Headlines/Economic Data
General Trend: Asian equities trade mixed
Chinese equities decline amid weaker than expected trade surplus
China Jan imports jump as crude oil imports hit record high
Yuan (CNY) declines over 1% versus USD, despite stronger PBoC fix
Kiwi (NZD) under performs as RBNZ official commented on probability of rate cut
Aussie traders look ahead to Friday’s release of the RBA quarterly policy statement and forecasts
RBA Gov Lowe expected to speak later today during the European morning
BoJ’s Suzuki comments on recent declines in markets and possibility of ‘tweak’ in policy easing
Japan
Nikkei 225 opened +0.4%; closed +1.1%
Nissan [7201.JP] gains ahead of earnings report
(JP) Japan Dec BoP AdjCurrent Account: ¥1.48T v ¥1.65Te; Current Account Balance: ¥797.2T v ¥1.06Te;Trade Balance BoP: ¥538.9B v ¥520.4Be; 2017 current account surplus¥21.874T, +7.5% y/y; largest since 2007
(JP) BoJ Suzuki: Reiterates important to ‘patiently’ maintain ‘powerful’ monetary easing; does not rule out a chance of ‘tweak’ under powerful easing; BoJ may fine-tine YCC in future but that won’t be big turnaround in its monetary policy or exit from easy policy; Impact of ‘market rout’ on policy may be limited
(JP) Japan Chief Cabinet Sec Suga: No decision made on meeting between Abe and North Korea
(JP) Japan MoF sells ¥800B v ¥800B indicated in 0.8% (0.8% prior) 30-yr bonds; Avg yield: 0.820% v 0.832% prior; Bid to cover: 4.27x v 3.77x prior
Korea
Kospi opened +0.2%
Chip makers Samsung Electronics and Hynix gain over 1%
Daewoo Engineering & Construction [047040.KR]: Declines over 6%: Hoban said to be considering dropping its bid due to extra losses – Korean press
(KR) North Korea: Will not use Winter Olympics aspolitical venue – KCNA
(KR) South Korea Industry Ministry launchedproject to boost the country’s semiconductor and display sectors through newtechnology development and localized production – Korean press
(KR) Bank of Korea (BoK): Reiterates monetary policy to remain accommodative; Sees strong exports of memory chips and oil products
(US) Vice President Pence: Will meet any use of nuclear weapons with rapidresponse; all options are on the table for North Korea – Speaking to troops inJapan
China/Hong Kong
Hang Seng opened +0.8%, Shanghai Composite -0.9%
Hang Seng Info Tech Index +1.6%, Services +1.5%, Financials +0.6%, Property/Construction+0.2%; Materials -1.8%, Energy -1.1%
(CN) CHINA JAN FOREIGN RESERVES: $3.162T V $3.170TE (released after Shanghai closeyesterday)
(CN) CHINA JAN TRADE BALANCE (CNY): 135.8B V 330.0BE; Exports YoY: 6.0% v 2.6%e, Imports YoY: 30.2% v 5.3%e
(CN) CHINA JAN TRADE BALANCE (USD): $20.3B V $54.7BE; Exports YoY: 11.1% v 10.7%e, Imports YoY: 36.9% (fastest growth since Feb 2017) v 10.6%e
ZTE Corp [763.HK] Senator’s Tom Cotton and Marco Rubio introduce Defending US Govt Communications Act; legislation that would prohibit the United States government from purchasing or leasing telecommunications equipment and/or services from Huawei, ZTE, or any subsidiaries or affiliates
(CN) China Economic Daily Commentary: One-waymove of yuan is unlikely in 2018
(CN) China Jan excavator sales said to more than double – Chinese Press
(CN) China Central Depository & Clearing annual report: Interbank holdingsof wealth management products CNY3.25T v CNY6.65T y/y
(CN) Standard Chartered Economist Ding: Yuan could appreciate to 6.18/dollar bythe end of the year
USD/CNY (CN) PBOC SETS YUAN REFERENCERATE AT 6.2822 V 6.2882 PRIOR (strongest CNY fix since Aug 11, 2015)
(CN)PBOC Statement: To improve the framework of regulation underpinned by monetarypolicy and macro-prudential policy in 2018
(CN) China FX Regulator SAFE: Will support "capable and qualified"businesses to invest overseas this year to advance cross-border investment
(CN) China probe on US Sorghum imports is normal case; urges US to prudentlydeal with 301 probe
USD/CNY Onshore yuan falls 0.7% to 6.3268/dollar, biggest decline in 13-months
