General Trend:
- Nikkei declined over 10% at one point during session; Softbank drops over 6% despite buyback announcement
- Circuit breaker was triggered for Japan’s TOPIX Banking Index FUTs
- Japanese equities later pare loss amid special operations by the BOJ
- Australian equities pare losses; PM Morrison said advice to gov’t is not to ban travel from Europe
- Chinese markets pare losses as officials announce measures
- China announces measures to support consumption and the funding situations of key companies
- Japan Fin Min Aso: Yen has been stable around ¥105, no need to fret over its moves
- USD/JPY rises despite declines on Nikkei; JGB Futures decline
- Commodity currencies (AUD/USD and NZD/USD) rise in early Asian session despite equity declines, NZ and AU government bond yields rise
- Bank of Korea (BOK) said it is discussing whether to hold an emergency meeting; South Korea 10-year yield rises over 15bps
- BoJ conducts another unscheduled JGB repo operation
- BoJ also offered to buy 5-10 yr JGBs in unscheduled operation
- RBA adds liquidity through daily repo operations
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -2.5% at 5,171
- (AU) Australia PM Morrison: Notes greater community transmission of coronavirus throughout Australia; parliament will resume as ‘normal’; advice to govt is not to ban travel from Europe
- (NZ) New Zealand Feb Manufacturing PMI: 53.2 v 49.8 prior (back into expansion)
- VAH.AU Suspends guidance due to coronavirus; cancels all non-essential CAPEX; To further reduce capacity
Japan
- Nikkei 225 opened -2.1%
- *(JP) BANK OF JAPAN (BOJ) TO BUY ¥500B IN JGB REPURCHASES FUTURE DELIVERY (3rd unscheduled JGB repo operation in March)
- 9984.JP To buyback up to ¥500B in stock (7% of shares)
- 0001.JP Plans to halt certain foreign-currency insurance sales – Japanese press
- (JP) Japan Olympics Min Hashimoto: IOC and 2020 organizers are not considering cancellation or postponement of the 2020 games
- (JP) Japan Chief Cabinet Sec Suga: confirms PM Abe and President Trump spoke on phone today at the request of the US; discussed coronavirus, Olympics and the economy
- (JP) Japan Fin Min Aso: Volatility is high in markets, see uncertainty increasing, decline in stocks does not change corporate fundamentals; will finish budget by the end of March
- (JP) Japan Top Currency Official Takeuchi: No comment on market intervention; confirms G7 held phone conference last night, need to limit spread of virus as much as possible; will closely cooperate with G7, watch markets closely and act as needed
- (JP) Japan Securities Clearing Corp (JSCC): Issues margin call for JGBs, TOPIX and Nikkei FUTs
Korea
- Kospi opened -6.1%
- (KR) BANK OF KOREA (BOK) DISCUSSING NEED TO HOLD EMERGENCY RATE REVIEW MEETING; will give further notice if decision is made
- (KR) Bank of Korea (BOK): Closely monitoring local bond yields spiking; Will use OMO to intervene into money markets if needed; Will take steps to stabilize financial markets
- USD/KRW South Korea currency authorities suspected to have intervened to support the Korean Won (KRW)
- (KR) South Korea FX Authorities: Reiterates will act to stem any ‘herd-like’ behaviors or excessive moves in FX market
- (KR) South Korea FSC Chairman: Reviewing steps to stabilize markets – Yonhap
- (KR) South Korea Feb Export Price Index M/M: 1.2% v -0.7% prior; Y/Y: -1.8% v -2.5% prior; Import Price Index M/M: -1.3% v -0.8% prior; Y/Y: -0.9% v +2.7% prior
- (KR) General O’Shaughnessy: North Korea’s recent engine testing suggests the regime may be ready to test a more advanced intercontinental ballistic missile that could pose a greater threat to the United States – Yonhap
China/Hong Kong
- Hang Seng opened -7.4%; Shanghai Composite opened -4.1%
