HomeContributorsFundamental AnalysisAsian Market Update: Asian Equities Generally Track Declines In The US

Asian Market Update: Asian Equities Generally Track Declines In The US

Headlines/Economic Data

General Trend:

  • Japan Steelmakers outperform as Trade Min sees ‘high chance’ for exemption from US tariffs
  • Japan automation stocks said to get hit by risk US may impose tariffs on China
  • Lower iron ore prices weigh on Australian miners
  • China Dalian Iron Ore prices extend declines, some cite concerns related to inventories and weak steel demand
  • China President Xi closes out NPC
  • China Money Market rates in focus ahead of Fed meeting (March 20-21st)
  • Little initial market reaction seen following RBA’s March minutes
  • Bundesbank’s Weidmann said to indicate a rift at G20 regarding trade (press)

Australia/New Zealand

  • ASX 200 opened -0.3%: closed -0.4%
  • ASX 200 Resources Index -1.9%; Financial flat
  • (AU) RBA March Meeting Minutes: Financial market pricing continued to imply that the cash rate was expected to remain unchanged during 2018, with a 25 basis point increase expected in the first half of 2019
  • (AU) Australia Q4 House Price Index Q/Q: 1.0% v 0.0%e; Y/Y: 5.0% v 3.9%e-(NZ) New Zealand Q1 Westpac Consumer Sentiment: 111.2 v 107.4 prior

China/Hong Kong

  • Shanghai Composite opened -0.7%, Hang Seng -0.6%
  • Hang Seng Property/Construction Index -1%, Financials -0.8%; Consumer Goods +0.9%
  • (CN) President Trump said to be readying $60B package of China tariffs that could be announced by Friday – press
  • (CN) China Commerce Ministry (MOFCOM): Doesn’t comment directly on Washington Post article; Urges US to correct abuse of trade measures
  • (CN) China Premier Li: Does not hope to see relatively big trade surplus with US; reiterates trade war would not be beneficial and hopes it will be avoided; China has been a ‘reasonable’ long-term investor of its forex reserves. – Briefing after NPC
  • (CN) Analysts said to see higher probability for PBoC to raise interest rates (timing uncertain) – China Securities Journal [Reminder: In March, China PBoC reportedly may again raise open market operation (OMO) rates following expected Fed rate hike ,said a Chinese press report from late Feb (Note: The Fed is due to meet this week from March 20-21st)]
  • (CN) China cancels income tax for foreign investors trading yuan (CNY) denominated crude oil futures – financial press
  • (CN) China high-tech A-share listings to pose high risks – China Securities Times
  • (CN) China Premier Li: Reiterates China’s ‘door for opening will get bigger and bigger’, to further lower import tariffs – Briefing after NPC
  • (CN) PBoC sets yuan reference rate at 6.3246 v 6.3320 prior
  • (CN) China PBoC Open Market Operation (OMO): Skips OMO v CNY50B injected in 7 and 14-day reverse repos: Net drain CNY40B v nil prior

Japan

  • Nikkei 225 opened -0.9%; closed -0.5%
  • TOPIX Electric Appliances Index -1.1%; Securities +1%, Iron/Steel +0.2%
  • (JP) Japan Trade Min Seko: High chance Japan will be exempted from US tariffs on steel and aluminum on per-item basis
  • (JP) Japan MoF Official: Recent yen move not reflecting fundamentals; told G20 market volatility in Feb did not reflect fundamentals [Reminder from Feb 16th: Japan’s Currency Head Asakawa said then that there had been excessive and one-sided moves in FX; will take appropriate action in line with G7]
  • (JP) US financial press article comments on the challenge for the BoJ to distinguish normalization from monetary tightening
  • (JP) BoJ Maeda named Executive Director for Monetary Policy, replacing Amamiya (Mr. BoJ) who has been promoted to Dep Gov; Maeda was the Executive Director of International Affairs at the BoJ.
  • Looking Ahead: Japan closed for holiday on Wednesday March 21st
  • (JP) BOJ new Dep Govs Amamiya and Wakatabe to hold first press conference at 5:30 PM local time (4:30 AM EST)

Korea

  • Kospi opened -0.7%
  • (KR) South Korea Feb PPI Y/Y: 1.3% v 1.2% prior
  • (KR) US Pentagon: Confirms US and South Korea military drills to resume on April 1st; scale of drills to be similar to prior years (as expected)

North America

  • US equity markets ended lower: Dow Jones -1.4%, S&P500 -1.4%, Nasdaq -1.8%, Russell 2000 -1.0%
  • S&P500 Technology -2%, Health Care -1.6%
  • Oracle [ORCL] declines over 6% in the afterhours: Reported Q3 results and issued guidance

Europe

  • (EU) ECB’s Mersch (Luxembourg): economic recovery in the euro area has developed better than expected and employment has increased significantly; we have become more confident that inflation is on the right track; If the purchase program lasts too long, the side effects increase. And if we encourage market participants to think that the exit may be postponed permanently, this could increase any cliff effects.
  • (EU) Reportedly US asks EU to meet 5 conditions to get an exemption from steel & aluminum tariffs; Conditions include improved cooperation with the US in the Global Forum on Steel as well as on security issues, setting caps on exports of steel and aluminum at 2017 levels, addressing Chinese trade-distorting practices, and working with the US on WTO cases that involve Chinese abuses.- press
  • (DE) ECB’s Weidmann (Germany) indicated rift at G20 regarding trade – US financial press
  • Fenner [FENR.UK]: Michelin reaches agreement to acquire belt and rotor manufacturer Fenner at 610p/shr, valuing it at £1.2B
  • Looking Ahead: UK Feb CPI data due for release

Levels as of 01:00ET

  • Hang Seng -0.6%; Shanghai Composite -0.2%; Kospi -0.2%
  • Equity Futures: S&P500 +0.1%; Nasdaq100 -0.3%, Dax +0.1%; FTSE100 +0.1%
  • EUR 1.2332-1.2351 ; JPY 105.92-106.36; AUD 0.7697-0.7722; NZD 0.7215-0.7250
  • Feb Gold -0.2% at $1,314/oz; Feb Crude Oil +0.4% at $62.37/brl; Mar Copper flat at $3.078/lb
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