Headlines/Economic Data
Asian equities trade generally higher but pare gains
China Feb CPI rises at fastest pace since 2013; Government cites Lunar New Year impact
China Feb banking lending slows more than expected
PBoC officials discuss the merits of M2 in terms of monetary policy
PBoC Gov Zhou said the central bank is developing digital currency
Few surprises seen in BoJ policy statement
Markets now await upcoming BoJ Gov Kuroda press conference (prior was held at 6:30 GMT)
Upcoming release of US monthly payrolls and wage data also in focus
Australia/New Zealand
ASX 200 opened +0.1% closed +0.3%
ASX 200 Telecom Index +1.6%, Consumer Discretionary +1%, Financials +0.7%; Resources -1.8%, Energy -1.2%
(AU) Australia sells A$M v A$500M indicated in 3.25% April 2029 Bonds, avg yield 2.8212% v 2.6438% prior, bid to cover 4.36x v 3.8x prior
(NZ) RBNZ paper: natural rate of unemployment is estimated at about 5%
China/Hong Kong
Hang Seng opened +0.7%, Shanghai +0.1%
Shanghai Property index declines less than 1%
(CN) CHINA FEB CPI Y/Y: 2.9% V 2.5%E (highest reading since Dec 2013)
(CN) China: March CPI growth to be lower as holiday (Lunar New Year) factor fades.
(CN) China National Development and Reform Commission: sees 2018 China PPI growth at ~4% – Chinese press
(CN) CHINA FEB NEW YUAN LOANS (CNY): 839.3B V 900BE
(CN) CHINA FEB AGGREGATE FINANCING z(CNY): 1.17T V 1.07TE
(CN) CHINA FEB M2 MONEY SUPPLY Y/Y: 8.8% V 8.7%E; M1 MONEY SUPPLY M1 Y/Y: 8.5% V 11.0%E
(CN) PBoC comments on Feb lending data: Jan-Feb loan data should be read together due to the Lunar New Year holiday
(CN) PBoC Gov Zhou: Global economy shows recovery signs; to rely less on quantitative stimulus, may reduce reliance on money supply to boost growth
(CN) PBoC Dep Gov Yi: There is no quantitative target for China M2 in 2018
(CN) China PBoC Vice Gov Pan Gongsheng: FX reserves to be basically steady in future; mortgages have risen rapidly; reiterates monetary policy is neutral and appropriate
(CN) China Commerce Ministry (MOFCOM): Firmly opposes US trade measures, urges US to withdraw measures on steel and aluminum; to take ‘strong’ measures to safeguard own interest
(US) US Commerce Dept: Affirms preliminary determination on some China steel fittings; to impose 13.79% duties
(CN) China PBoC Open Market Operation (OMO): To skip OMO (5th straight session) v: Net drain CNY40B v CNY100B drain prior; For the week, PBoC drained net of CNY240B v net CNY120B injection w/w
(CN) PBOC SETS YUAN REFERENCE RATE AT 6.3451 v 6.3239 PRIOR
(CN) Shanghai Rebar Steel declines over 4.5%
(CN) China said to place curbs on OTC options trading by asset managers
Japan
Nikkei 225 opened +1.1%; closed +0.5%
(JP) Nikkei 225 March Futures and Options said to settle at ~21,575
(JP) BANK OF JAPAN (BOJ) LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%; AS EXPECTED; Official Kataoka dissents for 5th straight meeting.
(JP) Japan Jan Labor Cash Earnings Y/Y: 0.7% v 0.7%e; Real Cash Earnings Y/Y: -0.9% v -0.7%e
(JP) Japan Feb Money Stock M2 Y/Y: 3.3% v 3.3%e; M3 Y/Y: 2.8% v 2.8%e
(JP) Japan Jan Overall Household Spending Y/Y: +2.0% v -1.0%e
(JP) Japan Finance Min Aso: US tariffs will disturb global steel and aluminum markets; to have ‘big’ effect on global economy; To work to get Japanese companies excluded from the tariffs; Will take necessary action in the WTO on the tariffs.
Mazda and Toyota Establish Joint-Venture Company “Mazda Toyota Manufacturing, U.S.A., Inc.”; involves investment of $1.6B and expected to create up to 4K jobs by 2021, annual capacity seen at 300K units
Korea
Kospi opened +0.4%
(KR) South Korea Envoy Chung-Eui-Yong: North Korea to ‘refrain further missile tests’; US President Trump and North Korea leader Kim Jong Un to meet by May
(KR) US White House: Confirms President Trump to accept invitation to meet with North Korea leader Kim; the time and place of meeting yet to be determined
Other Asia
Taiwan Semi [2330.TW]: Reports Feb Sales NT$64.6B -9.5% y/y
North America
US equity markets closed mostly higher: Dow +0.4%, S&P500 +0.5%, Nasdaq +0.4%, Russell 2000 -0.2%
S&P500 Consumer Staples +0.9%, Real Estate +0.8%
(US) Pres Trump: we need to show flexibility on tariffs to global friends; Confirms 25% tariff on foreign steel and 10% tariff on foreign aluminum; Canada and Mexico to be exempt while NAFTA talks go on; Open to modifying or removing tariffs for individual countries as long as we find way to ensure products no longer threaten security; US Trade Rep Lighthizer will be in charge of accepting offers from countries seeking exemptions – comments from White House
(US) Fed George (hawk): Reiterates important to continue gradual normalization of rates; Risks appear to be ‘predominately’ to upside
GoPro [GPRO]: Said to not receive ‘serious’ bid interest – NY Post
Europe
(UK) UK govt officials reportedly don’t see reaching a Brexit deal until next year – press
(UK) Foreign Min Johnson: UK govt is prepared for a “no deal” Brexit scenario; No deal Brexit should not hold any terrors for UK because we’d ‘do very well’ under WTO rules
(EU) Internal ECB staff calculations assume final €30B of QE purchases in Q4; Sources say there is broad agreement among members of the Governing Council that QE should probably come stop by the end of 2018 – press
(EU) EU trade chief: to ask for clarity on tariff issue in days ahead; still believe EU should be exempt from US steel & aluminum tariffs
Levels as of 01:00ET
Hang Seng +1%; Shanghai Composite +0.3%; Kospi +0.9%
Equity Futures: S&P500 flat; Nasdaq100 flat, Dax flat; FTSE100 flat
EUR 1.2295-1.2320 ; JPY 106.16-106.96; AUD 0.7776-0.7796 ;NZD 0.7249-0.7275
Feb Gold -0.3% at $1.318/oz; Feb Crude Oil +0.3% at $60.24/brl; Mar Copper -0.1% at $3.074/lb
