Equity Markets Extend Losses

General Trend:

• Nasdaq FUT trade limit down after Trump’s comments, Euro Stoxx 50 FUT decline by over 7% as Europe travel ban comments assessed by traders
• Trump said Europe travel ban would not impact trade
• Japanese equities decline by over 5% as the Yen strengthened, trade-sensitive Marine/Transportation index drops over 7%
• Shanghai Composite declined by over 1.3% in early trade and outperformed in Asia
• Australian equities decline amid the in line stimulus measures, declining sectors include Energy and Resources
• Australia announces ~A$17.6B stimulus package (vs A$15-20B speculated), says measures could add 1.5 pct points to GDP in Q2
• BoJ Gov Kuroda held meeting with PM Abe; There has been ongoing speculation that the BoJ is likely to ease policy at its March 18-19th meeting [central bank’s ETF purchases in focus]
• BoJ Gov Kuroda said aims to stabilize markets [comments followed meeting with Abe]
• CME announced it would close trading floor on coronavirus concerns, products will continue to trade on CME Globex
• Hon Hai (Apple supplier) said China production restart is ‘going better than expected’
• ECB to hold rate decision later today

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened -0.8%
• (AU) Australia PM Morrison: Announces A$17.63B in stimulus measures (A$11B to be deployed before the end of June 2020), will not extend beyond June 30,2021; households to receive A$750/person; Total stimulus worth A$22.9B
• (AU) Australia Treasurer Frydenberg: Stimulus package could add 1.5% to GDP in Q2; too early to judge full impact of coronavirus on economy
• (AU) Australia Fin Min Cormann: confirms Australia will not have a budget surplus in 2019/20
• (NZ) New Zealand Fin Min Robertson: RBNZ has move to move rates if needed, best way to protect economy is to contain virus, worst case will need economy wide measures
• (AU) Australia PM Morrison: coronavirus stimulus will be just under 1% of economy size, will protect jobs and business – TV interview
• (AU) AUSTRALIA MAR CONSUMER INFLATION EXPECTATION SURVEY: 4.0% V 4.0% PRIOR
• (NZ) New Zealand Govt: Lowers primary export forecast due to coronavirus: 2019/20 primary exports NZ$46.6B, +0.5% y/y (prior NZ$47.9B, +3.5% y/y)

Japan

• Nikkei 225 opened -1.8%
• (JP) JAPAN Q1 BSI LARGE ALL INDUSTRY Q/Q: -10.1 V -6.2 PRIOR; LARGE MANUFACTURING Q/Q: -17.2 V -7.8 PRIOR
• (JP) Japan Investors Net Buying of Foreign Bonds: +¥4.24T (record buying) v -¥489.7B prior week; Foreign Net Buying of Japan Stocks: -¥514.8B v -¥745.0B prior week – (JP) JAPAN FEB PPI (CGPI) M/M: -0.4% V -0.3%E; Y/Y: +0.8% V +1.1%E
• (JP) Japan Govt Spokesperson: At this point no need to declare state of emergency on coronavirus
• (JP) Japan Jan Recession Indicator: 78.6% v 81.0% prior – Japan Center for Economic Research (JCER)
• (JP) Tokyo Olympics Organizing Committee member Takahashi: Says it may be too late to decide on any postponement of the Olympics
• (JP) Bank of Japan (BOJ) Gov Kuroda: Discussed financial market moves with PM Abe, will conduct appropriate asset buying and provide ample liquidity to markets
• (JP) Japanese Government said to be considering a compilation of emergency economic measures in April on Coronavirus – press
• (JP) Bank of Japan (BOJ) likely to ease at its upcoming meeting to prevent market volatility from spiraling – financial press
• (JP) Japan MoF sells ¥900B v ¥900B indicated in 0.30% 20-year bonds; avg yield 0.2480% v 0.2320% prior; bid to cover: 3.69x v 3.99x prior
• (JP) Japan Ruling Party official Ishiba: BOJ has little room left to cut interest rates further; must boost public works spending, offer cash payouts to low income households, Japan must brainstorm plans for dealing with cancelled or postponed Olympics

