General Trend:
- Chinese officials announced multiple support measures; PBOC injected CNY1.2T in daily liquidity (net injection CNY150B), cut the 7 and 14-day reverse repo rates by 10bps each; China securities regulator ordered certain brokerage firms to suspend their securities lending business, the regulator to also allow some share pledge contracts to be extended
- PBOC Adviser suggested that near-term MLF and LPR rate cuts are on the table
- China announced that it will continue to release frozen pork reserves after the Lunar New Year holiday [amid the coronavirus outbreak]
- The production impact of coronavirus on China remains uncertain; NDRC said China will resume factory output in ‘orderly manner’
- Various companies’ production said to be impacted amid coronavirus outbreak (including Sinopec, Hyundai Motor and Kia Motor)
- China Jan Caixin Manufacturing PMI does not mention coronavirus impact [in line with already released official PMI data]
- Financial, Industrial and Consumer Discretionary firms are among the largest decliners in Shanghai
- Gaming companies mixed in HK in early trading, overall Hang Seng index trades flat
- Gainers in HK include drug companies, banks and tech firms, decliners include energy and property firms
- Trade-sensitive Marine/Transportation index drops over 3% in Japan, Brokerage index drops over 1.8%
- Japanese companies expected to report earnings later today include Panasonic and Mitsubishi Electric
- Energy and Resources firms are among the decliners in Australia
- Agricultural Development Bank of China said to delay bond sale amid coronavirus concerns
- RBA expected to leave rates unchanged at Tuesday’s rate decision, interest rate futures are implying an ~20% chance of a rate cut
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -0.5%
- (AU) AUSTRALIA DEC BUILDING APPROVALS M/M: -0.2% V -5.0%E; Y/Y: 2.7% V -1.4%E
- (AU) Australia Jan Final CBA PMI Manufacturing Index: 49.6 v 49.1 prelim, Output 47.6 v 48.2 prior (lowest reading since series began)
- (NZ) New Zealand Dec Filled Jobs 2.2M, +0.2% m/m (5th consecutive rise)
- WOR.AU Appoints Chris Ashton CEO, effective Feb 24th following the retirement of Andrew Wood
- (AU) Australia Jan ANZ Job Advertisements M/M: +3.8% v -6.7% prior
Japan
- Nikkei 225 opened -1.4%
- 7201.JP Drafted contingency plans for UK post Brexit, which include closing the Sunderland plant (plan was created before new CEO was named) – press
- (JP) Japan Jan Final PMI Manufacturing: 48.8 v 49.3 prelim (9th consecutive month of contraction)
Korea
- Kospi opened -1.5%
- 051910.KR Reports FY19 (KRW) Net 376.1B v 1.52T y/y; Op 895.6b v 2.24T y/y; Rev 28.6T v 28.18T y/y, will close glass substrate business
- (KR) South Korea Finance Min: Will respond ‘sternly’ to price gouging of face masks amid coronavirus outbreak
- (KR) South Korea Jan PMI Manufacturing: 49.8 v 50.1 prior
China/Hong Kong
- Hang Seng opened -0.5%; Shanghai Composite opened -8.7%
- (CN) China PBOC to supply CNY1.2T via reverse repos of liquidity Monday (largest daily injection in 16-years), net injection CNY150B (calculated), to ensure liquidity is “reasonably ample” during the coronavirus outbreak
- (CN) China PBoC Open Market Operation (OMO): Injects CNY1.2T in 7-day and 14-day reverse repos in v skips prior; Net injects CNY150B v skips prior (as indicated); cuts rates on 7-day and 14-day reverse repo rates by 10bps to 2.40% and 2.55% respectively
- (CN) China Securities Regulator (CBIRC) suspends night trading sessions for futures, to allow some share pledge contracts to be extended, relaxes some asset management rules related to forcing banks to remove implicit guarantees for trillions of dollars of investments
- (CN) China Ministry of Finance (MOFCOM) will help pay 50% of interest for PBOC’s relending scheme to key enterprises in coronavirus control for up to 1-year
- (CN) China NDRC: Will resume factory output in an orderly manner; Will further increase food support, amid coronavirus outbreak
- (CN) Traders circulating unverified Twitter chatter by Chinese human rights activist Jennifer Zeng on stock market in China that no one is allowed to sell when the market resumes on Feb 3rd
- (PH) Philippines reports 1 death from coronavirus, the first outside China
- (CN) China Daily Briefing: 17,205 Coronavirus cases v 9,692 on Jan 31st; Death toll 361 vs 257 on Jan 31st
- (CN) China Hubei Corona virus update for Feb 2nd: 2,103 additional cases v 1,921 prior; additional deaths 56 v 45 prior; Total Hubei virus infections 9,074, deaths 294
- (CN) Thailand doctors successfully treat 70 year old Chinese woman with severe coronavirus symptoms using anti-flu and anti-HIV medications; patient tested negative for coronavirus after 48 hours of treatment
- (CN) China Dec Industrial Profits Y/Y: -6.3% v +5.4% prior
- 388.HK To allow listed companies to apply for delaying their earnings reports due to coronavirus – HK press
- 300750.CN Signed agreement with Tesla for battery supply
- USD/CNY (CN) China PBOC sets Yuan Reference Rate: 6.9249 v 6.8876 prior (weakest since Jan 13)
- (CN) CHINA JAN CAIXIN PMI MANUFACTURING: 51.1 V 51.0E (6th consecutive month of expansion)
- (CN) China PBoC Advisor Ma Jun: Possibility of Loan prime Rate (LPR) cut on Feb 20 has significantly increased – PBOC publication
Other
- (TW) Taiwan Jan PMI Manufacturing: 51.8 v 50.8 prior (highest reading since Aug 2018, 2nd consecutive month of expansion)
North America
- XOM Workers at Baytown Texas refinery (2nd largest US refinery) said to reject contract offer – financial press
Europe
- (UK) UK officially left the EU Friday evening, now it has until the end of the year to reach a trade agreement with the EU
- (EU) ECB chief economist Lane: Inflation is destined to return – press
Levels as of 12:15ET
- Hang Seng +0.1%; Shanghai Composite -7.9%; Kospi -0.2%; Nikkei225 -1.0%; ASX 200 -1.3%
- Equity Futures: S&P500 +0.7%; Nasdaq100 +0.9%, Dax +0.4%; FTSE100 +0.6%
- EUR 1.1095-1.1080; JPY 108.58-108.31; AUD 0.6705-0.6684; NZD 0.6472-0.6453
- Commodity Futures: Gold -0.2% at $1,585/oz; Crude Oil -0.0% at $51.55/brl; Copper +1.2% at $2.54/lb
