General Trend:
- Japanese equities pare losses amid speculation the BoJ may increase ETF purchases, US equity futures gain
- Australian equities rise, energy and financial sectors rise over 2.5%
- Chinese equities rise in early trading amid gains in the Telecom Services, IT and Financial sectors
- China reports another decline in additional cases and deaths related to coronavirus; China President Xi makes first ‘known’ visit to Wuhan since the virus outbreak; Hubei (epicenter of virus outbreak in China) said to consider allowing some people to travel
- China y/y CPI pace eased in Feb for the first time since early 2019, non-food inflation eased while pork price rise accelerated
- RBNZ Gov Orr said the central bank’s first unconventional measure would be negative rates, but reiterated still don’t need to use unconventional policy
- Australia PM commented on QE
- Business confidence eased in Australia and New Zealand amid coronavirus related concerns
- Japan 5-year JGB auction bid to cover hit multi-year low
- BOJ Gov and senior BoJ official commented on ETFs [there has been speculation that the BoJ could signal that it is willing to buy more ETFs]
- Japan confirms gov’t will submit emergency measures package to parliament today
- Trump administration’s coronavirus package might not initially include relief for the travel industry (US financial press); Trump is expected to hold news conference during Tuesday afternoon.
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -0.6 %
- (AU) AUSTRALIA FEB NAB BUSINESS CONFIDENCE:-4 V -1 PRIOR; BUSINESS CONDITIONS: 0 V 3 PRIOR
- QAN.AU Updates on coronavirus: Cuts international capacity by 25% for the next 6-months, brings total capacity cuts to 17% (prior 4%); to ground 38 airplanes; asking all employees to take paid or unpaid leave; cancels off market buyback planned to preserve A$150M in cash
- (AU) Australia Treasurer Frydenberg: Reiterates stimulus package to have an immediate economic impact, budget surplus is not the Govt’s focus
- (NZ) New Zealand Q4 Manufacturing Activity Q/Q: 2.4% v 1.2% prior; Activity Volume Q/Q: 2.7% v -0.3% prior
- (AU) Australia PM Morrison: Coronavirus impact on Australia may be greater than expected; risk aversion could lead to reduced spending and demand; fiscal measures must target productivity; Govt is highly aligned with RBA; QE is a matter for the RBA
- MSB.AU To evaluate REMESTEMCEL-L as possible treatment for coronavirus
- (NZ) New Zealand March Prelim Activity Outlook Index: -12.8 v +12.0 prior; Business Confidence: -53.3 v -19.4 prior
- (AU) Australia sells A$100M v A$100M indicated in 2.50% Sept 2030 Indexed Bonds, avg yield -0.3336%, bid to cover 3.65x
- (NZ) New Zealand Fin Min Roberston: RBNZ has room to move on rates, reiterates unconventional monetary policy not likely; economy may not grow much in H1
- (NZ) Reserve Bank of New Zealand (RBNZ) Gov Orr: Reiterates have not and still don’t need to use alternative monetary policy instruments – speech Principles on Using Unconventional Monetary Policy
Japan
- Nikkei 225 opened -1.1%
- (JP) Bank of Japan (BOJ) Gov Kuroda: Reiterates uncertainties increasing due to coronavirus; financial markets have been ‘volatile’; BOJ bought cumulative ¥2.0442T in ETFs since Oct of 2019 – speaking in parliament
- (JP) Japan PM Abe: Will submit emergency measure package to parliament today, working on second virus emergency package, will work with BOJ on measures if needed
- -(JP) Japan Ruling LDP Party sees need for ¥10-20T in stimulus to deal with Coronavirus – Japan press
- (JP) Japan govt to announce increase special financial for small and mid-size firms to ¥1.6T – press
- (JP) Bank of Japan (BOJ) Senior Official: Watching market moves daily, ready to responds to nervous market moves with fund supply, ETF purchases
- (JP) Japan Cabinet approves bill declaring emergency in Japan, Parliament expected to approve the bill this week
- (JP) Japan steel makers have frozen base wages for the 1st time in 7-years as trade war cuts demand – Nikkei
- (JP) Japan Feb M2 Money Supply Y/Y: 3.0% v 2.8%e; M3 Money Supply Y/Y: 2.5% v 2.3%e
