Oil-Related Currencies Decline

Mar 09 20, 07:14 GMT

General Trend:

Energy shares trade sharply lower across Asia on move by Saudi Arabia to cut prices and increase production; CNOOC declines over 15% in HK, Santos drops more than 25% in Australia
Nikkei drops over 6% as USD/JPY falls over 2.5%; Exporters trade generally lower, Toyota declines by over 5% while Honda falls by over 7%; Sony declines over 7.5%
Shanghai Composite drops over 2% in early trading, outperforms in Asia; China again reported decline in additional cases of the coronavirus, additional deaths also declined
Shanghai Property index drops over 3%, Hainan said to tighten certain housing purchase rules
Japan’s Q4 GDP and business spending revised downwards
Japanese MOF officials are mulling whether to hold a meeting amid today’s market volatility
Various Japanese officials have characterized the market movements as ‘nervous’ [similar language was used back in 2016]

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened -1.4%
AIR.NZ Suspends all 2020 guidance due to increased uncertainty surrounding the duration and scale of the Covid-19 outbreak; CEO volunteers to take pay cut, freezes hiring and may use unpaid leave
(AU) Australia Treasurer Frydenberg: Focus of stimulus is protecting jobs and businesses, economic response to virus will be substantial; fiscal response will not undermine budget integrity
(AU) Australia Govt expected to announce A$10B stimulus package to support economy amid coronavirus outbreak, may be announced early this week – Australian press
(NZ) New Zealand Fin Min Robertson: Banks have agreed to measures to support businesses; Tax Dept and Treasury working on tax relief options; not had the advice that NZ is facing a recession, RBNZ unconventional policy not in the cards
(NZ) Reserve Bank of New Zealand (RBNZ): Watching for signs of market pressures or credit stress, have not seen any significant pressures at this stage

Japan

Nikkei 225 opened -2.0%
(JP) Japan PM Abe: Will offer interest free loans with no collateral to small and medium sized businesses impacted by coronavirus, will also support parents who have to take time off to take care of children
(JP) JAPAN Q4 FINAL GDP Q/Q: -1.8% V -1.7%E; GDP ANNUALIZED Q/Q: -7.1% V -6.6%E
(JP) Japan Jan Current Account Balance (BoP): +¥612.3B v +¥623.5Be; Adj Current Account: +¥1.63T v +¥1.66Te; Trade Balance (BoP): -¥985.1B v -¥962.0Be
(JP) Govt notes that Japan PM Abe cough recently recorded is from hay fever not coronavirus -Japan press
(JP) Japan MOF Official: Closely watching market moves with ‘greater sense of urgency’, moves are seen as nervous in currency, will consider to hold 3 party meeting to discuss markets
(JP) Japan PM Abe: North Korea thought to have fire ballistic missiles, reiterates missiles are a threat to international community; New legal framework needed to prepare for worst scenario (related to cornavirus) – speaking to parliament
(JP) Japan Fin Min Aso: See nervous moves in markets, no comment on FX intervention possibility
(JP) Japan LDP official Amara: Extra budget will be needed in the Spring
(JP) Japan Top Currency Official Takeuchi: Still considering whether to hold MOF, BOJ, FSA meeting
(JP) Japan Feb Eco Watchers Current Survey: 27.4 v 35.7e (lowest since 2011) ; Outlook Survey: 24.6 v 37.5e (lowest level since 2008)

Korea

Kospi opened -2.9%
005930.KR Fire reported at chip plant in Hwaseong, no impact on chip production – Korean press
(KR) South Korea Health Min Park Neung-hoo : The trend of coronavirus spread is “a little bit stagnant” as daily increase in new cases is declining with tests of sect members nearing completion; Sunday March 8th new cases 367 v 483 prior
(KR) North Korea fires 3 unidentified projectiles over the East Sea, that seem to be short range missiles – South Korea
(KR) South Korea Finance Ministry Officials: Currency movement too excessive in short time, closely monitoring for possible speculative FX trading

China/Hong Kong

Hang Seng opened -3.9%; Shanghai Composite opened -1.6%
(CN) CHINA JAN-FEB TRADE BALANCE: -$7.1B V +$40.0BE; Exports Y/Y: -17.2% v -15.2%e; Imports Y/Y: -4.0% v -16.6%e; China Jan-Feb Trade Surplus with the US $25.4B v 42.6B y/y
(CN) CHINA JAN-FEB TRADE BALANCE: (CNY): -42.6B V +229.0BE
(CN) CHINA FEB FOREIGN RESERVES: $3.107T V $3.109TE (3-month low)
(CN) China National Health Commission Coronavirus Update for March 8th: 40 additional cases v 143 March 5th; Additional deaths 22 v 30 March 5th; Hubei: 36 additional cases v 126 March 5th; additional deaths 21 v 29 March 5th
(CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations for the 15th consecutive session, Net CNY0B v CNY0B prior
(CN) China PBOC sets Yuan reference rate: 6.9260 v 6.9337 prior
(CN) Hainan, China tightens home purchase rules and will not allow pre-sales
(CN) China Passenger Car Association (CPCA): Guides prelim 2020 car sales -8% y/y

Other

Brent Oil Futs decline by over 30%, Saudi Aramco announced that it would cut most of its prices according to US financial press report

North America

BA FAA may request Boeing makes electrical wiring fixes before 737 Max flies again – financial press
BA FAA said to be considering fining Boeing $19.7M in civil penalties for allegedly installing equipment on hundreds of the company’s 737 aircraft containing sensors that were not approved for that equipment – US financial press
(US) President Trump aides are drafting economic measures to combat virus, including expansion of paid sick leave; has not been presented to Trump yet – financial press

Europe

(FR) France coronavirus cases now at 1,126; total deaths 19 v 8 prior; has ban all gatherings with more than 1,000 people – EU press
(IT) Italy coronavirus death toll rises by 133 to 366 v 233 prior – press
(IT) Italy government confirmed imposing 17M person (~25% of total population) quarantine in the North to fight spread of coronavirus – press
(DE) Germany Employment Min Heil: Merkel has eased short term work rules for companies due to coronaviurs – tweet

Levels as of 01:15ET

Hang Seng -4.0%; Shanghai Composite -2.7%; Kospi -4.2%; Nikkei225 -5.9%; ASX 200 -7.3%
Equity Futures: S&P500 -4.9%; Nasdaq100 -4.8%, Dax -6.3%; FTSE100 -7.1%
EUR 1.1493-1.1336; JPY 104.58-101.59; AUD 0.6626-0.6321; NZD 0.6343-0.6029
Commodity Futures: Gold +0.1% at $1,675/oz; Crude Oil -31.8% at $28.18/brl; Copper -2.4% at $2.49/lb