Aussie Yields Jump As RBA Gov Signals Rate Stability

Feb 05 20, 06:51 GMT

General Trend:

Sectors moving higher in Shanghai include Telecom Services, IT, Consumer Discretionary and Industrials
Chinese automakers rise amid speculation about possible industry support, BYD up over 8%
Airlines trade generally higher in HK, track earlier gains in the US
Gaming companies trade mixed in HK after earlier gains in the US
Sectors moving higher in Japan include Insurance, Electric Appliances and Iron/Steel.
Japanese companies expected to report earnings later today include Mazda, Subaru, AGC and Square Enix
Toyota Motor is due to report its earnings on Feb 6th
Gainers in Australia include Resource and Energy companies
Taiwanese DRAM maker Nanya Technology rises over 4%, Jan sales +5.7% y/y (first rise since 2018)
Singapore Dollar (SGD) weakens over 0.5% as central bank signaled there is room to ease policy
PBOC skipped today’s reverse repo operation, noted ample liquidity
Indonesia Central Bank: Policy adjustments are not limited to lowering key rate
Thailand Central Bank due to hold policy meeting later today
Companies expected to report earnings during the NY morning include GM, Merck and Spotify.

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.6%
(NZ) NEW ZEALAND Q4 UNEMPLOYMENT RATE: 4.0% V 4.2%E; Employment Change Q/Q: 0.0% v +0.3%e ; Y/Y: 1.0% v 1.2%e
(AU) Reserve Bank of Australia Gov Lowe: Further cuts would put pressure on Australian Dollar – The Year Ahead at the National Press Club
(AU) Australia Jan Final CBA PMI Services: 50.6 v 48.9 prelim
(AU) ANZ sees Australia Q1 GDP -0.1% due to coronavirus and bushfires
(AU) Australia sells A$2.5B v A$2.5B indicated in 1.25% May 2032 bonds, avg yield 1.0892% v 1.2394% prior, bid to cover 2.97x v 3.29x prior
(NZ) New Zealand Jan ANZ Commodity Price Index m/m: -0.9% v -3.4% prior (2nd consecutive decline); index did not capture the impact of the coronavirus
RIO.AU Launches new Australian payment terms; will immediately begin transitioning small Australian suppliers to shorter payment terms that will see them paid within 20 days of receipt of a valid invoice

Japan

Nikkei 225 opened +1.2%
(JP) Bank of Japan (BOJ) Dep Gov Wakatabe: Coronavirus raising uncertainties for global economy, given current situation need to be mindful of chance downside economic risks materialize and affect prices
6758.JP Reports 9M Net ¥569.6B v ¥828.4B y/y; Op ¥810.0B v ¥811.5B y/y; Rev ¥6.51T v ¥6.54T y/y (yesterday after the close)
6753.JP Reports 9M Net ¥52.4B v ¥63.1B y/y; Op ¥66.4B v ¥68.3B y/y; Rev ¥1.76T v ¥1.77T y/y (yesterday after the close)
(JP) Japan Jan Final PMI Services: 51.0 v 52.1 prelim

Korea

Kospi opened +0.9%
(KR) South Korea Jan Foreign Reserves: $409.7B v $408.8B prior (fresh record high)
(KR) South Korea and Japan to hold working level talks this week on trade and history dispute – Yonhap
003490.KR South Korean airlines said to have halted a combined 57% of their flights to China – Yonhap

China/Hong Kong

Hang Seng opened +0.7%; Shanghai Composite opened +0.3%
(CN) China Hubei Corona virus update for Feb 4th: 3,156 additional cases v 2,345 prior; additional deaths 65 v 64 prior
(CN) China National Health Commission: Confirmed cases 24,324 v 20,438 prior; Death toll of 490 v 425 prior
(HK) Hong Kong Jan PMI: 46.8 v 42.1 prior (highest reading since June 2019)
(CN) CHINA JAN CAIXIN PMI SERVICES: 51.8 V 52.0E
(CN) China PBOC Official: Digital currency to be issued soon – US financial press
(CN) China PBOC sets Yuan Reference Rate: 6.9823 v 6.9779 prior (weakest fix since Dec 27)
(CN) China PBoC Open Market Operation (OMO): Skips Reverse Repo operations v injects CNY500B in 7-day, 14-day repos prior; Net drain CNY30B v injections CNY400B prior

Other

(SG) Singapore Jan PMI: 51.4 v 51.0 prior (highest reading since May 2019, 3rd consecutive month of expansion)
(SG) Singapore Central Bank (MAS): Policy stance remains unchanged, there is sufficient room within the band to accommodate S$NEER easing, will not move up April policy meeting
2317.TW Chairman Liu: Cutting FY20 Rev to 1-3% y/y (prior 3-5% y/y), noted current conditions – text

North America

(US) PETE BUTTIGIEG LEADS DEMOCRATIC IOWA CAUCUS RESULTS WITH 62% PRECINCTS REPORTING: Buttigieg 26.9%; Sanders 25.1%; Warren 18.3%; Biden 15.6%
Follow Up: PETE BUTTIGIEG LEADS DEMOCRATIC IOWA CAUCUS RESULTS WITH 71% PRECINCTS REPORTING
NKE Provides update on impact of Coronavirus in Greater China; we expect the situation to have a material impact on our operations in Greater China
BA Will not cancel CEO Calhoun bonus due to 737 Max – US financial press
(US) President Trump: Tariff strategy on China has worked; price transparency will cut healthcare costs, I am taking on Big Pharma companies – State of the Union

Europe

OPEC+ Delegate: OPEC+ Joint Technical Committee did not discuss oil cuts today but will revisit matter tomorrow; studied 200-400K bpd virus impact on oil demand
RNO.FR Korea unit may halt production for a week beginning on Feb 10th due to parts shortage [amid coronavirus impact] – South Korean press

Levels as of 12:15ET

Hang Seng +1.4%; Shanghai Composite +1.5%; Kospi +0.6%; Nikkei225 +1.7%; ASX 200 +0.4%
Equity Futures: S&P500 -0.2%; Nasdaq100 -0.1%, Dax -0.3%; FTSE100 -0.1%
EUR 1.1047-1.1033; JPY 109.53-109.37; AUD 0.6746-0.6724; NZD 0.6501-0.6478
Commodity Futures: Gold +0.4% at $1,562/oz; Crude Oil +1.2% at $50.20/brl; Copper +0.9% at $2.57/lb