HomeContributorsFundamental AnalysisAsia Trades Lower After US Declines, Drop In Oil Prices

Asia Trades Lower After US Declines, Drop In Oil Prices

General trend

  • Asian equities opened mostly lower; Markets are currently still lower, but off of session lows
  • Australia ASX 200 has lagged [lower commodity prices weighed on Energy and Resources indices]; Nikkei is closer to the opening level;
  • Oil producers are trading broadly lower; Declines in Consumer names [Kweichow Moutai] continued to weigh on Shanghai; Property indices outperform in Shanghai and HK; Hang Seng TECH index extends decline; Air Transportation index declines in Japan despite lower oil prices, Marine Transportation index rises
  • WTI crude oil declined over 3% in Asia, later pared some of loss; Power has been restored to additional people in Texas; Mexico plant interruptions persist (LG Electronics, Toyota Motor)
  • Earnings reactions: [Australia]: QBE Insurance, Lovisa, Inghams, Cochlear, Goodman Group rise; [US]: Walmart declined by over 6% during US session, AMAT rose 4% in afterhours
  • Companies expected to report during the NY morning include Deere and Co., Magna International, Moneygram
  • RBNZ is due to release its monetary policy statement on Feb 24th (Wed)

Headlines/Economic Data

Australia/New Zealand

  • ASX 200 opened -0.2%
  • (AU) Australia Preliminary Jan Retail Sales M/M: +0.6% v 2.0%e
  • (AU) AUSTRALIA FEB PRELIMINARY PMI MANUFACTURING: 56.6 V 57.2 PRIOR
  • (AU) Australia sells A$600M v A$600M indicated in 0.25% Nov 2025 bonds, avg yield 0.4531%, bid to cover 8.1x
  • (NZ) New Zealand Q4 PPI Input Q/Q: 0.0% v +0.6% prior; PPI Output Q/Q: +0.4% v -0.3% prior
  • (NZ) New Zealand Jan Treasury Activity Index Y/Y: 0.8% v 1.5% prior
  • (NZ) New Zealand Dec New Residential Mortgage Lending NZ$9.65B, +48% y/y

China/Hong Kong

  • Hang Seng opened -0.4%, Shanghai Composite -0.4%
  • (CN) PBOC may keep OMOs at limited scale, May keep liquidity between ‘tight’ and ‘loose’ in near future; Economic policies may be adjusted if the global economy starts to recover. – China press
  • (CN) China PBOC Open Market Operation (OMO): Injects CNY20B in 7-day reverse repos v CNY20B in 7-day reverse repos prior; Net drain CNY80B v Net drain CNY260B prior
  • (CN) China PBOC sells CNY25.0B v CNY25.0B indicated in 3-month and 1-year bills in Hong Kong
  • (CN) China Ministry of Finance sells 3-month bills: Avg yield 1.9564% v 2.3753% prior
  • (CN) China PBOC sets Yuan reference rate: 6.4624 v 6.4536 prior
  • (CN) China considering lifting limits on children per couple in Northeast areas of the country – Press
  • (US) US House has revived bill aimed at banning imports from Xinjiang (China) – financial press

Japan

  • Nikkei 225 opened -0.9%
  • (JP) JAPAN JAN NATIONAL CPI Y/Y: -0.6% V -0.7%E, CPI EX-FRESH FOOD (CORE) Y/Y: -0.6% V -0.6E
  • (JP) JAPAN FEB PRELIMINARY PMI MANUFACTURING: 50.6 V 49.8 PRIOR (1st expansion in 21 months)
  • Toyota [7203.JP] Production at plant in Mexico has been affected by Natural Gas Shortages related to winter storm in Texas
  • (JP) Japan Chief Government Spokesman: There are 93 cases of the new mutant strain of COVID-19 confirmed in the country

Korea

  • Kospi opened +0.1%
  • LG Electronics [066570.KR]: Mexico plants partially halted due to natural gas shortages
  • (KR) South Korea sells KRW103B in 10-year inflation linked bonds: Avg yield: 0.57%
  • (KR) South Korea Jan PPI Y/Y: 0.8% v 0.2% prior
  • (KR) Japan, US, and South Korea held meeting on North Korea – Press

North America

  • (US) Electric Reliability Council of Texas (ERCOT): ~36,000 Mw of generation remains on forced outage; said most of the remaining outages are weather-related as opposed to forced blackouts
  • (US) Texas oil patch reportedly begins to resume operations following cold winter weather – press
  • (US) Four Texas refineries said to be potentially weeks from recovering from storms – press
  • (US) President Biden to take part in virtual G7 Friday (Feb 19th)
  • (US) White House Press Sec Psaki: Pres Biden will use G7 meeting tomorrow to discuss COVID and global economy with world leaders
  • (US) Pres Biden to issue order to review key US supply chains related to semis, high-capacity batteries, and rare earth metals, but order does not mention China – CNBC
  • (US) Treasury Sec Yellen: hopes to see progress on stimulus bill in next two weeks; benefits of stimulus will far outweigh the costs; For the moment we have kept the tariffs in place that were put in by the Trump administration, we’ll evaluate going forward what we think is appropriate – CNBC interview
  • (US) INITIAL JOBLESS CLAIMS: 861K V 770KE; CONTINUING CLAIMS: 4.49M V 4.43ME

Europe

  • (EU) ECB chief Lagarde: 2021 will be a year of recovery; vaccines are priority number one – CNN interview
  • Audi Puebla plant has restarted production on the 3rd shift today (Feb 18th)
  • (DE) Germany Finance Ministry Monthly Report: Sees inflation close to January’s 1.0% in coming months; Jan Tax Rev -11.1% y/y, cites the pandemic

Levels as of 00:20 ET

  • Nikkei 225, -0.9%, ASX 200 -1.3% , Hang Seng -0.8%; Shanghai Composite +0.1% ; Kospi -0.1%
  • Equity S&P500 Futures: -0.2%; Nasdaq100 -0.3%, Dax -0.1%; FTSE100 -0.1%
  • EUR 1.2098-1.2082 ; JPY 105.74-105.55 ; AUD 0.7777-0.7756 ;NZD 0.7227-0.7203
  • Gold -0.4% at $1,767/oz; Crude Oil -1.6% at $59.64/brl; Copper +0.3% at $3.9188/lb
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