Headlines/Economic Data
General Trend: Asian equities trade generally lower
Nikkei 225 declines despite BoJ bond operation; another heavy day for Japan corporate earnings
South Korean chip makers decline over 3%
Sony names CFO as new CEO
Japan’s Mitsubishi Electric gains over 1%, as it raised its FY outlook amid higher profits in industrial automation systems business
REITs and Utilities underperform amid rise in global bond yields
Amazon and Apple gain in the afterhours following earnings, while Alphabet declines
Commodity currencies underperform
Markets looking ahead to upcoming US payrolls report
Australia/New Zealand
ASX 200 opened flat; closed +0.5%
ASX 200 Energy Index +2%, Resources +0.7%, Financials +0.5%; REIT -1.2%, Utilities -0.4%
Building materials firm James Hardie [JHX.AU] trades higher by over 4%: Reports Q3 adj Net $69.9M v $62Me; EBIT $97.4M v $92Me; Rev $495M v $493Me
Woolworths [WOW.AU]: Gains over 2% amid positive broker commentary
Telstra [TLS.AU]: Declines over 0.5% after announcing A$273M impairment charge related to US video business
(AU) Australia sells A$500M in 2047 bonds, avg yield 3.4359%, bid to cover 2.53X
(AU) Australia Q4 PPI Q/Q: 0.6% v 0.2% prior; Y/Y: 1.7% v 1.6% prior
(NZ) New Zealand Jan ANZ Consumer Confidence: 126.9 v 121.8 prior
(NZ) New Zealand Dec Net Migration: 5.70K v 5.61K prior
(NZ) New Zealand Dec Building Permits M/M: -9.6% v +9.6% prior
China/Hong Kong
Hang Seng opened -0.2%, Shanghai Composite -0.8%
Hang Seng Energy Index +2.6%, Materials +1.1%; Telecom -0.7%
(CN) PBOC SETS YUAN REFERENCE RATE AT 6.2885 V 6.3045 PRIOR
(CN) China PBoC: Skips OMO (7th straight session) v skipped prior; – For the week, the PBoC drained a net of CNY760B v CNY320B net drain w/w
(CN) According to China Securities Times Commentary piece the yuan (CNY) rate becomes less predictable
(CN) Researchers see China keeping benchmark interest rate unchanged (in line with recent reports) – China Daily
Japan
Nikkei 225 opened -0.5%; Closed -0.9%
TOPIX Real Estate Index -0.9%
Nomura [8604.JP]: Declines over 2.5% after reporting Q3 results
Sony [6758.JP]: Says CEO Hirai to become Chairman and CFO Yoshida to become CEO, effective April 1st
(JP) BOJ announcement related to daily bond buying operation: To buy ¥450B in 5-10 yr JGBs vs ¥410B prior; Offers to buy unlimited amount of 10-yr JGBs at 0.11% in special fixed-rate operation
(JP) BoJ: Again no takers in 5-10 year JGB fixed-rate buying operation [**Note: There were also no bidders in the prior fixed-rate operation held in July 2017]
(JP) Japan Monetary Base Y/Y: 9.7% v 11.2%e prior
(JP) Japan Chief Cabinet Sec Suga: No plan for US Vice President Pence to meet with Finance Min Aso when he visits Japan from Tuesday Feb 6th; No plans to resume Japan-US economic dialogue during Pence’s visit next week.
Korea
Kospi opened -0.1%
Chip makers trade lower: Samsung Electronics and Hynix decline by over 3%
North America
US equities ended mixed: Dow +0.1%, S&P500 -0.1%, Nasdaq -0.4%, Russell 2000 +0.3%
S&P500 Real Estate -1.8%, Utilities -1.6%; Energy +1%, Financials +0.9%
Apple [AAPL]: Gained over 3% in the afterhours: Reports Q1 $3.89 v $3.82e, Rev $88B v $86.3Be; Guides Q2 Rev $60-62B v $65.4Be; Q1 iPhone shipments 77.3M v 78.3M y/y (v 80Me)
Amazon [AMZN]: Gained over 6% in the afterhours: Reports Q4 $3.75 v $1.85e, Rev $60.5B v $60.0Be; Guides Q1 Rev $47.8-50.8B v $48.9Be
Alphabet [GOOGL]: Declines over 2% in afterhours: Reports Q4 $9.70 adj v $10.12e, Rev $25.8B (ex $6.45B TAC) v $25.7Be; authorizes $8.6B repurchase of Class C capital stock
AT&T [T]: Said to have hired Bank of America to help examine divestiture of data center business – US financial press
(US) House mulling vote next week on stopgap spending bill to fund govt through March 22nd – Politico
Europe
(EU) ECB’s Nowotny: we are now in a situation where we should end asset purchase program; Halting asset purchase program will bring a rise to long-term interest rates; ECB will decide on the future of the asset purchase program by Sept – press
(EU) Some ECB officials reportedly would like clearer interest rate guidance on concerns that vague language will increase market volatility – press
(UK) PM May advisers reportedly considering customs union deal following Brexit – press
(UK) BOE’s Brazier: BOE wants to put insurance companies and pension funds through stress simulations
(DE) Germany CSU Scheuer (Bavaria): ‘Large’ barriers remain in Germany government talks [**Note: The comments follow the government talks in Berlin]
Deutsche Bank [DBK.DE]: CFTC orders Securities unit to pay $70M penalty in relation to alleged attempted manipulation of US dollar (USD) ISDAFIX benchmark swap rates – US financial press
Levels as of 01:00ET
Hang Seng flat; Shanghai Composite -0.4%; Kospi -1.6%
Equity Futures: S&P500 -0.1%; Nasdaq100 +0.5%, Dax -0.2%; FTSE100 flat
EUR 1.2488-1.2519 ; JPY 109.23-109.71; AUD 0.7994-0.8046 ;NZD 0.7362-0.7406
Feb Gold +0.2% at $1,350/oz; Feb Crude Oil +0.5% at $66.11/brl; Mar Copper flat at $3.215/lb
