HomeContributorsFundamental AnalysisAsian Indices Mostly Decline As US Stocks Drop By 10%

Asian Indices Mostly Decline As US Stocks Drop By 10%

General Trend:

  • Nikkei declined over 10% at one point during session; Softbank drops over 6% despite buyback announcement
  • Circuit breaker was triggered for Japan’s TOPIX Banking Index FUTs
  • Japanese equities later pare loss amid special operations by the BOJ
  • Australian equities pare losses; PM Morrison said advice to gov’t is not to ban travel from Europe
  • Chinese markets pare losses as officials announce measures
  • China announces measures to support consumption and the funding situations of key companies
  • Japan Fin Min Aso: Yen has been stable around ¥105, no need to fret over its moves
  • USD/JPY rises despite declines on Nikkei; JGB Futures decline
  • Commodity currencies (AUD/USD and NZD/USD) rise in early Asian session despite equity declines, NZ and AU government bond yields rise
  • Bank of Korea (BOK) said it is discussing whether to hold an emergency meeting; South Korea 10-year yield rises over 15bps
  • BoJ conducts another unscheduled JGB repo operation
  • BoJ also offered to buy 5-10 yr JGBs in unscheduled operation
  • RBA adds liquidity through daily repo operations

Headlines/Economic Data

Australia/New Zealand

  • ASX 200 opened -2.5% at 5,171
  • (AU) Australia PM Morrison: Notes greater community transmission of coronavirus throughout Australia; parliament will resume as ‘normal’; advice to govt is not to ban travel from Europe
  • (NZ) New Zealand Feb Manufacturing PMI: 53.2 v 49.8 prior (back into expansion)
  • VAH.AU Suspends guidance due to coronavirus; cancels all non-essential CAPEX; To further reduce capacity

Japan

  • Nikkei 225 opened -2.1%
  • *(JP) BANK OF JAPAN (BOJ) TO BUY ¥500B IN JGB REPURCHASES FUTURE DELIVERY (3rd unscheduled JGB repo operation in March)
  • 9984.JP To buyback up to ¥500B in stock (7% of shares)
  • 0001.JP Plans to halt certain foreign-currency insurance sales – Japanese press
  • (JP) Japan Olympics Min Hashimoto: IOC and 2020 organizers are not considering cancellation or postponement of the 2020 games
  • (JP) Japan Chief Cabinet Sec Suga: confirms PM Abe and President Trump spoke on phone today at the request of the US; discussed coronavirus, Olympics and the economy
  • (JP) Japan Fin Min Aso: Volatility is high in markets, see uncertainty increasing, decline in stocks does not change corporate fundamentals; will finish budget by the end of March
  • (JP) Japan Top Currency Official Takeuchi: No comment on market intervention; confirms G7 held phone conference last night, need to limit spread of virus as much as possible; will closely cooperate with G7, watch markets closely and act as needed
  • (JP) Japan Securities Clearing Corp (JSCC): Issues margin call for JGBs, TOPIX and Nikkei FUTs

Korea

  • Kospi opened -6.1%
  • (KR) BANK OF KOREA (BOK) DISCUSSING NEED TO HOLD EMERGENCY RATE REVIEW MEETING; will give further notice if decision is made
  • (KR) Bank of Korea (BOK): Closely monitoring local bond yields spiking; Will use OMO to intervene into money markets if needed; Will take steps to stabilize financial markets
  • USD/KRW South Korea currency authorities suspected to have intervened to support the Korean Won (KRW)
  • (KR) South Korea FX Authorities: Reiterates will act to stem any ‘herd-like’ behaviors or excessive moves in FX market
  • (KR) South Korea FSC Chairman: Reviewing steps to stabilize markets – Yonhap
  • (KR) South Korea Feb Export Price Index M/M: 1.2% v -0.7% prior; Y/Y: -1.8% v -2.5% prior; Import Price Index M/M: -1.3% v -0.8% prior; Y/Y: -0.9% v +2.7% prior
  • (KR) General O’Shaughnessy: North Korea’s recent engine testing suggests the regime may be ready to test a more advanced intercontinental ballistic missile that could pose a greater threat to the United States – Yonhap

