Asian Indices Trade Mixed, Japanese Equities Lag After Recent Gains And Move By Tokyo To Go On Lockdown

General Trend:

• Sectors declining in Japan include Iron & Steel, Marine Transportation and Real Estate; Softbank drops over 8% after recent gains
• Australian equities outperform, sectors moving higher include Energy and Consumer Discretionary while Financials lag
• Shanghai Composite trades flat during morning session, Banks rise while Telecom firms decline
• Commodity currencies trade generally lower in Asia, Crude Oil and Copper prices also move lower
• BoK to offer ‘unlimited’ amount of liquidity through its temporary weekly repo operations, Korean bond yields decline by over 10bps
• Singapore’s gov’t cut 2020 growth forecast, Q1 growth contracted more than expected
• G20 leaders are expected to hold video conference later on Thursday (March 26th), Trump and Xi are expected to participate in the video conference

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened +0.7%
• (AU) Reserve Bank of Australia (RBA) adds A$2.69B to banking system through repos v A$2.43B prior
• (AU) Reserve Bank of Australia (RBA): Excess cash at exchange settlement (ES) accounts at A$59.3B v A$53.6B prior
• (AU) Reserve Bank of Australia (RBA): To place on hold review of retail payments regulation
• VAH.AU CEO: Of the 8,000 staff that have been stood down, 1,000 will be laid off – local media
• FLT.AU Announces job cuts, 6.0K jobs to be stood down; cuts board and executive pay by 50%; to close 30% of Australia leisure outlets
• (AU) South Australia will announces A$650M stimulus package aimed at jobs – press
• (AU) Australia sells A$2.0B v A$2.0B indicated in June and Sept 2020 notes
• (AU) Australia Stats office: Businesses are reporting widespread impacts from coronavirus; 50% surveyed note an adverse impact starting mid-March; 86% expect to be impacted in future months
• (AU) Reserve Bank of Australia (RBA) lent A$0.05B in 84-day USD repo operation
• (NZ) New Zealand sells NZ$250M v NZ$250M indicated in April 2025 bonds, avg yield 0.7627% v 0.9668% prior, bid to cover 2.8x v 2.8x prior

Japan

• Nikkei 225 opened -1.6%
• (JP) Japan govt has started talks on ¥56T (~10% of GDP) economic stimulus package that would include ~¥200-300K cash payments to households; seen going into effect in May – Nikkei
• (JP) Japan Feb PPI Services Y/Y: 2.1% v 2.2%e
• (JP) Olympic Committee (IOC) looking at rescheduling games to July or August of 2021 in Tokyo – Japan press
• (JP) Delayed Olympics to cost Japan an additional $2.7B – Nikkei
• (JP) Japan Investors Net Buying of Foreign Bonds: -¥65.7B v -¥595.1B prior week; Foreign Net Buying of Japan Stocks: -¥1.5T v -¥1.2T prior week
• 8002.JP Cuts FY19/20 guidance Net to -¥190B v ¥200B prior; notes charges related to oil & gas and other operations
• (JP) Japan Econ Min Nishimura: Will set up a panel to consider emergency declaration; PM Abe instructed to move quickly on panel
• (JP) Japan MoF sells ¥400B v ¥400B indicated in 0.50% 40-year JGBs, highest accepted yield 0.45% v 0.40% prior, bid to cover: 2.66x v 2.86x prior (lowest BTC since Aug 2015)

Korea

• Kospi opened -0.3%
• (KR) South Korea Vice Fin Min Kim: FX Liquidity Coverage Ratio (LCR) to be cut to 70% (prior 80%) for the next 90-days; Local credit markets and short term lending markets are facing liquidity issues; FX reserves may be temporarily be reduced as they will be used to inject liquidity
• (KR) South Korea said to be considering easing capital gains tax for large shareholders – Korean press
• (KR) Bank of Korea (BOK): Planning weekly repo purchase system; to provide unlimited liquidity for 3-months starting in April
• (KR) South Korea reports 104 additional coronavirus cases in the last 24-hours v 76 prior; Total 9241 v 9137 prior; total deaths 131 v 126 prior

