Asian Indices Opened Mixed After US Gains On Tues

General Trend:

• Boeing declines over 9% in US afterhours trading, co. said it supports a minimum of $60.0B in access to public and private liquidity (including loan guarantees for the aerospace manufacturing industry)
• Shanghai Composite rises in early trading, gainers include IT and Consumer Discretionary firms
• HSBC rises over 2.5% in HK amid the naming of a new CEO
• Tencent due to report Q4 results after the market close in Hong Kong
• Japanese equities pare opening gains as US equity FUTs decline; Sectors moving higher include Marine Transportation, Insurance and Electric Appliances
• Softbank declines by over 8%, Wework’s legal issues could enable Softbank to cancel plan to buy $3.0B in stock from existing Wework shareholders
• Declining sectors in Australia include Consumer Discretionary, Energy and Financials
• Qantas declines by over 12% in Australia as the gov’t revised its international travel ban
• Australia PM upgraded the country’s international travel ban and told citizens not to travel abroad, said gov’t is considering further economic measures
• Australia Feb leading index has largest drop since 2011 amid recession concerns
• Australia Feb preliminary retail sales rose m/m; the data was supported by food retailing
• RBA is expected to announce further policy measures on Thursday (March 19th), the central bank said earlier this week that it stands ready to buy domestic gov’t bonds
• Australia Feb jobs market data also due on Thursday
• Japan Fin Min said not currently considering cash handouts as part of stimulus measures
• South Korea raised the ceiling related to the FX forward positions of banks, said the move aims to help banks secure more US dollars
• US Fed announced various additional measures on Tuesday, including primary dealer credit facility and commercial paper funding facility; NY Fed also said it would offer $1.0T in overnight repos every day this week
• New Zealand due to release Q4 GDP figures on Thursday

Headlines/Economic

Data Australia/New Zealand

• ASX 200 opened -0.3%
• (AU) Reserve Bank of Australia (RBA) adds A$10.7B to banking system through repos v A$8.8B prior
• (AU) Australia Feb prelim Retail Sales M/M: +0.4% v -0.3% prior
• (AU) Australia Feb Westpac Leading Index m/m: -0.4% v 0.0% prior
• (AU) Australia confirms A$715M relief package for airlines
• (AU) Australia PM Morrison: Reserve Bank of Australia (RBA) considering measures over the next 2-days
• (AU) Australia PM Morrison: Coronavirus disruption unlikely to be less than 6 months, has declared ‘human biosecurity emergency’, upgrades travel ban to ‘level 4’ across the world and tells all citizens not to travel abroad
• VAH.AU Suspending all international flights through June 14th (grounds 53 planes); cuts domestic capacity again by 50%; will impact employees, currently in talks with unions
• (NZ) Reserve Bank of New Zealand (RBNZ): Plans to slowdown or delay regulatory initiatives for at least 6 months
• (NZ) Reserve Bank of New Zealand (RBNZ) Gov Orr: We would rather do too much than too little for economy, coronavirus to cause at least a year of economic disruption; NZ$ is on the good side of stimilatory – financial press
• FCG.NZ Reports H1 (NZ$) NPAT 293M v 68M y/y, EBIT 584M v 312M y/y, Rev 10.4B v 9.8B y/y
• (AU) Australia sells A$500M v A$500M indicated in 1.25% May 2032 bonds, avg yield 1.2852%, bid to cover 3.60x

Japan

• Nikkei 225 opened +0.8%
• (JP) Bank of Japan (BOJ) Gov Kuroda: At Nikkei’s avg levels BOJ paper loss from ETF holdings is currently at ¥2-3T ; Market volatility is small than that of US and EU; ETF purchases are having some effect in taming volatility in Japan’s markets – speaking in parliament
• (JP) JAPAN FEB TRADE BALANCE: ¥1.11T V ¥0.9TE; ADJ TRADE BALANCE: ¥498.3B V ¥535.5BE; Exports Y/Y: -1.0% v -4.2%e (15th consecutive decline); Imports Y/Y: -14.0% v -14.0%e
• (JP) Japan said to consider handouts of at least ¥12K/per person as part of stimulus measures – Japan Media
• (JP) Japan Finance Min Aso: Not considering economic step of cash handouts at Finance Ministry at the current time
• 4901.JP (JP) Japan Chief Cabinet Sec Suga: Clinical studies started on Avigan’s coronavirus efficacy
• (JP) Japan Econ Min Nishimura: Considering tax, fiscal and regulatory measures for stimulus
• 9984.JP Reportedly backs away from part of planned bailout of WeWork – press
• (JP) Japan to start daily meeting with Fin Min Aso, PM Abe; BOJ Gov Kuroda and Econ Min Nishimura; effective March 19th; to discuss measures to help economy amid coronavirus – Nikkei
• (US) Treasury Sec Mnuchin: Japan Fin Min Aso reaffirmed commitment to use all appropriate policy tools to achieve strong growth
• 4901.JP China said to approve first vaccine for clinical trial against Coronavirus, Favipiravir

