Headlines/Economic Data
General Trend: Various Asian indices decline over 5%
S&P500 Futures decline over 3% in Asia
Financial and Energy stocks underperform
(CN) China coal names under pressure after report China was considering a price cap
US equities remain volatile in Asian trading: Japan Exchange said circuit breaker was triggered on Dow Jones futures; Circuit breaker Also triggered on Tokyo Stock Exchange Mother futures
Asian gov’t bond yields move lower amid gains in Treasury prices and equity declines
Japan 40-year JGB yield hits lowest level since April 2017
BoJ Gov Kuroda declines comment on daily stock price movements
Japan
Nikkei 225 opened -1.8%; closed -4.7%
TOPIX Information and Communications Index declines over 4% amid losses of over 5% in shares of Softbank
Financials decline:TOPIX Securities Index declines over 5%; Mitsubishi UFJ, Mizuho Financial and Sumitomo Mitsui Financial decline over 3%.
Toyota [7203.JP]: Declines over 3% ahead of expected earnings report
(JP) Japan Econ Min Motegi:Want to closely watch financial market moves and impact on the economy
(JP) Japan Fin Min Aso: Coincheck is not a bank,so needs real time inspection; no comment on market moves
(JP) Japan MoF sells ¥400B v ¥400B indicated in 10-yr 0.1% inflation-indexed bonds; lowest yield -0.464%; bid to cover 3.38x
(JP) Japan Securities Clearing Corp (JSCC) said to issue intraday margin call related to Topix and Nikkei 225 Futures – US financial press
(JP) Bank of Japan (BOJ) Gov Kuroda: No comment on daily moves of stock prices; Japan equities are being impacted by moves in the US – Parliament
Korea
Kospi opened -2.2%
Financials decline by over 3%:Hana Financial down over 5%
Weakness in the chip sector: Samsung declines over 2%, while Hynix drops by more than 1.5%
Samsung Electronics [005930.KR]: China NDRC saidto sign MOU with the company regarding chip cooperation – China Daily [**Note:Samsung and the NDRC were said to have signed the MOU related to cooperation inthe DRAM market, said a Korean press report from Feb 2nd. The report said theMOU may include Samsung agreeing to moderate DRAM price increases in order tohelp contain costs for smartphone makers in China]
(KR) South Korea Ministry of Trade, Industry and Energy: to foster midsized firms to add 130,000 jobs by 2022 – Korean press
(KR) Bank of Korea (BoK) Gov Lee to monitor impact of US equity markets ondomestic market – South Korean Press
(KR) South Korea Finance Ministry: To scrap/delay earlier plans to imposetougher capital gains tax on foreigners
(KR) South Korea sells 30-yr pre-issuance govt bonds at 2.69%
(KR) ~8% of virtual bank accounts for cryptocurrency trading in South Koreahave been converted to real-name bank accounts, 1-week after the govt ended theability to have anonymous accounts – Korean press
(KR) South Korea International Trade Association: South Korea faces far moreimport restrictions from the United States than any other country – Korean press
(KR) South Korea sells KRW1.1T in 30-yr govt bonds, avg yield 2.67%
China/Hong Kong
Hang Seng opened -3.8%, Shanghai Composite -2.0%
Hang Seng Energy Index -4.8%, Information Tech -4.5%, Property/Construction -4.3%, Consumer Goods -4.1%, Materials -4%, Financials -4%
(CN) Shanghai Exchange to increase oversight of dividend payments,to promote the listed company cash dividends – Chinese Press
(CN) Local provinces in China said to conduct checks on implicit government debts – China Securities Times
(CN) China PBoC: Skips OMO (9th straightsession) v skipped prior; Net drain CNY80B v CNY40B prior
(CN) PBOC SETS YUAN REFERENCE RATE AT 6.3072 v6.3019 PRIOR
(CN) China Premier Li: China will remain committed to the policy of reform andopening up and provide more convenience for foreign experts to work in China –Xinhua
Australia/New Zealand
ASX 200 opened -1.6%; closed %
