General Trend:
- Financial and property shares decline in early trade in Shanghai, IT companies rise
- Aluminum giant Rusal declines after Q4 results
- Declines in Renesas weigh on Japan’s Electric Appliances index
- Mizuho declines over 1% after disclosing charges, Japanese brokerage firms and banks drop
- Japan comments on Jan prelim coincident index data: Index signals possible downward turning point
- China Finance Min: Central government to help local governments with fiscal issues
- Australian Dollar (AUD) and bond yields pare declines seen after weaker retail sales data
- Thai Baht (THB) weakens ahead of Constitutional Court ruling
- ECB decision seen later today
- China Feb FX reserves expected later today, monthly trade balance expected on Friday
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.3%
- (AU) Australia Feb AiG Performance of Construction Index: 43.8 v 43.1 prior
- (AU) AUSTRALIA JAN TRADE BALANCE (A$): 4.5B V 2.8BE; Exports m/m: +5% v -2% prior; Imports m/m: +3% v -6% prior
- (AU) AUSTRALIA JAN RETAIL SALES M/M: 0.1% V 0.3%E
- (AU) UBS now sees RBA cutting rates two times in 2019, by 25bps in July and again in August by 25bps (prior saw 1 cut in Nov 2019 and 1 in H1 2020)
- (AU) Australia Feb Foreign Reserves: A$68.5B v A$61.3B prior
Japan
- Nikkei 225 opened -0.7%
- (JP) Japan Chief Cabinet Sec Suga: Important to grow US/Japan investment for mutual gain; declines comment on specific remarks in the Abe/Trump talks
- 6723.JP Renesas to pause chip production at six Japan facilities for up to two months, 2019 production is expected to decline by more than 10% – press
- 6723.JP Confirms considering partial suspension of production depending on demand
- 8411.JP Announces total of ¥680B in charges, cuts FY19 Net profit guidance to ¥80B v ¥570B prior (after the close yesterday)
- 9437.JP Targeting FY21 enterprise solutions sales of ¥120B – Nikkei
- (JP) Japan Feb Official Reserve Assets: $1.28T v $1.28T prior
- (JP) Japan Investors Weekly Net Buying of Foreign Bonds: ¥453.1B v ¥1.02T prior; Foreign Buying of Japan Stocks: -¥341.3B v -¥14.2B prior
- (JP) Japan MoF sells ¥700B v ¥700B indicated in 0.70% (prior 0.70%) 30-yr JGBs, avg yield: 0.621% v 0.587% prior, bid to cover 4.56x v 4.72x prior
Korea
- Kospi opens -0.1%
- Hyundai Motor [005380.KR ]: Reportedly considering suspending operations at 1 of 3 Chinese plants it operates with BAIC Group – press
- (KR) UN Security Council expected to report on North Korea sanctions evasion – South Korea Press
- NXPI Samsung said to be considering making an offer to acquire NXP – Korean press; Samsung later denies the report
- (KR) South Korea confirms has modified another joint drill with the US
China/Hong Kong
- Hang Seng opens -0.3%; Shanghai Composite opens +0.1%
- 486.HK Reports Q4 adj Net -$17.0M v +350M y/y; Rev $2.37B v $2.75B y/y
- (KR) Korea Energy Economics Institute: China coal demand to decrease 0.6% y/y until 2040; India coal demand to increase 3.4% y/y until 2040
- (CN) China Pension Fund Head Lou Jiwei: Reiterates China does not use yuan exchange rate to create trade advantages; China won’t make big concessions to the US in order to seal a trade deal, because many of their demands are already in motion
- (CN) China PBOC Open Market Operation (OMO): Skips OMO v skipped prior (6th consecutive skip); Net: CNY0B drain v CNY60B prior
- (CN) China PBoC sets Yuan Reference Rate: 6.7110 v 6.7053 prior
- (CN) China Fin Min Liu Kun: Tax cuts are top fiscal policy in 2019, especially small companies and manufacturers; Pressure to balance fiscal Rev and spending is very pronounced this year
- (US) President Trump: trade talks with China continue to move along well; there will be a good deal or no deal
- (CN) US cabinet manufacturers reportedly want to file large trade case against China – press
- HUAWEI.CN Files lawsuit against US Govt that challenges a law that labels the company a security risk and would limit its access to the American market for telecom equipment(as expected)
- (CN) Longi Green Energy [601012.CN]: There is no evidence that the company’s products have patent infringements (responds to media report related to US probe)
- (CN) China Hebei Province Party Chief: To eliminate 14Mt of steel capacity in 2019 and 14Mt in 2020
- (CN) China and EU plan to sign investment accord by 2020 – Financial Press
- (CN) China Securities Regulator (CSRC): To grant the IMF a RQFII license to invest in domestic capital markets
Other Asia
- (TW) Taiwan Central Bank Gov Yang: China capital controls delay yuan internationalization
- (TH) Thailand Constitutional Court is expected to issue ruling on whether to dissolve the Thai Raksa Chart Party at 3pm local time (3:00 AM ET) – local press
North America
- (US) FEDERAL RESERVE BEIGE BOOK: ECONOMY CONTINUED TO GROW IN LATE JAN AND FEB; WITH 10 OF 12 DISTRICTS REPORTING SLIGHT TO MODERATE PACE OF EXPANSION AND 2 SAYING GROWTH WAS FLAT
- (US) Kansas City Fed economist’s paper: Fed is starting to consider when to halt decline in reserves and grow the balance sheet
- (US) Federal Reserve Board votes 4-1 to maintain countercyclical capital buffer for banks at 0%; decided to end the qualitative test for the 2019 US bank stress tests
- (US) DEC TRADE BALANCE: -$59.8B V -$57.9BE (largest deficit since Oct 2008)
- (CA) China Customs Agency will increase inspections of canola oil from Canada
- (CA) Canada govt source: PM Trudeau to speak to the public regarding SNC-Lavalin issue this Thurs – press
- (US) President Trump to meet with Treasury Sec Mnuchin at 11:00 ET Thursday
Europe
- (UK) EU officials reportedly are pessimistic about possibility of a Brexit breakthrough within reach – press
- (UK) UK Cabinet said to expect Brexit deal defeat next week – Telegraph
- (EU) ECB reportedly to hold discussions on design of new targeted loans (TLTRO); To cut inflation projections through 2021 – press
Levels as of 12:50ET
- Hang Seng -0.8%; Shanghai Composite -0.2%; Kospi -0.8%; Nikkei225 -0.8%; ASX 200 +0.3%
- Equity Futures: S&P500 -0.2%; Nasdaq100 -0.2%, Dax -0.2%; FTSE100 +0.1%
- EUR 1.1303-1.1317; JPY 111.58-111.80; AUD 0.7022-0.7052; NZD 0.6765-0.6792
- Commodity Futures: Gold -0.2% at $1,285/oz; Crude Oil +0.1% at $56.30/brl; Copper -0.5% at $2.91/lb