China/Hong Kong

• Hang Seng opened +0.3%; Shanghai Composite opened -0.7%
• (CN) China Retail Car sales in 3rd week of March -40% y/y – PCA (Industry Association)
• (CN) China Fin Min Liu Kun: China proactive fiscal policy will play a bigger role in improving quality and efficiency and supporting the expansion of domestic demand; remain confident of maintaining stable and healthy economic development – comments from recent G20 meeting
• (CN) China National Health Commission Coronavirus Update for March 25th: 67 additional cases (all imported) v 47 prior; Additional deaths: 6 v 4 prior; Hubei: 0 additional cases v 0 prior; additional deaths: 6 v 3 prior
• (CN) USTR to grant more tariff exclusions for medical products from China; including refillable dispensers, sterile urology drain bags, ice bags and wristbands
• (CN) China PBOC sells CNY10B v CNY10B indicated in 6-month bills in Hong Kong; avg yield 2.19% v 2.89% prior
• (CN) China PBOC sets Yuan reference rate: 7.0692 v 7.0742 prior
• (CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations for the 27th consecutive session, Net CNY0B v CNY0B prior

Other

• (SG) SINGAPORE Q1 ADVANCED GDP Q/Q: -10.6% V -8.1%E; Y/Y: -2.2% V -1.5%E; Cuts 2020 GDP from -0.5% to +1.5% to -1.0% to -0.4%, due to coronavirus
• (SG) Singapore Feb Industrial Production M/M: -22.3% v -15.8%e; Y/Y: -1.1% v -3.2%e

North America

• (US) SENATE VOTES TO PASS $2.0T CORONAVIRUS STIMULUS BILL; AS EXPECTED; UNANIMOUSLY; US House Majority Leader Hoyer (D): The House will vote Friday via voice vote
• (US) House Speaker Pelosi (D-CA): Optimistic stimulus bill will pass in the House
• (US) Treasury Sec Mnuchin: Stimulus will unlock $4.0T for US Fed and Treasury; Stimulus should cover 3 months; expect bill to pass in senate tonight
• (US) President Trump: Large sections of the US can re-open faster than others; Independent Contractors and Self Employed to be eligible for unemployment benefits; Will sign relief package the moment it gets to his desk; Open to more stimulus if needed
• (US) House Speaker Pelosi (D-CA): House could act as soon as US Senate passes the stimulus, but do not think the House can pass stimulus bill under unanimous consent; House will give its members at least 24 hours’ notice before voting on bill (likely to be Thursday)
• (US) FAA: To grants training waivers for pilots, flight attendants and dispatchers, to airlines due to coronavirus
• BA Close to $60B support agreement for itself and suppliers with US Govt – financial press
• (US) Senator Graham (R-SC): Likely that stimulus bill will be passed in Senate tonight, looks like we will likely break the “logjam”
• (US) TTN March 24th Avg Traffic Intensity Index in Select US cities y/y: 10.6% v 9.0% prior (2nd consecutive increase)

Europe

• (UK) COVID-19 cases in UK rise to 9,529 v 8,077 prior, +17.9% (v +21.5% yesterday); death toll at 463 v 422 prior
• (DE) Germany Fin Min Scholz: doesn’t look like there will be a financial crisis for Germany
• (UK) Manufacturer Dyson Ltd says it has received initial order for 10K ventilator units from UK govt; will be ready in early April

Levels as of 1:15ET

• Hang Seng -0.4%; Shanghai Composite -0.1%; Kospi +1.2%; Nikkei225 -3.5%; ASX 200 +2.3%
• Equity Futures: S&P500 -0.8%; Nasdaq100 -0.6%, Dax -1.2%; FTSE100 -1.6%
• EUR 1.0934-1.0870; JPY 111.31-110.45; AUD 0.5959-0.5870; NZD 0.5854-0.5777
• Commodity Futures: Gold -0.6% at $1,623/oz; Crude Oil -1.2% at $24.19/brl; Copper -1.0% at $2.19/lb