Headlines/Economic Data
General Trend: Asian equities trade mostly lower as steel makers remain weaker
Euro rises then pares gains amid release of Italy election results: No majority is expected (in line with prior market speculation), while support for Five Star Party rises
Precious metals outperform in the commodities space: Silver gains over 1%
Tuesday is a busy day for Australia: Q4 Current Account and Net Export Contribution expected to be released, along with Jan Retail sales and RBA decision
Japan bond yields decline amid drop in Treasury yields and rise seen on Friday after BoJ Gov Kuroda’s remarks
USD/JPY declines ahead of upcoming BoJ confirmation hearings
US Feb Nonfarm Payrolls and Avg Hourly Earnings data due for release on Friday, March 9th
Australia/New Zealand
ASX 200 opened flat: closed -0.7%
ASX 200 Utilities Index -2.3%, Materials -1.2%, Resources -1.1%, Financials -1%
Retail Food Good [RFG.AU]: Drops over 35% after reporting H1 impairment losses and declining to provide FY outlook
(AU) Australia Jan Building Approvals M/M: 17.1% v 5.0%e; Y/Y +12.0% v -0.6%e
(AU) Australia Q4 Company Operating Profit Q/Q: 2.2% v 1.5%e; Inventories Q/Q: 0.2% v 0.5%e
(NZ) New Zealand Treasury: Expects jobless rate to be broadly flat in 2018; evaluating several ways to estimate natural rate of unemployment
China/Hong Kong
Shanghai Composite opened flat, Hang Seng -0.2%
Hang Seng Telecom Index -1.8%, Financials -1.2%, Services -1.1%
Shanghai Composite Property Index rises over 1%, then pares some of gain
China Mobile [941.HK]: Declines over 2% as China announced plans to cut mobile internet rates and cancel mobile internet roaming fees.
(CN) China Feb Caixin PMI Services: 54.2 v 54.3e (first m/m decline since Sept); Composite: 53.3 v 53.7 prior
(CN) PBOC SETS YUAN REFERENCE RATE AT 6.3431 V 6.3334 PRIOR
(CN) China PBoC Open Market Operation (OMO): Skips v CNY90B injected combined in 7-day, 28-day and 63-day reverse repos prior: Net drain CNY100B v CNY20B drain prior
(CN) China sets 2018 GDP growth target around 6.5% v 6.9% growth rate in 2017 (as speculated); to maintain ‘prudent and neutral’ monetary policy and ‘proactive’ fiscal policy in 2018 – Xinhua
(CN) China commented on fiscal policy measures for 2018: To adjust minimum wage reasonably; To reduce tax in manufacturing and transportation industries; To cut taxes for enterprises and individuals by CNY800B; To cap end of 2018 outstanding sovereign bonds at CNY15.7T.
(CN) China commented on plans for property market in 2018: To push forward property tax legislation.
(CN) China comments on trade policy for 2018: Expects trade to show good trend amid stable development; To lower import tariffs on vehicles and consumer goods
Japan
Nikkei225 opened -0.6%; closed: -0.7%
TOPIX Iron & Steel Index -2.2%, Real Estate -2.1%, Electric Appliances -1.8%, Securities -1.6%
Japan mega-banks trade broadly lower
Steel and Auto Manufacturers extend losses amid trade protectionism concerns
Nikkei weighted Fast Retailing gains over 1% after reporting Feb domestic SSS +5.1% y/y
Japan Feb Services PMI: 51.7 v 51.9 prior; Composite: 52.2v 52.8 prior
Bank of Japan (BoJ) Dep Gov Nominee Wakatabe: Expects continued monetary easing to push up real wages; notes inflation is distant from 2% target and that Japan not fully out of deflation
BoJ Dep Gov Nominee Amamiya: Domestic economy making steady progress toward hitting BoJ’s price goal; financial conditions have maintained stability
Looking Ahead: BoJ Gov Kuroda Upper House confirmation hearings set for Tuesday March 6th; The confirmation hearings for the Dep Gov Nominees (Amamiya and Wakatabe) set for March 7th
Korea
Kospi opens +0.2%
South Korea Finance Min: Reiterates not appropriate for government to intervene into Bank of Korea (BoK) interest rate decisions
In related news, Bank of Korea (BoK) Gov Lee-Ju-yeol is said to be reappointed for another term as central bank gov, according to a report released on Friday, March 2nd; If Lee is reappointed it would be the first time since the 1970s that a BoK governor was appointed to a 2nd term.
South Korea Special Envoy Chung: To deliver President Moon’s strong will for denuclearization to North Korea [**Note: South Korea’s President Moon is expected to send a special envoy to North Korea ‘soon’, said a local press report from March 1st]
South Korea sells 3-year government bond: avg yield 2.34% v 2.275% prior
Other Asia
(HK) Hong Kong Feb PMI: 51.7 v 51.1 prior
(IN) India Feb PMI Services: 47.8 v 51.7 prior (1st contraction in 3 months)
(SG) Singapore Feb PMI: 55.3 v 53.6 prior
North America
XL Group [XL]: Reportedly Axa is in late stage talks to acquire XL Group – press
Qualcomm [QCOM]: US Dept of Treasury CFIUS issues interim order to the company to postpone its March 6th annual stock holders meeting and postpone election of directors by 30 days
Looking Ahead: OPEC reportedly schedules meeting with US shale producers in Houston on Monday, March 5th – press
Europe
(IT) Italy Berlusconi led Centre-Right bloc seen leading 5-star in the Italian elections; suggests hung parliament (in line with final poll ahead of the elections from Feb 16th); Support rises for 5-Star party – exit poll
(EU) EC Pres Juncker: we are preparing import duties on US products; Confirms preparing import duties on Levi’s jeans, Harley Davidson motorcycles, and bourbon
UAE Oil Min Al Mazrouei: No talks yet about extending OPEC production cut into 2019
Levels as of 01:00ET
Hang Seng -1.4%; Shanghai Composite -0.2%; Kospi -0.9%
Equity Futures: S&P500 -0.6%; Nasdaq 100 -0.5%, Dax -0.6%; FTSE100 -0.6%%
EUR 1.2299-1.2365; JPY 105.41-105.69; AUD 0.7740-0.7776 ; NZD 0.7206-0.7251
Feb Gold +0.3% at $1,327/oz; Feb Crude Oil +0.4% at $61.48/brl; Mar Copper -0.2% at $3.127/lb