Korea

• Kospi opened -1.1%
• (KR) Bank of Korea (BOK): Monetary policy direction not on board agenda today – text
• (KR) South Korea may expand its extra budget to KRW15T (prior KRW11.7T) – Korean press
• (KR) South Korea reports 114 additional coronavirus cases in the last 24-hours; Total 7,869; Death toll 66

China/Hong Kong

• Hang Seng opened -2.3%; Shanghai Composite opened -1.1%
• (CN) China National Health Commission Coronavirus Update for March 11th: 15 additional cases v 24 prior; Additional deaths: 11 v 22 prior; Hubei: 8 additional cases v 13 prior; additional deaths: 10 v 22 prior
• (CN) CHINA FEB M2 MONEY SUPPLY Y/Y: 8.8% V 8.5%E
• (CN) CHINA FEB NEW YUAN LOANS (CNY): 905.7B V 1.120TE
• (CN) CHINA FEB AGGREGATE FINANCING (CNY): 855.4B V 1.586TE; Total Social Financing (CNY): 855.4B v 5.07T prior
• 410.HK Confirm they are in discussions to explore a strategic partnership
• (CN) China PBOC sets Yuan reference rate: 6.6941 v 6.9612 prior
• (CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations for the 18th consecutive session, Net CNY0B v CNY0B prior
• (CN) China Feb Airline Passengers -84.5% y/y – CAAC
• (CN) China National Development and Reform Commission (NDRC): To curb prices in pork, vegetables and grain
• (CN) Follow Up: China Hubei Province to resume production and ease travel restrictions for 4 regions in the province – Global Times

Other Asia

• (TW) Taiwan Central Bank Gov: Economy will feel impact for coronavirus throughout the first half of the year, will affect financial system; Fiscal policy will be more effective than monetary in dealing with impact of virus
• 2317.TW Founder Gou: China production restart is ‘going better than expected’; Our major US clients are all impacted by coronavirus

North America

• (US) President Trump: To provide $200B in additional liquidity;will ask Congress to increase funding to Small Business Association by $50B; Asking Treasury to defer some tax payments; Calls on Congress for immediate payroll tax relief; Suspending all travel from Europe to US for the next 30-days, effective Friday March 13th, does not apply to UK
• (US) President Trump: Trade will not be affected by 30 day travel ban on Europe
• (US) White House Trade adviser Navarro: Payroll tax cut would be highly effective stimulus, Trump wants the payroll tax temporarily cut to zero
• (US) Trump is said to have ‘urged’ US Treasury Sec Mnuchin to put pressure on Fed Chair Powell regarding stimulus – Washington Post
• (US) March 11th Avg Traffic Intensity Index in Select US cities y/y: -34.6% v -16.8% prior (2nd consecutive decline)
• CME Closes trading floor as part of reducing large gatherings, no coronavirus cases reported on trading floor yet; products to continue to trade
• (US) House Democrats release language of second coronavirus aid package, House to vote Thursday

Europe

• (IT) Italy PM Conte: orders closure of “all” shops except for groceries and pharmacies for the entire country, bars and restaurants must close unless they can keep 1 meter distance between customers; factories can continue to work with precautions
• (UK) Feb RICS House Price Balance: 29% v 20%e (highest since April 2016)
• (EU) EU Diplomat: US govt did not coordinate travel ban or notify European officials before televised announcement
• (UK) BANK OF ENGLAND (BOE) CUTS INTEREST RATE BY 50BPS TO 0.25% (intra-meeting move) (overnight)
• (UK) Spokesperson: UK ministers likely to move to delay phase from contain phase for coronavirus response in meeting Thursday

Levels as of 1:15ET

• Hang Seng -3.8%; Shanghai Composite -1.5%; Kospi -3.2%; Nikkei225 -3.6%; ASX 200 -6.7%
• Equity Futures: S&P500 -3.2%; Nasdaq100 -3.6%, Dax -3.5%; FTSE100 -4.1%
• EUR 1.1333-1.1251; JPY 104.81-103.09; AUD 0.6492-0.6452; NZD 0.6280-0.6248
• Commodity Futures: Gold -0.4% at $1,635/oz; Crude Oil -4.6% at $31.48/brl; Copper -0.8% at $2.46/lb