(CN) China has resumed an outbound investment scheme, under the Qualified Domestic Limited Partnership (QDLP) plan after a 2-yr break, granting licenses to ~12 global money managers – financial press
Looking Ahead: China Jan CPI and PPI expected to be released on Friday
Australia/New Zealand
ASX 200 opened -0.2%; closed %
ASX 200 Resources Index -1.2%, Energy -1.5%, Utilities -1.3%; Telecom +1.5%, Financial +0.8%
(NZ) NEW ZEALAND CENTRALBANK (RBNZ) LEAVES OFFICIAL CASH RATE (OCR) UNCHANGED AT 1.75%; AS EXPECTED
(NZ) RBNZ Gov Spencer: not concerned about the NZD, comfortable with where the currency is – post rate decision comments
(NZ) RBNZ Assistant Gov McDermott: Drop in inflation expectations could trigger rate cut; currently RBNZ has neutral stance on rates
(NZ) New Zealand Central Bank (RBNZ) Gov Spencer: Did not cut rates because inflation will come back – parliament
(AU) Australia Q4 NAB Business Confidence: 6 v 8 prior
Blackham Resources (+32%) BLK.AU Reports Jan gold production6.5K oz v 5.5K m/m
AGL Energy[AGL.AU]: Declines over 1% as H1 underlying EBIT missed expectations
Looking Ahead: RBA Gov Lowe expected to speak during European morning
RBA Quarterly Monetary Policy Statement due for release on Friday
Other Asia
(PH) Philippines Central Bank (BSP) due to hold policy meeting later today
Singapore bank DBS [DBS.SG] gains over 2% after reporting Q3 earnings
North America
US equity markets closed mostly lower: Dow -0.1%, S&P500 -0.5%, Nasdaq -0.9%, Russell 2000 +0.1%
S&P500 Energy Sector -1.7%, Technology -1.3%
Costco [COST] Reports Jan SSS (ex-gas) 2.9%;US SSS (ex-gas) 3.6% v 2.1%e
Victory Capital [VCTR ] Prices 11.7M share IPO at$13.00/shr v $17-19/shr range indicated
SPDR Gold Trust ETF daily holdings -0.3% at 826.9 metric tonnes
(US) White House aide: we have come to agreement on 2-year budget deal (agreement includes $300B boosts to defense and non-defense spending); Deal would extend reaching the debt ceiling until March 2019
(US) Fed’s Williams(moderate, voter): No strong view between 3 or 4 Fed hikes in 2018
(US) Fed’s Dudley (dove, FOMC voter): A sustained drop in stock market would impact my outlook; recent activity has no consequence for economic outlook
(US) Fed’s Evans (non-voter, dove): there’s a hint inflation pressures may be in train today; his dissent on Dec rate hike was a close call; Under an alternate scenario where inflation picked up more assuredly, would support 3 or even 4 rate hikes in 2018 – comments in Iowa-
(US) TREASURY’S $24B 10-YEAR NOTE AUCTION DRAWS:2.811%; BID-TO-COVER RATIO: 2.34 V 2.48 PRIOR AND 2.33 OVER THE LAST 10 AUCTIONS (bid to cover lowest since Sept 2017)
(US) DOE CRUDE: +1.9M V +2.5ME
(CA) Canada Prime Min Trudeau: NAFTA needs to be updated and improved
Europe
(EU) ECB’s Nowotny (Austria): US Treasury is deliberately putting pressure on the dollar and wants to keep it low – press interview
(DE) Germany SPD Leader Schulz: optimistic we can get SPD party members to agree to SPD-CDU coalition
(DE) Germany’s SPD leader Schulz to step down asp arty leader; says party leader should not be part of the govt cabinet (Schulz will become Foreign Minister under the coalition deal)
(DE) Germany’s SPD party to announce results of members ballot on supporting govt coalition deal on March 4th – press
(UK) Citing UK Govt economic analysis: a no-deal Brexit would cost £80B in public finances, with the leave-voting heartlands of north-east England and West Midlands worst affected – Guardian
Swiss Re [SREN.CH]: Softbank said to be in advanced talks to take as much as a 33% stake in Swiss Re – press
Looking Ahead: BoE rate decision and inflation report due later today
Levels as of 01:00ET
Nikkei225 +1.1%, Hang Seng +0.6%; Shanghai Composite -1.5%; ASX200 +0.2%, Kospi +0.8%
Equity Futures: S&P500 +0.2%; Nasdaq100 +0.3%,Dax +0.3%; FTSE100 -0.2%
EUR 1.2286-1.2252; JPY109.68-109.12; AUD 0.7832-0.7803;NZD 0.7238-0.7181
Apr Gold -0.1% at $1,313/oz; Mar Crude Oil -0.4%at $61.55/brl; Mar Copper +0.5% at $3.11/lb
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