Volatility compressed ahead of tomorrow's Dutch elections
Asia Mid-Session Market Update: Volatility compressed ahead of tomorrow's Dutch elections, Fed decision/projections/conference, Aussie jobs, and BOJ statement
US Session Highlights
OPEC Monthly Report: Saudi Arabia Feb production rises back above 10M; boosts non OPEC supply growth forecast
(US) FEB PPI FINAL DEMAND M/M: 0.3% V 0.1%E; Y/Y: 2.2% V 1.9%E; Ex Food and Energy M/M: 0.3% v 0.2%e; Y/Y: 1.5% v 1.5%e
(SA) Reportedly Saudi oil production increase in Feb went to domestic storage, not to international oil market – press
US markets on close: Dow -0.2%, S&P500 -0.3%, Nasdaq -0.3%
Best Sector in S&P500: Consumer Discretionary
Worst Sector in S&P500: Energy
Biggest gainers: WU +3.5%, MSI +2.1%, REG +1.8%, GT +1.7%, KIM +1.6%
Biggest losers: FTR -4.7%, UAL -4.7%, CTXS -3.4%, OKE -3.3%, MRO -3.3%
At the close: VIX 12.3 (+1.0 pts); Treasuries: 2-yr 1.38% (flat), 10-yr 2.60% (-1bps), 30-yr 3.17% (-2bps)
US movers afterhours
CLDX Reports Q4 -$0.30 v -$0.34e, R$1.9M v $1.0Me; +3.0% afterhours
AKAO Reports Q4 -$1.04 v -$0.47e, R$10.7M v $11.3Me; -5.9% afterhours
NPTN Reports Q4 $0.13 v $0.08e, R$109.8M v $108Me; Guides Q1 -$0.30 to -$0.20 v $0.05e; -12.0% afterhours
RUBI Reports Q4 $0.37 v $0.26e, R$72.7M v $63.6Me (2 est); Guides Q1 -$0.26 to -$0.22 v $0.05 (adj) y/y; -15.5% afterhours
Politics
(US) MSNBC’s Rachel Maddow unveils Pres Trump’s 2005 tax returns; Trump paid about $36M on income of about $150M (implies 24%)
(US) FBI Director Comey to disclose whether its probe of Russia interference in Trump’s campaign is ongoing tomorrow – press
(NL) Ahead of tomorrow’s elections, DPA news citing 3 polls see Netherlands Liberal Party leader and PM Rutte in the lead with expected 24-28 seats in 150-seat Parliament – press
Asia Key economic data:
(AU) AUSTRALIA MAR WESTPAC CONSUMER CONFIDENCE INDEX: 99.7 (4-month high) V 99.6 PRIOR, M/M: 0.1% (3rd straight increase) V 2.3% PRIOR
(NZ) NEW ZEALAND Q4 CURRENT ACCOUNT BALANCE (NZ$): -2.34B V -2.43BE
(KR) South Korea Feb Unemployment Rate: 4.0% v 3.9%e (highest since Sept 2016)
Asia Session Notable Observations, Speakers and Press
Asia indices are down marginally, tracking modest declines in US markers where volumes were extremely light due to massive snowstorms impacting travel in the Northeast. Airlines were the most heavily hit for the 2nd straight day, while auto components and textiles outperformed. Treasuries were slightly higher going into the FOMC and USD majors traded sideways, with tomorrow’s anticipated 25bp rate hike priced in and uncertainty building for a more aggressive FOMC statement/dot plots on the heels of better economic data and more hawkish Fed-speak.
Oil prices hovered around 3-month lows in the US session on reports of increased Saudi output, but WTI was up over 1.5% after API inventories showed the first draw in 3 weeks. Saudis also clarified that the increase in Feb went into domestic storage rather than global supply.
Economic data were limited to a slight uptick in Australia’s Westpac Consumer Confidence and New Zealand’s Q4 Current Account ahead of tomorrow’s GDP. Westpac survey determined that consumers have turned more risk averse and also less optimistic about prospects of the property sector.
