Headlines/Economic Data
General Trend:
Asian equity markets trade mixed after earlier weakness in US markets
Shanghai Composite opens higher upon return from Lunar New Year break
Chinese cobalt producers rise as Apple is speculated to consider direct purchases from miners
Qantas and Air New Zealand rise after earnings reports
Yen trades broadly higher: USD/JPY declines amid selling in the Yen crosses
PBoC injects cash in first OMO since before the Lunar New Year break
Japan
Nikkei 225 opened -0.8%; closed -1.1%
Topix Iron& Steel Index -2.3%, Securities -1.5%, Electric Appliances -1.3%, Real Estate -1.3%
Japanese automakers trade generally lower as the Yen strengthened
Ricoh [7752.JP]:Declines over 4% amid press speculation related to possible impairment loss
(JP) Japan PM Adviser Hamada: Reiterates BoJ should consider buying foreign bonds – US financial press
(JP) Japan Cabinet Office (Gov’t) Monthly Economic Report for February:Maintains its overall assessment , economy is recovering gradually(yesterday after close)
(JP) Japan MoF sells ¥1.0T v ¥1.0T indicated in 0.60% (prior 0.60%) 20-yr bonds; avg yield 0.5610% v 0.592% prior; bid to cover 4.44x v 4.17x prior
Looking Ahead: Japan Jan CPI data due to be released on Friday
Korea
Kospi opened -0.5%
(KR) South Korean brokerages expect Bank of Korea(BOK) rate hike in May and leave rate unchanged next week – Korean press
(KR) South Korea Q4 Household Credit (KRW): 1.45T v 1.42T prior; Household Debt y/y: 8.1% v 9.5% prior
(KR) North Korea to have official visit to the South On Feb 25th – Korean press
China/Hong Kong
Hang Seng opened -1.1%, Shanghai Composite +1.2%
Shanghai Property Index rises over 1%
Hang Seng Financials Index -1.3%, Energy -1.1%, Information Tech -0.9%, Property/Construction-0.9%
(CN) China Jan Swift GlobalPayments (CNY) 1.7% v 1.5% prior
(CN) China PBOC OMO: Injects CNY350B in 7,28 and 63-day reverse repos v skipsprior (1st injection after 16 consecutive skips)
(CN) PBOC SETS YUAN REFERENCE RATE AT 6.3530 V 6.3428 PRIOR
(US) Treasury undersecretary Malpass accuses China of “patently non-market behavior”; US needs a stronger response to counter it – press
(CN) According to China National Tourism Administration (CNTA) Lunar New year tourism totaled CNY475B, +12.6% y/y – Xinhua
(CN) Chinese companies are being forced to halt trading as their owners attempt to unwind loans collateralized with stocks – FT
Australia/New Zealand
ASX 200 opened +0.1%; closed +0.1%
ASX 200 Utilities Index -2.4%, REIT -1.3%, Financials -0.2%; Consumer Discretionary +1.1%
Qantas, QAN.AU Reports H1 (A$)Net 607M v 515M y/y, Pretax 976M v 852M y/y; Rev 8.66B v 8.18B y/y;Announces On-market share buy-back of up to A$378M
CrownResorts, CWN.AU Reports H1 (A$) Net 192.4M v 175Me; EBITDA 447.7M v 448Me; Rev 1.80B v1.7Be; to buyback 29.3M shares
Viralytics [+175.2%], VLA.AU To be acquired by Merck forA$1.75/shr valued at A$502M
Air New Zealand [+4%],AIR.NZ Reports H2 (NZ$) NPAT 232M v 229Me, Rev 2.7B v 2.7Be; raisesdividend
(NZ) New Zealand sells NZ$150M in 3.5% 2033 bonds; avg yield 3.3421%
(AU) Australia sells A$500M v A$500M indicated in June 2018 notes, avg yield1.6924%, bid to cover 6.06x
(NZ) New Zealand Jan Credit Card Spending M/M: -0.6% v 0.6% prior; Y/Y: 4.6% v6.3% prior
Looking Ahead: New Zealand Q4 Retail Sales data due for release on Friday
Other Asia
(PH) Philippines updates CPI base year to 2012 from 2006
(TH) Thailand Central Bank Gov Veerathai: The economy can weather volatile capital flows, economic fundamentals are strong; no need to rush to raise rates
North America
US equity markets ended mostly lower: Dow -0.7%, S&P500 -0.6%, Nasdaq -0.2%, Russell 2000 +0.1%
S&P500 Real Estate -1.8%, Energy -1.7%
(US) Chair of the Council of Economic advisers Kevin Hassert: Sees 2018 GDP at 3% of which 0.8% per year of growth to the president’s policies – US media
ROKU Reports Q4 +$0.06 v -$0.11e,Rev $188.3M v $183Me;-22% after hours
MLNX Guides Q1 Rev $240-250M v$227Me; Non-GAAP gm’s 68.5-69.5%; CFO resigns; +11% after hours
(US) FOMC MINUTES FROM JAN 31 MEETING: MAJORITY SAW STRONGER GROWTH LIFTING LIKELIHOOD OF FURTHER HIKES;Almost all Fed officials see inflation rising to 2% goal
(US) Fed’s Kashkari (dove, non-voter): US economy is doing very well, surprised at confidence and optimism due to tax cut, not sure how much of a long term difference tax cut will make
(US) Fed’s Harker (non-voter, moderate): US inflation to hit or exceed 2% goal by end of 2019;Reiterates he sees two 2018 rate hikes as appropriate
(US) Fed’s Quarles (hawk, FOMC voter): Economy is performing well; current policy remains accommodative, gradual rate increases are appropriate
(US) TREASURY’S $35B 5-YEAR NOTE AUCTION DRAWS: 2.658%; BID-TO-COVER RATIO: 2.44 V 2.48 PRIOR AND 2.45 OVER THE LAST 12 AUCTIONS
(US) Weekly API Oil Inventories: Crude: -0.9M v +3.9M prior
Looking Ahead: Canada Dec Retail Sales and US Weekly DoE Crude Oil Inventories to be released; Fed’s Dudley expected to speak in NY morning; Other Fed speakers expected include Bostic
Europe
(DE) German FinanceMinistry Feb Report: Jan Tax Rev +2.8% y/y; No end in sight for German economicexpansion
(GR) Moody’s raises Greece sovereign rating two notches to B3 from Caa2;outlook Positive
(UK) Reportedly the PM May’s Cabinet did not agree to her negotiating strategy for the Brexit transition period – UK Telegraph
(UK) Govt spokesperson: UK continues to see 2 year Brexit transition period, while EU is saying 21 months
(DE) ZEW raises concern about higher EU contribution by Germany – European Press
Looking Ahead: Germany Feb Ifo Survey due for release, along with second reading of UK Q4 GDP
ECB to also publish monetary policy meeting minutes
Levels as of 01:00ET
Nikkei225 -1.1%, Hang Seng -0.8%; Shanghai Composite +2.2%; ASX200 +0.1%, Kospi -0.6%
Equity Futures: S&P500 -0.3%; Nasdaq100 -0.5%,Dax -0.1%; FTSE100 -0.1%
EUR 1.2344-1.2300; JPY107.77-107.15; AUD 0.7809-0.7790;NZD 0.7321-0.7308
Apr Gold -0.5% at $1,326/oz; Apr Crude Oil -0.9% at $61.12/brl; Mar Copper -1.0% at $3.17/lb
