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

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  • 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
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