China Premier Li spoke at length to mark the conclusion of the NPC summit, calling for better relations and more dialogue with US to avoid a trade war that would hurt both sides. Li added the 6.5% 2017 GDP target is ambitious considering external risks, but noted the govt will prioritize employment and avoid large-scale job cuts similar to industry capacity reduction measures late last year. Li reiterated PBOC will keep Yuan stable and proceed with market based reform, adding CNY depreciated due to strong USD rather than China’s efforts to devalue Yuan to gain competitive advantage in exports.
China
(CN) China Premier Li: Ties between China and US keep moving forward, optimistic about ties
(CN) China Customs Inspection Chief: China is increasing controls on imports of low quality coal
Japan
(JP) Japan wage increase by top firms for FY17/18 expected to be about 0.3%, the smallest in 4 years – press
Australia
(AU) NAB now sees RBA keeping rates on hold for all of 2017 v 1 rate cut in Nov seen in Feb
Korea
(KR) South Korea Ministry of Strategy and Finance and Korea Customs Service: March daily export turnover estimated above $2B, 17-month high – Korea press
Asian Equity Indices/Futures (00:00ET)
Nikkei -0.2%, Hang Seng -0.1%, Shanghai Composite +0.1%, ASX200 -0.1%, Kospi -0.1%
Equity Futures: S&P500 +0.1%; Nasdaq +0.1%; Dax +0.1%; FTSE100 +0.1%
FX ranges/Commodities/Fixed Income (00:00ET)
EUR 1.0600-1.0620; JPY 114.60-114.90; AUD 0.7555-0.7575; NZD 0.6915-0.6940
Apr Gold -0.2% at $1,201/oz; Apr Crude Oil +1.7% at $48.54/brl; May Copper flat at $2.64/lb
(US) Weekly API Oil Inventories: Crude: -0.5M v +11.6M prior (first draw in 3 weeks)
SPDR Gold Trust ETF daily holdings rise 3.0 tonnes to 835.0 tonnes; 2nd straight increase
iShares Silver Trust ETF daily holdings rise to 10,303 tonnes from 10,268 tonnes prior; first rise since Feb 21st
USD/CNY (CN) PBOC SETS YUAN MID POINT AT 6.9115 V 6.9118 PRIOR
(CN) PBOC to inject combined CNY60B v CNY40B prior in 7,14, and 28-day reverse repos
(CN) China MoF sells 7-yr bonds at 3.20% v 3.16%e
(KR) Bank of Korea (BOK) sells KRW2.3T v KRW2.3T offered in 2-yr monetary stabilization bonds; avg yield 1.67% v 1.65% prior
Asia equities / Notables / movers by sector
Consumer discretionary: 753.HK Air China +3.7%, 1055.HK China Southern Airlines +5.0% (Feb result); 669.HK Techtronic Industries +5.8% (FY16 result); 1316.HK Nexteer Automotive Group +6.9% (FY16 result); CKF.AU Collins Foods -2.9% (Canaccord Genuity cuts rating)
Financials: 2378.HK Prudential PLC +3.2% (FY16 result); GPT.AU GPT +2.9% (Credit Suisse raises rating)
Industrials: 7267.JP Honda Motor +0.8% (base salary raise); 5202.JP Nippon Sheet Glass Co -4.5% (Tier 1 firm cuts rating)
Technology: 451.HK GCL New Energy Holdings +1.2% (profit warning); 6502.JP Toshiba Corporation -7.9% (Submits internal controls report to TSE); 6753.JP Sharp Corp -2.1% (press speculates may resume dividends and end domestic TV production); 6146.JP Disco Corp -1.4% (Tokai Tokyo cuts rating)
Materials: FMG.AU Fortescue +6.3% (RBC raises rating); SBM.AU St Barbara -3.9%, RSG.AU Resolute Mining -1.7% (Gold stocks pare gains); 5463.JP Maruichi Steel Tube -3.0% (SMBC cuts rating)
Energy: 916.HK China Longyuan Power Group -5.9% (FY16 result); ORG.AU Origin Energy +0.1% (JPMorgan raises rating)