ASX 200 Energy Index -3.8%, Financials -3.2%, Consumer Discretionary -3.6%, Telecom -2.9%, Resources-2.7%
(AU) RBA LEAVES CASH RATE TARGET UNCHANGED AT 1.50%; AS EXPECTED
(UK) PM May seeking developmentof trade relations with Australia post Brexit
(AU) AUSTRALIA DEC TRADE BALANCE (A$) -1.36B V +200ME
(AU) AUSTRALIA DEC RETAIL SALES M/M: -0.5% V -0.2%E
(AU) AUSTRALIA Q4 RETAIL SALES EX-INFLATION Q/Q: 0.9% V 1.0%E
LifeHealthcare, LHC.AU To be acquired by PacificEquity Partners at A$3.75/shr cash; to declare fully franked special dividendof A$0.18/share; Also reports H1 results; +41%
(AU) Australia Treasurer Morrison: I drew upon his "own experience and understanding" in dismissing Treasury’s expert advice on negative gearing
New Zealand closed for holiday
Looking Ahead: New Zealand Q4 Employment Change, Labor Cost Index and Unemployment Rate due to be released on Wed
Other Asia
(MY) Malaysia PM Razak: To waive stamp duty on some stocks for 3-yrs; to allow all investors do intraday shortselling
(TW) Taiwan Govt backedbanks said to have bought stocks on Monday including TSMC and Hon Hai (closed-1.6% after falling more than 2% in the session)
SIA Engineering [SIE.SG] To form JV with GE Aviation toform an engine overhaul joint venture based in Singapore
(SG) Singapore Deputy PM: No strong case to bancryptocurrency, closely studying cryptocurrency
North America
US equity markets ended lower: Dow -4.6%, S&P500 -4.1%, Nasdaq -3.8%, Russell 2000-3.6%
S&P500 Financials -5%, Industrial -4.5%
Micron [MU]: Gained over 2% in the afterhours: Raises Q2 $2.70-2.75 v $2.57e, Rev $7.20-7.35B v $7.02Be (prior $2.51-2.65, Rev$6.80-7.20B)
(US) White House: Pres Trump’s focus is on long-term economic fundamentals, which remain exceptionally strong
(US) Fed’s Kashkari (dove, non-voter): Friday’s job report last week showed hint wages could be rising; Dollar could create inflationary pressures – TV interview
(US) Jerome Powell formally sworn in as the new Fed Chair
(US) Congressional source: Debt ceiling is unlikely to be added as a rider to the stopgap spending bill; The House is meeting tonight to discuss a stopgap spending bill that will keep the govt funded into March – press
(US) US House expected to vote on Tuesday on short-term measure to fund government through March 23rd and avert shutdown – financial press
Looking Ahead: US weekly API Crude OilInventories due to be released
Europe
(EU) ECB’s Draghi: euro area economy is expanding robustly with stronger growth rates than previously anticipated and significantly above potential; We cannot yet declare victory on inflation front; Also, new headwinds have arisen from the recent volatility in the exchange rate, whose implications for the medium-term outlook for price stability require close monitoring.- comments to EU Parliament
(UK) Brexit Sec Davis: our teams will work intensively to agree on Brexit implementation period by March
(UK) Prime Min May: the UK and EU have discussed agreement on future trade as soon as possible, working towards Oct timetable
(UK) JAN BRC SALES LFL Y/Y:0.6% V 0.7%E
(DE) Germany coalition govt talks extended for a second time; talks said to be continuing with an eye to conclude negotiations on Tues – Germany press
(DE) Germany Labor Union IG Metall: Agreed to labor deal which provides for a 4.3% pay increase for workers that stretches over a 27 month period
(UK) Telegraph published leaked EU rules that it could be forced to accept during Brexit, speculating it could trigger new disagreements in Cabinet who have said they will not accept such rules
Levels as of 01:00ET
Nikkei225 -4.7%, Hang Seng -4.1%; Shanghai Composite -2.7%; ASX200 -3.2%, Kospi -1.5%
Equity Futures: S&P500 -0.5%; Nasdaq100 +0.1%,Dax -1.3%; FTSE100 -1.0%
EUR 1.2388-1.2351; JPY 109.30-108.45; AUD 0.7892-0.7835;NZD 0.7302-0.7257
Apr Gold +0.7% at $1,345/oz; Mar Crude Oil -1.0%at $63.52/brl; Mar Copper -0.2% at $3.18/lb
