Market Update – Asian Session: China Caixin PMI Assures Markets Of Growth

Headlines/Economic Data

General Trend: Asian equity markets trade mixed after earlier declines in the US

China Feb Caixin PMI Manufacturing index rises to 6-month high, despite decline seen in the official index

Aluminum Corp of China (CHALCO) said there was no ‘major’ information to be disclosed following its share price declines

Chinese aluminum and steel names under pressure as markets expect President Trump to announce 20 and 25% tariffs respectively

President Trump said to plan emergency meeting with steel and aluminum execs on Thursday

Meanwhile, China President Xi’s top economic adviser is expected to meet on Thursday with top Trump Administration officials, including Treasury Sec Mnuchin

BoJ dovish dissenter Kataoka reiterates more easing is needed

US dollar (USD) in focus ahead of Fed Chair Powell’s second day of testimony

Japan

Nikkei 225 opened -0.8%; closed -1.6%

TOPIX Iron & Steel Index -1.8%, Electric Appliances -1.6%

Japan mega-banks trade broadly lower, track earlier declines in the US financial sector

Automakers decline after Wednesday’s gain in the Yen

(JP) JAPAN Q4 CAPITAL SPENDING EX SOFTWARE: 4.7% V 2.7%E; CAPITAL SPENDING Y/Y: 4.3% V 3.0%E; Company Profits: 0.9% v 5.5% prior; Company Sales: 5.9% v 4.8% prior

Kawasaki Heavy,[-5.5%], 7012.JP Confirms quality problem with N700-Series Shinkansen car undercarriages

(JP) Japan final Feb PMI Manufacturing: 54.1 v 54.0 prelim

(JP) BoJ Gov Kuroda: Reiterates BOJ’s easing has contributed to growth – parliament

(JP) BoJ Kataoka: Still ‘quite distant’ from mulling shift from easy policy, must ease more to achieve price goal quickly ; 2019 GDP likely to fall to 0.5-1.0%

(JP) Japan PM Abe: BOJ Gov Kuroda’s policies have not been wrong to date, want him to keep working towards 2% target – parliament

(JP) Nikkei looks at how BOJ Gov Kuroda may not serve a full term after being reappointed

(JP) Japan MoF sells ¥2.3T v ¥2.3T indicated in 0.1% (prior 0.1%) 10-yr JGB; avg yield 0.062% v 0.088% prior; bid to cover 4.53x v 4.58x prior

Looking Ahead: Japan Jan Unemployment rate due for release on Friday, along with the Tokyo Feb CPI data

Fast Retailing [9983.JP] is scheduled to report Feb sales on Friday (prior figures came after the market close)

Korea

Kospi closed for holiday

SK Telecom, 017670.KR CEO Jung-ho: Working on wearable technology called “The Sleeve” that will be enabled by the fifth-generation telecom network with Nokia Bell Labs – Korean press

(KR) South Korea has submitted a document rebutting US trade group representing its pharmaceutical industry that Korea’s drug pricing policies favor its domestic industry – Korean press

(KR) South Korea Feb Trade Balance: $3.31B v $2.39Be; Exports y/y: 4.0% v 0.5%e; Imports y/y: 14.8% v 12.0%e

According to KDB GM Korea may have FY17 Net loss of KRW900B (4th consecutive year of losses) – Korean press

China/Hong Kong

Hang Seng opened -0.3%, Shanghai Composite +0.1%

Hang Seng Info Tech Index +2%, Energy -0.9%

Shanghai Composite Property index has moved between gains and losses

ASM Pacific Technology [522.HK] rises over 3% after reporting Q4 earnings

(CN) China National People’s Congress to start on March 5th, will set economic targets for the coming year; Expected to keep GDP growth near or above 6.5%; Proactive fiscal policy is expected to be maintained – Xinhua

(CN) China PBoC Open Market Operation (OMO): injects CNY150B in 7-day, 28-day and 63-day reverse repos v skipped prior; Net drains CNY10B

USD/CNY (CN) PBOC SETS YUAN REFERENCE RATE AT 6.3352 V 6.3294 PRIOR

(CN) CHINA FEB CAIXIN PMI MANUFACTURING: 51.6 V 51.3E (6-month high)

(CN) China Securities Regulator (CSRC) said to have asked some funds to avoid net selling during National People’s Congress, which may account for the selling seen this week – press

(HK) Macau Feb Casino Rev (MOP) 24.3B v 26.3B prior; Y/Y: +5.7% v 9.0%e

Australia/New Zealand

ASX 200 opened -0.4%; closed -0.7%

ASX 200 Energy Index -2.2%, Utilities -1.6%, Resources -1.6%, Consumer Discretionary -0.8%, Financials -0.5%

(NZ) New Zealand Q4 Terms of Trade Index Q/Q: 0.8% v 0.5%e

(AU) Australia Feb AiG Perf of Manufacturing Index: 57.5 v 58.7 prior

(AU) AUSTRALIA Q4 PRIVATE CAPITAL EXPENDITURE (CAPEX) Q/Q: -0.2% V 1.0%E; Equipment, plant, machinery investment +2.2% q/q; Buildings, structures investment -2.1% q/q; Sees 2017/18 Capex estimate +2.5% y/y; Australia companies plan to spend A$114.6B; Sees 2018/19 Capex estimate +3.5% y/y; Australia companies plan to spend A$84B

(NZ) New Zealand sells NZ$100M in 2.5% 2040 inflation indexed bonds; avg yield 2.1987%

(AU) Australia Prudential Regulatory Authority (APRA) Chairman Byres: 10% cap on bank lending to residential property investors was probably reaching the end of its useful life

(AU) Australia ACCC exec general manager of specialized enforcement Bezzi: As a general matter we are concerned about potential collusion in forex markets and we do have some investigations, that I am not able to go into in any detail, that touch on some of these issues – AFR

(AU) Australia Feb Commodity Index (AUD): 139.8 v 135.3 prior; Commodity Index SDR Y/Y: -1.0% v -0.6% prior

Other Asia

(TW) Taiwan Central Bank Gov Yang: NT$ gains help ease import driven inflation pressures; will take appropriate monetary policy to keep inflation stable

North America

US equity markets ended broadly lower: Dow -1.5%, S&P500 -1.1%, Nasdaq -0.8%, Russell 2000 -1.6%

S&P500 Energy -2.3%, Materials -1.8%

(VE) US Trump Administration Official: Does not rule out complete US oil embargo on Venezuela, says it would cause fairly strong shock to the oil market in the short-term

(US) US said to plan announcement on Thursday, Mar 1st related to steel and aluminum imports – US press

(US) SEC launches investigation into cryptocurrency, issued subpoenas and information requests to technology companies and advisers – financial press

(US) DOE CRUDE: +3.0M V +2ME

Looking Ahead: US Feb ISM Manufacturing PMI to be released

Europe

Carrefour [CA.FR]: Reports FY net -€531M v +€746M, Rev €88.2B v €85.7B y/y

Looking Ahead: UK Feb Manufacturing PMI due to be released

Levels as of 01:00ET

Nikkei225 -1.6%, Hang Seng -0.4%; Shanghai Composite +0.0%; ASX200 -0.7%, Kospi -1.2%

Equity Futures: S&P500 -0.3%; Nasdaq100 -0.2%, Dax -0.6%; FTSE100 -0.5%

EUR 1.2199-1.2184; JPY 106.87-106.55; AUD 0.7766-0.7717;NZD 0.7211-0.7187

Apr Gold -0.2% at $1,315/oz; Apr Crude Oil +0.0% at $61.66/brl; May Copper +0.3% at $3.14/lb