General Trend:
- Japanese equity markets fluctuate after yesterday’s announcement by the BoJ regarding increased ETF purchases; Automakers and banks trade generally higher, decliners include insurance and real estate sectors
- Shanghai Composite trades flat during morning session, property sector declines while IT firms rise; Tencent gains over 3% in HK
- Australian equities rise after declines on Monday’s session; sectors moving higher include Consumer Staples, Resources and Financials
- New Zealand bond yields rise as government announced NZ$12.1B stimulus package (equals 4% of GDP), raised 2019-20 bond issuance program
- Boeing: Confirmed the company is in talks with the White House and Congress about short-term access to public and private liquidity
- HK government plans to increase its travel alerts and quarantine measures
- Macau bans non-residents (excluding China) from entering the city, effective from March 18th
- Philippines suspended stock, FX and bond trading from March 17th; The Philippine Stock Exchange said trading has been suspended until further notice
- Japan Fin Min Aso: Expects to have G7 call tonight
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.1%
- (NZ) NEW ZEALAND ANNOUNCES PHASE 1 ECONOMIC PACKAGE TO COMBAT CORONAVIRUS WORTH NZ$12.1B (4% of GDP), recession is almost certain; Treasury sees 2021 Q1 GDP at 1% due to stimulus
- (AU) RESERVE BANK OF AUSTRALIA (RBA) MAR MEETING MINUTES: Q1 GROWTH TO BE NOTICEABLY WEAKER THAN EXPECTED, HARD TO PREDICT LENGTH OF SLOWDOWN; REASONABLE TO EXPECT AN EXTENDED PERIOD OF LOW INTEREST RATES
- (AU) Australia Fin Min Cormann: Its clear stimulus needs to be scaled up and we will do more; carefully considering challenges to aviation sector
- QAN.AU To cut international capacity by ~90%, to last until at least end of May; to cut domestic capacity by 60% for the same period; taking measures to avoid major layoffs
- (AU) Reserve Bank of Australia (RBA) adds A$8.8B to banking system through repos v A$5.9B prior
- (AU) AUSTRALIA Q4 HOUSE PRICE INDEX Q/Q: 3.9% V 4.5%E; Y/Y: 2.5% V 3.0%E
- (NZ) New Zealand Debt management: Raises 2019-20 bond program to NZ$13B (prior NZ$10B), future programs are unchanged for now
- (NZ) New Zealand Treasury: Sees avg annual GDP for 2020-21 at 1%; seen rising to >5% in 2022
Japan
- Nikkei 225 opened -1.6%
- (JP) Bank of Japan (BOJ) Special market operations: Offers to buy ¥100B in 3-5 year JGBS and ¥100B in 5-10B in 5-10 years JGBs
- (JP) Bank of Japan (BOJ): Offered ~$30.3B in US dollar liquidity through its 84-day operation on Tuesday (March 17th), this is the largest amount since Nov 2008
- (JP) Japan Econ Min Nishimura: Talk of primary budget balance not compatible to the current situation
- (JP) Japan Fin Min Aso: Reiterates Govt will implement existing response packages on virus; no comment on FX; BOJ is taking appropriate steps; Japan is taking most forward looking response to virus
- (JP) Japan Olympics Min Hashimoto: Reiterates doing all possible to hold Tokyo Olympics as planned
- 7201.JP Notes production in China is back online; plants in Hubei and Henan are open
- (JP) Japan PM Abe Govt nominates Hitachi exec Nakamura to Bank of Japan (BOJ) board to replace Funo, who’s term ends June 30th
- 4507.JP To partner with Micro Blood Science on coronavirus test; financial terms not disclosed
- (JP) Japan Jan Final Industrial Production M/M: 1.0% v 0.8% prelim; Y/Y: -2.3% v -2.5% prelim
Korea
- Kospi opened -4.3%
- (KR) South Korea president Moon: Current situation is worse than 2008 crisis, all resources and tools should be mobilized for the economy
- (KR) BANK OF KOREA (BOK) CUT 7-DAY REPO RATE BY 50BPS TO 0.75% (intra-meeting move) (after the close)
- (KR) US State Dept: Reiterated commitment to a “fair and equitable” agreement on defense cost-sharing with South Korea – Yonhap
