China PMIs Hit Record Lows In Feb

Mar 02 20, 07:03 GMT

General Trend:

Japanese equity markets reverse losses after comments by BoJ Gov, BOJ offered to buy JGBs through repo operations (first time since March 2016)
Sectors moving higher in Japan include Real Estate, Securities, Electric Appliances and Marine/Transportation
Nikkei later trims gains amid reported projectile launches by North Korea
Shanghai Property index rises; There has been recent speculation that the PBOC could further ease policy, China reported decline in additional coronavirus cases and additional deaths
HK gaming companies trade mixed, Macau gaming revenues dropped over 87% in Jan
Kospi rises as chipmakers move higher, US semiconductor ETF rose 2% on Friday’s session
Australian equities lag ahead of Tuesday’s RBA decision, Financial sector declines over 1.4%
Some analysts now expect the RBA to cut rates at tomorrow’s meeting; rate cut is fully priced in by money markets
However former RBA board member said the RBA is likely to keep rates on hold tomorrow, but the central bank might cut rates ‘aggressively’ in April if conditions worsen
Provincial gov’t of Hainan (China) confirms takeover of Chinese conglomerate HNA

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened -1.2%
(NZ) NEW ZEALAND Q4 TERMS OF TRADE INDEX Q/Q: 2.6% V 0.8%E
(AU) AUSTRALIA Q4 CORP OP PROFIT Q/Q: -3.5% V -1.3%E; INVENTORIES Q/Q: +0.3% V -0.1%E
(AU) Reserve Bank of Australia (RBA) head of payments policy Richards: RBA has not made a decision on ‘no surcharge’ rules and that the RBA wasn’t certain it had the legal authority to limit them; RBA may decide treat online and in-store sales separately – speaking to Senate committee Friday
(AU) Australia Feb Final CBA PMI Manufacturing: 50.2 v 49.8 prelim (highest since Sept 2019)
ANZ.AU New Zealand Regulator: ANZ breached lending obligations, to return NZ$29.4M to customers for breach
(AU) Australia Feb ANZ Job Advertisements m/m: 0.7% v 3.8% prior
(AU) Former Reserve Bank of Australia (RBA) board member Edwards: RBA likely to keep rates on hold on Tuesday (March 3rd), RBA may cut rates ‘aggressively’ in April if conditions worsen
(AU) Australia Treasurer Frydenberg: Fiscal response to coronavirus will be considered, responsible and targeted, the economy is prepared to deal with the challenges from the coronavirus

Japan

Nikkei 225 opened -1.4%
(JP) Bank of Japan (BOJ) Gov Kuroda: Seeing unstable moves in financial markets, will strive to provide ample liquidity and ensure liquidity through operations and asset purchases, appropriate market operations
(JP) BoJ to buy ¥500B in JGBs via repos (unscheduled)
(JP) JAPAN Q4 CAPITAL SPENDING (CAPEX) Y/Y: -3.5% V -2.5%E; CAPITAL SPENDING EX-SOFTWARE: -5.0% V -2.0%E
(JP) Japan PM Abe: Looking to compile law to enable declaration of emergency
(JP) Japan Feb Final PMI Manufacturing: 47.8 v 47.6 prelim (lowest reading since May 2016, 10th consecutive month of contraction)
4544.JP Confirms it has a unit developing coronavirus testing kit

Korea

Kospi opened +0.6%
(KR) South Korea Feb PMI Manufacturing: 48.7 v 49.8 prior (lowest reading since Oct 2019, 2nd consecutive month of contraction)
(KR) South Korea Fin Min Hong: Targeting to submit extra budget to Parliament March 5th
(KR) According to South Korea Defense Ministry, North Korea fired 2 unidentified projectiles
(KR) Follow Up: South Korea extra budget expected to be much larger than budget made for MERS outbreak
(KR) On Sunday South Korea reported 586 new coronavirus cases, bringing the total cases to 3,736 – Press
011070.KR Confirms has halted operations at factory in Gumi due to worker being confirmed with coronavirus

China/Hong Kong

Hang Seng opened -0.2%; Shanghai Composite opened +0.7%
(CN) CHINA FEB MANUFACTURING PMI (GOVT OFFICIAL): 35.7 V 45.0E (lowest on record; 1st contraction in 6 months); Non-Manufacturing PMI: 29.6 v 51.0e (record low); Composite PMI: 28.9 v 53.0 prior
(CN) CHINA FEB CAIXIN PMI MANUFACTURING: 40.3 V 46.0E (record low)
(HK) Macau Jan Gaming Rev (MOP) 3.1B v 22.8B prior; Y/Y: -87.9% v -13.7% prior
(CN) China National Health Commission Coronavirus Update for March 1: 202 additional cases v 427 Feb 28th; Additional deaths 42 v 47 Feb 28th, Hubei:196 additional cases v 423 prior; additional deaths 42 v 45 prior
(CN) China PBOC sets Yuan Reference Rate: 6.9811 v 7.0066 prior (strongest setting since Feb 17)
(CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations for the 10th consecutive session, Net CNY0B v CNY0B prior

Other

(PH) Philippines Central Bank (BSP) Chief Diokno: Feb CPI likely near low end of 2.4-3.2% est

North America

(US) Joe Biden wins the South Carolina primary with 48% of the vote; Sanders is second with 20% of the vote; Steyer quits the race
(US) Pete Buttigieg (D) said to plan to suspend Presidential campaign on Sunday night – financial press
UAL CEO Munoz: Highly likely will need to cut additional flights due to weaker demand related to coronavirus – speaking to employees
(US) Port of long Beach Jan Total Loaded Inbound Containers 309.9K v 323.2K prior; Total Containers 626.8K v 665.3K prior (busiest US port with Asia trade)
NXPI Guides Q1 coronavirus Rev impact to be at lower end of $50-150M guided (prior guided Rev $2.20-2.26B) v $2.23Be
(IQ) Rocket hits Baghdad Green Zone near US Embassy
(US) Goldman sees Fed cutting rate by 50bps by March 18th
Note: (US) VP Pence to hold briefing on coronavirus at 17:00 ET Monday, March 2nd from White House
(US) Pres Trump: to meet with drug companies on Monday [at 3 PM EST] to discuss progress on coronavirus vaccines

Europe

(UK) Un-named officials warn that UK, EU trade talks could break down within “weeks” – financial press
(FR) France has recorded 100 cases of the coronavirus as of Sunday, the country also has 2 deaths related to the virus – Press
(IT) Italy Civil Protection Authority reported that the country now has 1,694 confirmed coronavirus cases vs 1,128 on Saturday, reports deaths from the coronavirus have risen to 34; Delta Airlines is suspending its US flights to Milan – press
(DE) As of Sunday (March 1st), Germany coronavirus cases said to have almost doubled to 129 cases – UK Press
(IT) Italy govt announced €3.6B stimulus package to deal with coronavirus – FT

Levels as of 12:15ET

Hang Seng +0.6%; Shanghai Composite +3.1%; Kospi +0.9%; Nikkei225 +0.8%; ASX 200 -0.8%
Equity Futures: S&P500 +0.5%; Nasdaq100 +0.6, Dax +0.5%; FTSE100 +0.7%
EUR 1.1074-1.1037; JPY 108.38-107.39; AUD 0.6546-0.6470; NZD 0.6249-0.6199
Commodity Futures: Gold +2.2% at $1,601/oz; Crude Oil +2.9% at $46.05/brl; Copper +1.6% at $2.57/lb