Headlines/Economic Data
General Trend
Shanghai Composite and Hang Seng decline over 4%
Currency volatility relativity muted vs equities
Australia/NewZealand
ASX 200 opened -0.4%: closed -0.9%%
Energy -2.4%,Telecom -1.8%, Utilities -1.8%, Consumer Discretionary -1.6%, Resources -1.2%, Financials -0.9%
(AU) RESERVE BANK OF AUSTRALIA (RBA) QUARTERLY STATEMENT ON MONETARY POLICY (SOMP): QUARTERLY INFLATION AND GROWTH FORECASTS LITTLE CHANGED
(AU) Australia Dec Home Loans M/M: -2.3% v-1.0%e; Investment Lending: -2.6% v +1.5% prior
(AU) Australia sells A$400M v A$400M indicated in July 2022 bonds, avg yield 2.2838%, bid to cover 5.79x
China/Hong Kong
Shanghai Composite opened -2.7%, Hang Seng -2.5%
Hang Seng Materials Index -4.9%, Services -4.1%
(CN) CHINA JAN CPI M/M: 0.6% V 0.3% PRIOR: Y/Y:1.5% V 1.5%E
(CN) China Jan PPI Y/Y: 4.3% v 4.3%e
(CN) China won’t face big inflationary pressure in 2018 – China Securities Journal
(CN) PBOC SETS YUAN REFERENCE RATE AT 6.3194 V 6.2822 PRIOR
(CN) China PBoC: Skips OMO (12th straight session)
(CN) PBoC: Has released Temporary liquidity worth almost CNY2.0T (under previously announced measures); measure seeks to satisfy cash demand before Lunar New Year; Previously announced targeted RRR cuts inject about CNY450B in liquidity.
(CN) China to cut gasoline by CNY170/ton – Press
Looking Ahead: China Jan Bank Lending data maybe released during the European session
Japan
Nikkei 225 opened -1.8%; closed -2.3%
TOPIX Electric Appliances Index -3.4%, Iron & Steel -3.3%, Securities -3%,Real Estate -3%
Nissan Motors [7201.JP]: Declines over 3.5%after revising FY guidance
Nexon [3659.JP]: Gains over 14% after reporting FY results and announcing stock split
Nikkei 225 Feb options said to settle at 21,190
Japan PM Abe Adviser Hamada: Recent stock declines could make BoJ cautious about raising rates
Japan Fin Min Aso: Various factors are behind stock market moves; US and global economy’s fundamentals are‘not bad’
BOJ announcement related to daily bond buying operation: leaves amounts unchanged
Korea
Kospi opened -2.5%
Samsung Electronics has declined by over 2.5%
(KR) South Korea Fin Min Official: Will take action to stabilize financial markets should uncertainties spread; to strengthen monitoring of FX market
Other Asia
(PH) Philippines Dec Trade Balance: -$4.0B(multi-year high for the deficit) v -$3.0Be
(PH) Philippines Central Bank(BSP) Gov Espenilla comments after central bank left rates unchanged on Thursday: ‘Inflation spike’does not warrant immediate tightening
North America
US equity markets ended lower: Dow -4.2%, S&P500 -3.8%, Nasdaq -3.9%, Russell 2000-2.9%
S&P500 Financials -4.4%, Technology -4.1%
(US) Fed’s Dudley (dove, FOMC voter): Decline inequity markets doesn’t have economic implications at this point; so far stock selloff has been ‘small potatoes’; Main outlook for three rate hikes is reasonable; could do four hikes if economic outlook gains; Bond yields moving higher is putting pressure on stocks; US govt debt service costs are likely to rise a lot – TV interview
(US) Fed’s George (hawk): 3 rate hikes for 2018 and 2019 would be reasonable unless economic outlook changes
(US) TREASURY’S $16B 30-YEAR BOND AUCTION DRAWS 3.121%; BID-TO-COVER RATIO: 2.26 V 2.23 PRIOR AND 2.25 AVG OVER THE LAST 4 AUCTIONS (highest yield since March 2017, lowest BTC since Nov)
(US) House GOP Leaders say next votes [related to funding] to come after 12 AM EST government funding deadline – US financial press
(US) Office of Management and Budget (OMB) said to direct agencies to prepare for possible shutdown if Congress cannot pass funding bill by the midnight deadline – Washington Post
(US) President Trump expected to propose reducing some drug costs for Medicare – US press
(US) US said to consider ’emergency’ support for coal plants – US financial press
Levels as of01:00ET
Hang Seng -3.5%;Shanghai Composite -4.8%; Kospi -1.8%
Equity Futures:S&P500 +0.3%; Nasdaq100 +0.2%, Dax +0.3%; FTSE100 +0.3%
EUR 1.2240-1.2265 ;JPY 108.49-109.11; AUD 0.7758-0.7794 ;NZD 0.7198-0.7231
Feb Gold flat at $1,319/oz;Feb Crude Oil -1% at $60.53/brl; Mar Copper -0.2% at $3.067/lb
