Headlines/Economic Data
General Trend:
Asian equity markets and financials generally track declines in the US
Real Estate stocks decline after rise in US Treasury yields
Hong Kong Exchanges [388.HK] FY17 results beat ests
Asian currencies trade generally weaker after Tuesday’s gains in the US dollar
China says Feb PMIs weighed down by Lunar New Year Holiday: Manufacturing PMI hits lowest since July 2016 and has biggest m/m drop in 6-years
Japan Jan prelim industrial production has largest m/m decline since 2011
BoJ trims purchases of over 25-year JGBs in daily operation
Hong Kong issues initial 2018 GDP growth and inflation forecasts
Q4 Capex data due out of Japan and Australia on Thursday
Japan
Nikkei 225 opened -0.4%; closed -1.4%
TOPIX Iron & Steel Index -2.3%, Real Estate -1.5%, Securities -1%
Japanese mega banks trade broadly lower, track earlier declines in US financial sector
Fast Retailing [9983.JP] Declines over 1% (scheduled to report Feb sales on Friday, March 2nd)
(JP) JAPAN JAN PRELIM INDUSTRIAL PRODUCTION M/M: -6.6% V -4.0%E; Y/Y: 2.7% V 5.3%E
(JP) JAPAN JAN RETAIL SALES M/M: -1.8% V -0.6%E;RETAIL TRADE Y/Y: 1.6% V 2.5%E
(JP) Japan Jan Housing Starts Y/Y: -13.2% v -4.7%e; Construction Orders Y/Y: +0.9% v -8.1% prior
(JP) BOJ announcement related to daily bond buying operation: Reduces buying in over 25-year JGBs
(JP) Japan FY18 general budget bill is expected to pass the lower house as early as today, which would secure legislation by the end of the current fiscal year ending March
(JP) Bank of Japan (BOJ) Gov Kuroda: Reiterates BOJ easing is to reach price target
Looking Ahead: Japan Q4 Capex data due for release on Thursday
(JP) BoJ Gov Kuroda said to give speech in the lower house on Friday March 2nd, which is expected to focus on his reappointment –Japanese Press
Korea
Kospi opened -0.4%
(KR) South Korea Mar Business Manufacturing Survey: 82 v 77 prior; Non-Manufacturing Survey: 82 v 78 prior
(KR) According to analysts Bank of Korea (BOK) is expected to raise rates in May or July – Korean press
China/Hong Kong
Hang Seng opened -0.7%, Shanghai Composite -0.9%
Hang Seng Energy Index -2.9%, Information Tech -2.5%, Financials-1.7%, Services -1.5%, Property/Construction -1.6%
Shanghai Composite Property index moves between gains and losses
(CN) US President Trump:China and others take advantage of US in trade – China Daily
(CN) China Commerce Ministry (MOFCOM): China will take necessary measures to protect legal (trade) rights
(CN) China planning to reduce itsannual budget-deficit target to 2.9% of GDP, compared to the 3% set in the pasttwo years – financial press
(CN) CHINA FEB GOVT OFFICIAL MANUFACTURING PMI:50.3 V 51.1E (lowest level since July 2016); NON-MANUFACTURING PMI: 54.4 V 55.0E (4-month low),Composite PMI: 52.9 v 54.6 prior
(CN) China PBoC Open Market Operation (OMO): Skips v skips prior injection of reverse repo operations (2nd consecutive skip)
USD/CNY (CN) PBOC SETS YUAN REFERENCE RATE AT 6.3294 V 6.3146 PRIOR
(CN) China said to cut gasoline and diesel prices for March
(HK) Hong Kong Q4 GDP q/q: 0.8% v 0.7%e; 2017 GDP Y/Y: 3.8% v 3.7%e
(HK) Hong Kong Financial Sec Chan: Gives initial 2018 outlook: GDP 3-4%; CPI 2.2%, underlying CPI 2.5% – budget address
(CN) China Finance Ministry (MOF) sells 5-year bonds: avg yield 3.6566% v 3.69%e; bid to cover 3.13x