- (JP) Japan Econ Min Nishimura: To refrain from commenting on daily market moves, closely watching impact of market movements on the economy
- (JP) Japan Fin Min Aso: Govt to announce second package of steps on corona virus later today; G7 has agreed to take fiscal and monetary steps as appropriate
- (JP) Japan MoF sells ¥1.9T v ¥1.9T prior in 0.1% coupon 5-year JGB: avg yield: -0.220% v -0.144% prior, bid to cover: 2.73x v 4.49x prior (BTC lowest since 2011)
Korea
- Kospi opened -0.4%
- (KR) Bank of Korea (BOK): Will actively use available policy tools to stabilize markets; To stabilizes markets, closely watching FX markets
- (KR) South Korea Govt to fine anyone found concealing their travel history and other important information that could help contain coronavirus – Yonhap
- (KR) South Korea Vice Fin Min Kim: Confirms to take steps in case of excessive one-sided moves in FX, to take further steps in stock marker if needed
- (KR) South Korea and Japan enforce entry restrictions against each other, putting more strain on ties – Japan press
- (KR) North Korea leader Kim says he led the long range missile drill on March 9th – Yonhap
- (KR) South Korea FSC: Will announce measures to strengthen stock short selling rules after the close today
- (KR) South Korea reports coronavirus cases in the last 24-hours: 131 additional cases, total 7,513
China/Hong Kong
- Hang Seng opened +1.0%; Shanghai Composite opened -0.8%
- (CN) CHINA FEB CPI M/M: 0.8% V 1.4% PRIOR; Y/Y: 5.2% V 5.2%E; PPI Y/Y: -0.4% v -0.3%E
- (CN) China National Health Commission Coronavirus Update for March 9th: 19 additional cases v 40 prior; Additional deaths 17 v 22 prior; Hubei: 17 additional cases v 36 prior; additional deaths 17 v 21 prior
- (CN) Hubei, China looking at plans to start allowing people to move from medium to low risk areas to start traveling with tech oversight – China State Media
- (CN) China PBOC sets Yuan reference rate: 6.9389 v 6.9260 prior
- (CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations for the 16th consecutive session, Net CNY0B v CNY0B prior
- (CN) China President Xi has arrived in Wuhan (1st known visit since start of coronavirus) – Xinhua
- (HK) Hong Kong Financial Sec Chan: SFC will continue to monitor short selling; HKMa will keep peg stable and watch market situation
- 410.HK Said to be in exclusive talks to be taken private in a $4.0B, HK$6.00/shr deal with Blackstone – financial press
North America
- (US) President Trump: Will discuss possible payroll tax cut with Congress and support for hourly wage earners so they don’t miss paychecks; New conference tomorrow on economic measures – Corona Virus Update
- (US) White House: President Trump has not had prolonged contact with known coronavirus patients, being monitored by his doctor; Trump has not been tested for virus
- (US) Trump coronavirus aid package will leave out travel industry for now, will include payroll tax cut and short term paid sick leave – US financial press
- (US) Treasury Sec Mnuchin: Having daily conversations with Fed Chair Powell, Trump is committed to use all tools for the economy
- CY Announces Completion of CFIUS Review on merger with Infineon Technologies: No unresolved national security concerns with respect to the proposed merger
- (US) Feb NFIB Small Business Optimism Index: 104.5 v 104.3 prior (early release)
Europe
- (IT) Italy PM Conte: Italy is adopting even tougher measures to combat coronavirus; confirms movement will be restricted throughout the country
- (EU) ECB confirms member of staff has coronavirus, has informed 100 staff that work with this member and mandated they will work from home
- (UK) Feb BRC Sales LFL Y/Y: -0.4% v 0.5%e
Levels as of 1:15ET
- Hang Seng +1.6%; Shanghai Composite +1.4%; Kospi +0.2%; Nikkei225 +1.1%; ASX 200 +3.1%
- Equity Futures: S&P500 +3.0%; Nasdaq100 +3.4%, Dax +5.2%; FTSE100 +2.5%
- EUR 1.1459-1.1356; JPY 104.57-102.02; AUD 0.6613-0.6548; NZD 0.6360-0.6292
- Commodity Futures: Gold -1.2% at $1,656/oz; Crude Oil +6.9% at $33.27/brl; Copper +2.8% at $2.56/lb
