – Yonhap
China/Hong Kong
- Hang Seng opened -0.6%; Shanghai Composite opened +0.2%
- (CN) China Diplomat Wang Yi: China and Japan should stabilize industrial and supply chains; calls on South Korea to jointly stabilize supply chain
- (CN) China National Health Commission Coronavirus Update for Feb 26th: 433 additional cases v 406 prior; Additional deaths 29 v 52 prior; Hubei: 409 additional cases v 401 prior; additional deaths 26 v 52 prior
- (CN) China PBOC sets Yuan Reference Rate: 7.0215 v 7.0126 prior
- (CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations for the 8th consecutive time, Net CNY0B v drains CNY0B prior
- (CN) According to a top expert in China, the coronavirus epidemic will be under control by end of April – China Daily
North America
- (US) Former Fed Chairman Yellen: Possible coronavirus could put US into a recession, but outlook for economy looks pretty good; could have a significant impact on Europe
- (US) President Trump: Coronavirus risk to American people remains very low, ready to do whatever we need to if virus spreads, if Congress allocates more than $1.5B to coronvirus response “we’ll take it”; Not inevitable virus will spread in the US, but probably will
- (US) Vice President Pence: We know its vital for Fed and State to partner of virus; Will add additional staff at White House for coronavirus
- (US) CDC said to report first US coronavirus case of ‘unknown’ origin, according to the Washington Post;CDC later confirms the US has the first coronavirus case of unknown origin
- NTES Reports Q4 $4.03 v $2.66 y/y, Rev $2.26B v $2.9B y/y; Announces $1.0B share buyback (2.3% of market cap); cuts dividend 75.4% to $1.02 from $4.14 (indicated yield 1.18%)
- MSFT Cuts Q3 ‘more personal computing’ segment Rev to not meet prior guidance of $10.75-11.15B due to coronavirus; other guidance unchanged
Europe
- (IT) Italy Health Ministry: Italy has 400 confirmed coronavirus cases (prior 322 yesterday)
- (DE) Germany Health Min Spahn: we’re at the beginning of a coronavirus epidemic in Germany; virus infection chains in Germany can no longer all be tracked
Levels as of 12:15ET
- Hang Seng -1.0%; Shanghai Composite +0.4%; Kospi -1.0%; Nikkei225 -2.0%; ASX 200 -0.8%
- Equity Futures: S&P500 -1.4%; Nasdaq100 -1.4%, Dax -0.7%; FTSE100 -0.8%
- EUR 1.0915-1.0879; JPY 110.46-110.00 ;AUD 0.6562-0.6543; NZD 0.6301-0.6284
- Commodity Futures: Gold +0.6% at $1,652/oz; Crude Oil -1.5% at $47.98/brl; Copper +0.1% at $2.57/lb