China/Hong Kong

  • Hang Seng opened -7.4%; Shanghai Composite opened -4.1%
  • (CN) China National Development and Reform Commission (NDRC): China will take measures to boost consumption, will reduce import tariffs on consumer goods, to encourage regions that have car plate quota restrictions to increase quotas; to stabilize and increase property income
  • (CN) China Vice Industry Min Xin Guobin: Coronavirus epidemic globally brings uncertainty to work resumption in China
  • (CN) China Banking Regulator (CBIRC): Banking institutions have issued CNY1.4T in loans related to virus control and prevention; To encourage banks to help key supply chain companies suffering from liquidity crunch with credit lines
  • (CN) China National Health Commission Coronavirus Update for March 12th: 8 additional cases v 15 prior; Additional deaths: 7 v 11 prior; Hubei: 5 additional cases v 8 prior; additional deaths: 6 v 10 prior
  • (CN) ‘Coming’ RRR cuts may ‘swell’ liquidity and lower financing costs for small and medium-sized companies – China Daily
  • (CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations for the 18th consecutive session, Net CNY0B v CNY0B prior
  • (CN) China PBOC sets Yuan reference rate: 7.0033 v 6.6941 prior (weakest setting since Feb 28th)
  • (CN) USTR: Grants additional tariff exclusions on medical products from China
  • (CN) China auto makers said to be requesting Govt assistance after Feb sales fell 79% – press
  • 486.HK Reports Q4 Adj Net -$138M v -$17M y/y, Rev $2.49B v $2.37B y/y
  • (HK) Hong Kong said to consider stepping up its border control due to Europe and US outbreak – Local media
  • (CN) China MoF sells 30-year Bond, avg yield 3.39%; bid to cover 1.46x

North America

  • (US) New York Fed announces new $1.5T in Treasury reserve management purchases and repurchase operations to address “highly unusual disruptions” in Treasury financing markets associated with the coronavirus outbreak; to offer $500B in 3-mo repo today, and two $500B repos tomorrow; will continue $1T in repos each week for the rest of the monthly schedule; expands repo purchases beyond bills to a ‘range of maturities’
  • (US) TTN March 12th Avg Traffic Intensity Index in Select US cities y/y: -39.8% v -34.6% prior (3rd consecutive decline)
  • (US) US House Speaker Pelosi (D): Lawmakers and White House have ‘neared agreement’ on coronavirus legislative package, hopes to make an announcement on Friday (March 13th)
  • (CA) Canada Fin Min Morneau: Reiterates Canada is in a strong fiscal position to respond, expect some market volatility; still planning on presenting budget on March 30th
  • AAPL Says all 42 of its stores in China have reopened
  • CBOE To Suspend Open Outcry Trading on Chicago Trading Floor as Precautionary Measure; trading on options exchange will continue to be available in an electronic-only trading mode until further notice
  • (CA) Canada PM Trudeau wife has tested positive for coronavirus, he will remain in quarantine for 14-days, currently in good health, will not be tested as he has no symptoms

Europe

  • (BE) Belgium PM Wilmers: To close all bars and restaurants due to coronavirus
  • (IT) Italy Market Regulator: To introduce temporary short-selling ban on 85 stocks on Friday
  • (EU) ECB ANNOUNCES EXPANSIONARY MEASURES; Increase bond buying from €20B to €120B/month until end of 2020
  • (EU) ECB UPDATES STAFF PROJECTIONS: CUTS 2020 GDP FROM 1.1% TO 0.8%
  • (BE) Belgium PM Wilmers: To close all bars and restaurants, sports events, schools due to coronavirus until April 3rd
  • (EU) Eurogroup Chief Centeno: EU to make budget rules more flexible to deal with coronavirus impact – FT

Levels as of 1:20 ET

  • Nikkei 225, -3.6%, ASX 200 +4.4%, Hang Seng -2%; Shanghai Composite -1.3%; Kospi -2.3%
  • Equity Futures: S&P500 +3.2%; Nasdaq100 +3%, Dax 4.2%; FTSE100 -5.9%
  • EUR 1.1209-1.1152 ; JPY 106.01-104.50 ; AUD 0.6326-0.6231 ;NZD 0.6160-0.6084
  • Gold -1.7% at $1,563/oz; Crude Oil -0.6% at $31.31/brl; Copper -0.7% at $2.426/lb
Trade The News
Trade The Newshttp://www.tradethenews.com/
All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.

Featured Analysis

Learn Forex Trading