Headlines/Economic Data
General Trend: Asian markets trade mixed after Tuesday’s sell off: Nikkei and Australian markets advance, while Chinese and South Korean equities pare gains.
Kiwi (NZD) underperforms ahead of Thursday’s RBNZ rate decision
Japan
Nikkei 225 opened +1.8%; closed +0.2%
TOPIX Electric Appliances Index +1.7%, Real Estate +1.4%, Iron & Steel +1.5%
Chip-related firm Sumco [3436.JP] gains over 12% after reporting FY results and guidance
Toyota[7203.JP]: Trades higher by over 5% after raising guidance
Softbank[9984.JP]: Trades higher by over 4% ahead of expected earnings report
Kirin Holdings [2503.JP]: Trades higher amid earnings speculation
(JP) Japan Dec Labor CashEarnings y/y: 0.7% v 0.5%e; Real Cash Earnings y/y: -0.5% v 0.1% prior
(JP) BOJ announcement related to daily bond buyingoperation: raises 3-5-yr offer
(JP) Japan Fin Min Aso: Cannot comment if Coincheck was hacked by North Korea at this point – Parliament
(JP) Japan Dec Preliminary Leading Index: 107.9 v 108.1e; Coincident Index: 120.7 v 120.5e
Looking Ahead: BoJ board member Suzuki expected to comment on Thursday, along with 30-year JGB auction
Korea
Kospi opened +1.2%, later pared gain
Chip makers trade mixed: Samsung Electronics declines, while Hynix gains over 2%
(KR) South Korea to take market stabilizingmeasures if needed
Samsung, 005930.KR Considering building a 2nd chip line in South Korea, amid rising demandfor semiconductors – Korean Herald
(KR) 7 out of 10 businesses in South Korea planning a Lunar New Year bonus; Avg bonus KRW1.161M v KRW1.129M y/y – Korean press
(KR) ~30 subsidiaries of South Korea family-controlled conglomerates may benewly subject to a ban on inter-affiliate trading when antitrust watchdogtoughens a related rule – Korean press
(KR) Bank of Korea (BOK) sells KRW2.41T in 2-yr monetary stabilization bonds(MSBs) at 2.16%
China/Hong Kong
Hang Seng opened -0.3%, Shanghai Composite +0.1%
Shanghai pares opening gains amid weakness in property sector
Hang Seng Information Tech Index +3.5%, Consumer Goods +1.7%, Financials +1.7%, Materials +1.6%,Energy +1.6%
(CN) China Ambassador to US Tiankai: despite misjudgment from some in the United States, China will remain confident in its path of development and those hoping otherwise should face the reality – CD
(CN) China PBoC: Skips OMO (10th straightsession) v skipped prior; Net drain CNY100B v CNY80B prior
USD/CNY (CN) PBOC SETS YUAN REFERENCE RATE AT 6.2882 V 6.3072 PRIOR
(CN) China banks have raised mortgage rates in several cities – Chinese press
(CN) China to probe fake information from listed companies – Xinhua
(CN) China PBOC sells CNY120B in 3-month MOF Deposits at 4.50%
(CN) China files new challenges on US tariffs on solar panels and washing machines at the World Trade Organization – financial press
Looking Ahead: China Jan FX Reserves due to be released later today
China Jan Trade Balance may be released on Thursday
Australia/New Zealand
ASX 200 opened +0.5%; closed %
ASX 200 Resources Index+1.9%, Energy +1.7%, Consumer Discretionary +1.8%, Financials +0.2%; Utilities-0.8%
Rio Tinto [RIO.AU]: Trades higher by over 3% ahead of later today earnings report
Commonwealth Bank [CBA.AU]: Pares gain seen after H1 earnings report
(NZ) NEW ZEALAND Q4UNEMPLOYMENT RATE: 4.5% V 4.7%E (Lowest Level Since Financial Crisis)
(AU) Australia Jan Foreign Reserves (A$): 65.3B v 85.4B prior
CBA.AU Reports H1 (A$) cash profit4.8B v 5.2Be; Net interest income 9.25B v 9.3Be; Rev 21.3B, +2% y/y
(AU) Australia AOFM sells A$600M v A$600M indicated in Nov 2028 bonds, avgyield 2.8862%, bid to cover 5.43x
(AU) Australia PM Turnbull: No plans to allow big 4 Australia bank mergers
(AU) Australia Jan AIG Performance of Construction Index: 54.3 v 52.8 prior
Looking Ahead: Reserve Bank of New Zealand(RBNZ) rate decision due on Thursday
Other Asia
(IN) Reserve Bank of India (RBI) policy meeting due later today (no changes expected)
North America
US equity markets ended higher: Dow +2.3%, S&P500 +1.7%, Nasdaq +2.1%, Russell 2000+1.1%
S&P500 Materials +3.2%, Technology +2.8%
Wynn Resorts [WYNN]: Steve Wynn has resigned as CEO and Chairman; promotes Matt Maddox CEO and Boone Wayson Chairman; effective immediately
Supervalu [SVU]: Activist investor Blackwells (~4.4% stake) said to urge board to explore either sale or breakup – US financial press
(US) Treasury Sec Mnuchin: administration is monitoring markets situation but long-term fundamentals are very strong,markets are functioning normally in terms of liquidity; Correct to say that I support a strong Dollar; US debt plan hasn’t impacted markets at the moment; debt market is one of the most liquid in the world
(US) Pres Trump: if we don’t get rid of immigration loopholes, ‘let’s have a shutdown’
(US) Fed’s Bostic (2018 voter, dove): See slow gradual pace of rate rise, if growth is robust
(US) US House has votes to pass stopgap funding bill to fund government until March 23rd; final vote 245 to 182; The bill now moves to the senate, where lawmakers are expected to rewrite the measure to eliminate higher defense spending and potentially attach a bipartisan deal to raise budget caps.
(US) Weekly API Oil Inventories: Crude: -1.1M v +3.2M prior
Looking Ahead: Fed’s Dudley due to speak during NY morning, Weekly DOE Crude Oil Inventories to be released
Europe
(EU) European Commission wants to punish UK non-compliance during the Brexit transition by summarily cutting off the country’s access to parts of the single market – FT citing draft treaty
(IE) Ireland is pushing for a settled “legal text” over the Brexit border question as early as next month in a move that threatens once again to derail the Brexit negotiations – Telegraph
(UK) National Institute of Economic and Social Research (NIESR): Forecasts UK 2018 and 2018 GDP growth at 1.9% vs 1.7% in Nov
Levels as of 01:00ET
Nikkei225 +0.2%, Hang Seng +0.4%; Shanghai Composite -1.5%; ASX200 +0.8%, Kospi -1.4%
Equity Futures: S&P500 -0.8%; Nasdaq100 -0.9%,Dax -0.6%; FTSE100 -1.3%
EUR 1.2393-1.2372; JPY 109.71-109.14; AUD 0.7909-0.7878;NZD 0.7346-0.7305
Apr Gold +0.2% at $1,332/oz; Mar Crude Oil +0.8% at $63.88/brl; Mar Copper -0.2% at $3.21/lb