China electric vehicle (EV) firm Nio said to hire bankers for planned 2018 IPO in the US, to raise up to $2.0B – financial press
Looking ahead: China Feb Caixin Manufacturing PMI due for release on Thursday
Australia/New Zealand
ASX 200 opened -0.2%; closed -0.7%
ASX 200 REIT Index -1.5%, Telecom -2.6%, Consumer Discretionary -1%, Resources -1.1%, Financials -0.6%
Retailer Harvey Norman [HVN.AU] declines over 12% as H1 profits declined and revenues missed ests
Virgin Australia, VAH.AU Reports H1 (A$) underlyingpretax 102.5M v 107Me; Rev 2.79B v 2.8Be; Confirms that there is no intentionto privatize the company, announces share buyback priced at A$0.30/share
(AU) Australia Treasury Sec Fraser: Wage growth is starting to lift, a sharpcorrection in housing is not likely
(NZ) RBNZ Deputy Gov Bascand: RBNZ initiatives will strengthen disclosureregime; insurance sector can improve disclosure performance (update)
(AU) Australia sells A$1.0B v A$1.0B indicated in 2.25% Nov 21, 2022 bonds, avgyield 2.3582% v 2.2218% prior, bid to cover 4.10x v 3.53x prior
(AU) Australia Jan Private Sector Credit M/M:+0.3% v 0.4%e; Private Sector Credit Y/Y: 4.9% v 5.0%e
Pilbara Minerals, PLS.AU Enters into broad-based strategic relationship POSCO; includes long-term offtake and A$79.6M equity investment in Pilbara at A$0.97/shr
(AU) NAB now sees RBA raising rates one time by 25bps in Q4 2018 (prior view of 2 rate hikes)
Looking Ahead: New Zealand Q4 Terms of Trade due for release on Thursday, along with Australia Q4 Capex
Other Asia
(TH) Bank of Thailand Feb Policy Meeting Minutes: Reiterates policy should remain accommodative; Volatile movements are expected for Baht currency (THB)
(ID) Indonesia Central Bank (BI): Have been intervening in the market since this morning; Rupiah has weakened on Fed Powell’s hawkish comments
(IN) India Feb PMI Manufacturing: 52.1 v 52.4 prior (7th month of expansion)
State Bank of India [SBIN.IN]: Raises interest rates on term deposits below INR10M by 10-50bps; for bulk deposits+25-75bps
Looking ahead: India Q4 GDP due later today
North America
US equity markets ended broadly lower: Dow -1.2%, S&P500 -1.3%, Nasdaq -1.2%, Russell 2000 -1.5%
S&P500 Real Estate -2.1%, Consumer Discretionary -2.1%
(US) Fed Chair Powell: Developments since the Dec meeting have increased his confidence that inflation is moving towards target; Further gradual increases in the federal funds rate will best promote attainment of both of our objectives;policy will remain data dependent
(CA) Canada Fin Min Morneau: Have budget room for all eventualities, interest rates in Canada are still accommodative
(US) OPEC reportedly schedules meeting with US shale producers in Houston next Monday – press
(US) Weekly API Oil Inventories: Crude: +0.9M v-0.9M prior
Looking Ahead: US Q4 GDP revision due for release , along with Q4 Consumer Spending and Feb Chicago PMI, Weekly DoE Crude Oil Inventories
Europe
(UK) Feb Lloyds BusinessBarometer: 33 v 35 prior
(UK) Feb BRC Shop Price Index Y/Y: -0.8% v -0.6%e
Looking Ahead: Euro Zone Prelim Feb CPI due for release
Levels as of 01:00ET
Nikkei225 -1.4%, Hang Seng -1.4%; Shanghai Composite -0.7%; ASX200 -0.7%, Kospi -1.1%
Equity Futures: S&P500 -0.1%; Nasdaq100 -0.1%,Dax -0.1%; FTSE100 -0.2%
EUR 1.2215-1.2239; JPY107.53-107.07; AUD 0.7799-0.7781;NZD 0.7242-0.7220
Apr Gold 0.0% at $1,318/oz; Apr Crude Oil -0.6% at $62.66/brl; May Copper -0.3% at $3.17/lb