- 005380.KR Reports Feb China Sales -97% y/y – Korean press
- (KR) South Korea Vice Fin Min Kim: Cannot rule out possibilities of economic and financial crisis; To take market stabilization measures timely, will take action to prevent credit crush
- (KR) South Korea: Reports 84 new coronavirus cases in 24 hours; total cases at 8,320, death toll 81
- (KR) South Korea FSC Chairman: To hold daily meetings until stock market stabilizes
- (KR) South Korea said to review possible currency swap agreement with the US – US financial press
- (KR) South Korea to announce more comprehensive, follow up measures to stabilize markets later, including measures to ease FX funding shortage in Korea
China/Hong Kong
- Hang Seng opened -0.3%; Shanghai Composite opened +0.3%
- (CN) China PBOC may cut the loan prime rate (LPR) even though it left the MLF rate unchanged on Monday (March 16th) – China Securities Journal
- 293.HK Reports Feb Load factor 53.1% -28.6ppts; In Feb alone recorded loss of more than HK$2.0B
- (CN) China National Health Commission Coronavirus Update for March 16th: 21 additional cases v 16 prior; Additional deaths: 13 v 14 prior; Hubei: 1 additional cases v 4 prior; additional deaths: 12 v 14 prior
- (CN) China Industry Ministry (MIIT): To promote use of electric vehicles of ‘public-use’
- (CN) China PBOC sets Yuan reference rate: 7.0094 v 7.0018 prior
- (CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations for the 20th consecutive session, Net CNY0B v CNY0B prior
- (CN) China NDRC: Still have ample policy tools and will use policy reserves at appropriate time; Sees CPI low at the end of 2020, Pork prices declined every day in the past month in 36 cities
- (CN) China PBOC Vice Gov Chen: China’s financial opening is unaffected by virus, will continue fending off large inflows and outflows of short term speculative capital
Other
- (PH) Bankers Association of the Philippines suspends FX and bond trading starting March 17th
- (SG) SINGAPORE FEB NON-OIL DOMESTIC EXPORTS M/M: -4.8% V -3.0%E; Y/Y: +3.0% V -6.9%E; Electronic Exports Y/Y: +2.5% v -16.0%e; Pharmaceutical Exports +23.7% y/y
- (SG) Singapore Trade Min Chan: Prepared for food supplies disruption related to Malaysia; has 3-month stockpile for rice and noodles
North America
- BA S&P cuts rating 2 notches to BBB from A- (one notch above junk), outlook watch negative
- BA Said to be seeking short term govt aid for itself, its suppliers, and airlines; in talks with White house and lawmakers – press
- (US) TTN March 16th Avg Traffic Intensity Index in Select US cities y/y: -19.6% v -39.8% March 12th (4th consecutive decline)
- (US) City of San Francisco orders shelter in place lock down for 3 weeks to combat coronavirus (like Italy has done)
- (US) Senate Maj Leader McConnell (R-KY): Aiming to win senate passage of House passed coronavirus stimulus bill
- (US) US House overcomes procedural hurdle related to the coronavirus bill, now the legislation will be sent to the Senate – US financial press
Europe
- (UK) Chancellor of the Exchange (Fin Min) to be at PM Johnson Downing Street press conference tomorrow to help explain measures to support economy and businesses and honor PM pledge – press
- (FR) France regional election turnout was so low Sunday, that results have been scrapped and will be held in June – French press
- AIR.FR Reportedly preparing a contingency plan to slow or halt production if France is placed into further lockdown – press
Levels as of 12:15ET
- Hang Seng +0.6%; Shanghai Composite -0.3%; Kospi -1.6%; Nikkei225 +0.5%; ASX 200 +5.8%
- Equity Futures: S&P500 +3.8%; Nasdaq100 +3.4%, Dax +3.6%; FTSE100 +2.0%
- EUR 1.1189-1.1159; JPY 107.17-105.86; AUD 0.6149-0.6092; NZD 0.6096-0.6035
- Commodity Futures: Gold +1.1% at $1,502/oz; Crude Oil +4.2% at $30.24/brl; Copper +0.5% at $2.40/lb