- (CN) China National Development and Reform Commission (NDRC): China will take measures to boost consumption, will reduce import tariffs on consumer goods, to encourage regions that have car plate quota restrictions to increase quotas; to stabilize and increase property income
- (CN) China Vice Industry Min Xin Guobin: Coronavirus epidemic globally brings uncertainty to work resumption in China
- (CN) China Banking Regulator (CBIRC): Banking institutions have issued CNY1.4T in loans related to virus control and prevention; To encourage banks to help key supply chain companies suffering from liquidity crunch with credit lines
- (CN) China National Health Commission Coronavirus Update for March 12th: 8 additional cases v 15 prior; Additional deaths: 7 v 11 prior; Hubei: 5 additional cases v 8 prior; additional deaths: 6 v 10 prior
- (CN) ‘Coming’ RRR cuts may ‘swell’ liquidity and lower financing costs for small and medium-sized companies – China Daily
- (CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations for the 18th consecutive session, Net CNY0B v CNY0B prior
- (CN) China PBOC sets Yuan reference rate: 7.0033 v 6.6941 prior (weakest setting since Feb 28th)
- (CN) USTR: Grants additional tariff exclusions on medical products from China
- (CN) China auto makers said to be requesting Govt assistance after Feb sales fell 79% – press
- 486.HK Reports Q4 Adj Net -$138M v -$17M y/y, Rev $2.49B v $2.37B y/y
- (HK) Hong Kong said to consider stepping up its border control due to Europe and US outbreak – Local media
- (CN) China MoF sells 30-year Bond, avg yield 3.39%; bid to cover 1.46x
North America
- (US) New York Fed announces new $1.5T in Treasury reserve management purchases and repurchase operations to address “highly unusual disruptions” in Treasury financing markets associated with the coronavirus outbreak; to offer $500B in 3-mo repo today, and two $500B repos tomorrow; will continue $1T in repos each week for the rest of the monthly schedule; expands repo purchases beyond bills to a ‘range of maturities’
- (US) TTN March 12th Avg Traffic Intensity Index in Select US cities y/y: -39.8% v -34.6% prior (3rd consecutive decline)
- (US) US House Speaker Pelosi (D): Lawmakers and White House have ‘neared agreement’ on coronavirus legislative package, hopes to make an announcement on Friday (March 13th)
- (CA) Canada Fin Min Morneau: Reiterates Canada is in a strong fiscal position to respond, expect some market volatility; still planning on presenting budget on March 30th
- AAPL Says all 42 of its stores in China have reopened
- CBOE To Suspend Open Outcry Trading on Chicago Trading Floor as Precautionary Measure; trading on options exchange will continue to be available in an electronic-only trading mode until further notice
- (CA) Canada PM Trudeau wife has tested positive for coronavirus, he will remain in quarantine for 14-days, currently in good health, will not be tested as he has no symptoms
Europe
- (BE) Belgium PM Wilmers: To close all bars and restaurants due to coronavirus
- (IT) Italy Market Regulator: To introduce temporary short-selling ban on 85 stocks on Friday
- (EU) ECB ANNOUNCES EXPANSIONARY MEASURES; Increase bond buying from €20B to €120B/month until end of 2020
- (EU) ECB UPDATES STAFF PROJECTIONS: CUTS 2020 GDP FROM 1.1% TO 0.8%
- (BE) Belgium PM Wilmers: To close all bars and restaurants, sports events, schools due to coronavirus until April 3rd
- (EU) Eurogroup Chief Centeno: EU to make budget rules more flexible to deal with coronavirus impact – FT
Levels as of 1:20 ET
- Nikkei 225, -3.6%, ASX 200 +4.4%, Hang Seng -2%; Shanghai Composite -1.3%; Kospi -2.3%
- Equity Futures: S&P500 +3.2%; Nasdaq100 +3%, Dax 4.2%; FTSE100 -5.9%
- EUR 1.1209-1.1152 ; JPY 106.01-104.50 ; AUD 0.6326-0.6231 ;NZD 0.6160-0.6084
- Gold -1.7% at $1,563/oz; Crude Oil -0.6% at $31.31/brl; Copper -0.7% at $2.426/lb
