Indices Trade Mostly Higher After US Gains

Mar 03 20, 07:36 GMT

General Trend:

Shanghai Composite rises and trades above the 3,000 psychological level in early trading; China’s additional cases of coronavirus declined to lowest level since Jan, additional deaths also declined
Sectors moving higher in Shanghai include IT and Telecom Services, property index lags after over 5% gain during the prior session
Gainers in HK include drug companies and tech firms; Gaming companies trade generally higher
Japanese equities lag amid the declines in USD/JPY; Declining sectors include Securities, Electric Appliances and Insurance.
Fast Retailing is expected to issue Feb sales figures later today
Telecom Services, Utilities, Resources and Consumer sectors are among the gainers in Australia, financials lag amid RBA rate cut
RBA cut rates to a record low 50bps amid mixed analysts’ expectations, the rate cut was fully priced in by money markets
RBA reiterated that it is prepared to ease monetary policy further [Reminder: RBA Gov Lowe has previously said there may come a point where QE is needed, seen as when Cash rate is at 0.25%]
Aussie Q4 GDP data due on Wednesday’s session
BOJ announced another unscheduled repo operation (2nd straight session); 10-yr JGB auction has lowest bid to cover since 2016

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened -0.8%
(AU) RESERVE BANK OF AUSTRALIA (RBA) CUTS CASH TARGET RATE BY 25BPS TO 0.50%, AS EXPECTED; in response to coronavirus outbreak
(AU) Australia PM Morrison: 21 of 34 coronavirus patients have recovered; reiterates fiscal response to virus will be targeted, measurable and scalable; would expect any RBA rate cut to be passed to consumer in full
(AU) AUSTRALIA Q4 CURRENT ACCOUNT: (A$): 1.0B V 2.4BE
(AU) AUSTRALIA JAN BUILDING APPROVALS M/M: -15.3% V +1.0%E; Y/Y: -11.3% V +2.4%E
(AU) Australia Roy Morgan Weekly Consumer Confidence: 104.8 v 108.3 prior
(AU) Australia confirmed its first 2 cases of person to person transmission of the coronavirus – Press
(NZ) New Zealand Treasury: Virus is weighing on economic outlook, sees risk of substantial negative impact to last for several quarters

Japan

Nikkei 225 opened +1.4%
(JP) Bank of Japan (BOJ) to buy ¥500B in JGBS in unscheduled repo operation (2nd consecutive day)
5486.JP Reportedly considering $1B sale of iron castings provider Waupaca Foundry – press
HMC Cutting production at 2 Saitama plants due to more “supply chain issues” – press
(JP) Japan PM Abe: Will do utmost to ensure stable supply of necessities, Next year’s budget takes downside risks into account, will make full use of budget reserves to deal with coronavirus
(JP) Japan Fin Min Aso: Refrain to comment on G7 Fin Min talks; Want to coordinate with other countries on coronavirus, a thorough response is needed
(JP) Japan thinks that North Korea projectiles yesterday were likely ballistic missiles – Japan press
(JP) Japan MoF sells ¥2.1T v ¥2.1T indicated in 10-year JGBs; avg yield -0.100% v -0.051% prior; bid to cover 3.20x v 3.63x prior (lowest BTC since 2016)

Korea

Kospi opened +2.5%
(KR) SOUTH KOREA FINAL Q4 GDP Q/Q: 1.3% V 1.2%E; Y/Y: 2.3% V 2.2%E
(KR) SOUTH KOREA FEB CPI M/M: 0.0% V 0.0%E; Y/Y: 1.1% V +1.3%E
(KR) Following yesterday’s projectile launch, North Korea leader Kim said to have overseen the launch
(KR) South Korea interior min Young: Extra budge tto deal with coronavirus to be KRW6.2T – Yonhap citing comments at interpellation session
(KR) South Korea Defense Chief Jeong Kyeong-doo: North Korea is concentrating on its weapons development while remaining unresponsive to offers for talks – Yonhap
(KR) South Korea considering banning short selling if sell off continues – Korean press
(KR) South Korea reports additional 477 coronavirus cases; total 4,812; 3 additional deaths, total 34 – KCDC
(KR) South Korea President Moon: The economy is facing grave situation; have asked govt agencies to be on 24-hour emergency system – speaking from cabinet meeting

China/Hong Kong

Hang Seng opened +0.5%; Shanghai Composite opened +1.2%
(CN) China Ambassador to the UN: coronavirus outbreak has had a negative impact on the Chinese economy but China is doing what it can to revitalize its economy
(CN) China National Health Commission Coronavirus Update for March 2nd: 125 additional cases v 202 prior; Additional deaths 31 v 42 prior; Hubei: 114 additional cases v 196 prior; additional deaths 31 v 42 prior
(CN) China President Xi stresses scientific research related to coronavirus during Beijing inspection – Chinese press
(CN) China PBOC sets Yuan Reference Rate: 6.9516 v 6.9811 prior
(CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations for the 11th consecutive session, Net CNY0B v CNY0B prior
(CN) Shenzhen, China has seen an 80% decline in home sales amid the coronavirus outbreak, cites data from Midland Realty – SCMP

Other

2317.TW Said to receive rush orders related to Nintendo Switch – Taiwan press
(G7) Draft statement: As of now does not include language calling for fresh fiscal spending or coordinated interest rate cuts by central banks; Will pledge to work together to mitigate damage to economies from coronavirus – working and language still being discussed and could change before released Tuesday/Wednesday

North America

(US) Pres Trump: do not think that there needs to be a national emergency declaration, but could always do that at a later date
(US) VP Pence: there are 43 coronavirus cases in the US; there may be some cluser cases of coronavirus; could be a vaccine trial started in 6 weeks – comments at White House
(US) FDA: Says it and the CDC have taken action to increase access to respirators including N95s
(US) US President Trump: House Democrats should propose a ‘very simple’ 1 year payroll tax cut

Europe

(EU) ECB statement: We stand ready to take appropriate and targeted measures as necessary and commensurate with underlying risks

Levels as of 12:15ET

Hang Seng +0.1%; Shanghai Composite +0.9%; Kospi +1.3%; Nikkei225 -0.8%; ASX 200 +0.7%
Equity Futures: S&P500 -0.1%; Nasdaq100 -0.1%, Dax -0.5%; FTSE100 -1.0%
EUR 1.1156-1.1120; JPY 108.53-107.69; AUD 0.6566-0.6510; NZD 0.6282-0.6248
Commodity Futures: Gold +0.3% at $1,599/oz; Crude Oil +2.3% at $47.84/brl; Copper -0.1% at $2.60/lb