Asian Market Update: Nikkei Rises After Recent Holiday

Mar 22 18, 07:07 GMT

Headlines/Economic Data

General Trend:

Tencent declines after Q4/FY17 results; some analysts issue cautious commentary
China Mobile FY17 earnings beat ests, Revs below
Japan Exchange raises FY guidance on higher forecast for daily trading value and volumes
USD trades generally weaker in aftermath of Fed amid focus on 2018 rate path
Reserve Bank of New Zealand (RBNZ) does not mention currency in statement
China and Hong Kong raise rates after US Fed
Hong Kong reiterates currency peg to US dollar
Short-term rates move higher in Australia and Hong Kong
Aussie employment rises for 17th straight month in Feb, misses estimates; Unemployment rate rises as participation hits highest since Dec 2010
US budget situation again in focus

Australia/New Zealand

ASX 200 opened -0.4%; closed -0.2%
ASX 200 Telecom Index -1.7%, Utilities -1.2%, REIT -1%, Financials -0.4%; Resources +1.9%, Energy +1.4%
(AU) AUSTRALIA FEB EMPLOYMENT CHANGE: 17.5K V 20.0KE; UNEMPLOYMENT RATE: 5.6% V 5.5%E
(NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE (OCR) UNCHANGED AT 1.75%, AS EXPECTED

China/Hong Kong

Shanghai Composite opened flat, Hang Seng +0.5%
Hang Seng Information Tech Index -2.9%, Services -1.2%, Consumer Goods -0.7%, Property/Construction -0.6%, Financials -0.5%; Energy +0.8%
Shanghai Composite Property index declines over 1%
Sportswear company Li Ning [2331.HK] rises over 3% after earnings report
(CN) PBOC RAISES RATE ON 7-DAY REVERSE REPO BY 5BPS TO 2.55% FROM 2.50% (tracks Wed’s 25bps rate hike by US Fed, as speculated)
(HK) Hong Kong Monetary Authority (HKMA) raises base rate by 25bps to 2.0% (tracks Fed, as expected)
(CN) China said to increase the net profit requirement for IPO applications – Chinese Press
(CN) China Dalian City said to begin home purchase restrictions – US financial press
(US) Follow Up: White House: President Trump to sign memo on China trade at 12:30 PM EST on Thursday [Reminder: Earlier on Wednesday, White House spokesperson Shah confirmed that Trump would announce trade actions on China intellectual property on Thursday]
(CN) China said to name Guo Shuqing (current CBRC Chairman) as head of new regulator for banking and insurance sectors
(CN) China PBoC sets yuan reference rate at 6.3167 v 6.3396 prior
(HK) Hong Kong Monetary Authority (HKMA) Chan: HKD will ‘very soon’ hit lower end of trading band at 7.85; to buy HKD when currency touches weak end of trading band (HK$7.75-7.85)
(CN) Moody’s: US tariffs have limited impact on China so far, but broad-ranging measures would pose greater challenges

Japan

Nikkei 225 opened -0.1% (closed prior session for holiday); closed +1%
TOPIX Electric Appliances Index +0.9%, Real Estate +0.6%; Securities -0.4%, Iron/Steel -0.3%
(JP) Japan 3-month basis swap rate rises to highest since 2014
(JP) Japan MAR Preliminary PMI Manufacturing: 53.2 v 54.1 prior (slows for 2nd straight month)
(JP) Japan Jan All Industry Activity Index M/M: -1.8% v -1.8%e
Looking Ahead: Japan Feb National CPI due for release on Friday
(JP) New BoJ Dep Gov Wakatabe to appear in parliament at 5:14 PM local time on Thursday (4:14 AM EST)

Korea

Kospi opened +0.4%
(KR) South Korea President Moon said to propose lowering the voting age by 1 year to 18, proposed two 4-year presidential terms vs one 5-year term currently; The proposals are part of the constitutional amendment bill. – US financial press
(KR) Bank of Korea Gov Lee: Sees little market impact from Fed interest rate hike; Don’t see capital outflow on rate gap in recent moves
(KR) Hana Financial says Bank of Korea (BoK) may raise rates in May and H2 2018 – US financial press

North America

US equity markets ended mostly lower: Dow -0.2%, S&P500 -0.2%, Nasdaq -0.3%, Russell 2000 +0.6%
S&P500 Consumer Staples -1.2%; Energy +2.6%
(US) DOE CRUDE: -2.6M V +2.5ME;
(US) US House and Senate leaders said to agree on $1.3T omnibus spending bill; Republicans said to expect vote during Thursday afternoon – financial press
(US) The House Republican Freedom Caucus said that it is opposed to the spending measure.
(US) FOMC RAISES TARGET RATE RANGE 25BPS TO 1.50-1.75% (AS EXPECTED); Affirms Median forecast for end-2018 rate 2.125% (prior 2.125%)
Summary of Comments from Fed Chair Powell’s Post Rate Decision Press Conference
Overall financial conditions remain accommodative
Trying to take middle ground on rate hikes, consisting of further gradual rate hikes as long as economy remains on path
Rate path could become more or less gradual depending on how economy is doing
Cannot give exact number on how far they might allow inflation to rise above 2% target but goal is keeping around 2% level;
No sense in data that we are on the cusp of an inflation acceleration
There’s no thought that changes in trade policy should have any effect on current outlook;Trade policy has become a concern for businesses

Europe

(EU) US Commerce Dept: EU and US have agreed to begin discussion on trade issues; Talks will include discussions of steel and aluminum – joint statement with EU’s Malmstrom
(EU) EU Council Pres Tusk: economy continues to grow above expectations; Cautiously optimistic about receiving exemption from US aluminum/steel tariffs
(GE) Germany Finance Ministry Monthly Report: Feb Tax Rev +8.1% y/y; Indicators suggest German economic growth slowed at start of 2018
(ES) Catalan Parliament expected to meet tomorrow and nominate Turull as the new President – press
Looking Ahead: Bank of England (BoE) rate decision due later today

Levels as of 01:00ET

Hang Seng -0.5%; Shanghai Composite -0.6%; Kospi +0.5%
Equity Futures: S&P500 +0.1%; Nasdaq100 +0.1%, Dax +0.1%; FTSE100 flat
EUR 1.2337-1.2370 ; JPY 105.57-106.10; AUD 0.7736-0.7787 ;NZD 0.7222-0.7246
Feb Gold +0.6% at $1,329/oz; Feb Crude Oil +0.1% at $65.25/brl; Mar Copper -0.1% at $3.076/lb