Korea

• Kospi opened +0.8%
• (KR) South Korea parliament approves the KRW11.7T extra budget; the overall size of the budget was unchanged from the original government proposal but details have been adjusted (overnight)
• (KR) South Korea: Announces new FX forward measures, effective March 19th; To take steps swiftly for FX swap markets if needed
• (KR) South Korea: FX liquidity coverage ratio revision is possible
• (KR) South Korea President Moon: All industries facing crisis from coronavirus; needs to be pre-emptive and bold steps for economy and markets
• 005930.KR 5G smartphone demand will grow this year despite coronavirus
• (KR) South Korea reports 93 additional coronvairus cases in the last 24-hours; Total, 8,413; death toll 84
• (KR) South Korea Democratic Party (DP), ruling party, calls on Govt to consider drawing up another extra budget and come up with bold market-stabilizing and economic measures to fight coronavirus – Yonhap
• (KR) South Korea sells 2-year Monetary Stabilization Bonds (MSB); avg yield 0.980% v 1.250% prior

China/Hong Kong

• Hang Seng opened -1.0%; Shanghai Composite opened +0.5%
• (CN) China Banking and Insurance Regulatory Commission (CBIRC) chief risk officer Xiao Yuanqi: Non-performing loans in China have increased due to impacts from coronavirus but the risks are under control; expect the impact to be short-lived and cash flows companies will normalize as business activities resume – Xinhua
• (CN) China National Health Commission Coronavirus Update for March 17th: 13 additional cases v 21 prior; Additional deaths: 11 v 13 prior; Hubei: 1 additional cases v 1 prior; additional deaths: 11 v 12 prior
• (CN) China PBOC sets Yuan reference rate: 7.0328 v 7.0094 prior
• (CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations for the 21st consecutive session, Net CNY0B v CNY0B prior
• (CN) S&P cuts China 2020 GDP outlook to 2.9% (prior 4.8%)
• 000002.CN Reports FY19 (CNY) Net 38.9B v 33.8B y/y, Rev 367.9B v 297.7B y/y
• (CN) China Commerce Min (MOFCOM): China confident about reaching foreign trade goals (after the close)
• (CN) China Ministry of Finance (MOF): to raise tax rebates for some exports
• (CN) China govt reiterates stance to give top priority to stabilize employment – financial press

North America

• (US) NEW YORK FED TO OFFER $1T IN OVERNIGHT REPOS EVERY DAY THIS WEEK
• (US) Fed establishes primary dealer credit facility to support market function; rate on primary credit facility to match discount rate
• (US) Treasury Sec Mnuchin: Proposal would inject $1T into economy on top of $300B in deferred tax payments; this is not the time to worry about the deficit; said to have warned that the coronavirus could lead to a 20% unemployment rate without any action by the government
• FDX Exec: total China air cargo dropped about 40%;China flights have been full in the last couple of weeks; have a doomsday scenario where we would slash capex – earnings call comments
• (US) Fed’s Bostic (dove, non-voter in 2020): committed to providing as much support to markets as we can
• (US) Fed’s George (hawk, non-voter in 2020): we stand ready to lend through the discount window and to address any regulatory or supervisory concerns
• (CA) Canada stimulus package said to total >C$25.0B – Local Media
• TSLA California County: The company is not an essential business, can maintain minimum basic operations
• UAL Cuts capacity by 82% for international flights and 42% in the US for April
• (US) Trump Administration said to consider plan to close US borders to asylum seekers – US financial press
• (US) Weekly API Crude Oil Inventories: -0.4M v +6.4M prior
• (US) TTN March 17th Avg Traffic Intensity Index in Select US cities y/y: 14.8% v 19.6% prior (5th consecutive decline)
• (U)S US President Trump to speak with the CEOs of airlines on Wed (March 18th) about coronavirus – US financial press
• (US) Democratic Primary Results: Biden wins Florida, Illinois and Arizona

Europe

• (UK) Reportedly BOE held call with top asset managers, some of whom argued that financial markets should be closed, but most did not support market closure – press
• (UK) Fin Min Sunak: £330B guaranteed loans to be made available to businesses, agreed new lending facility with BoE to provide low cost, easily accessible commercial paper

Levels as of 12:15ET

• Hang Seng -0.6%; Shanghai Composite +0.7%; Kospi -0.2%; Nikkei225 +1.0%; ASX 200 -4.6%
• Equity Futures: S&P500 -3.4%; Nasdaq100 -3.6%, Dax -1.9%; FTSE100 -2.7%
• EUR 1.1033-1.0985; JPY 107.72-107.10; AUD 0.6027-0.5982; NZD 0.5965-0.5935
• Commodity Futures: Gold +0.2% at $1,528/oz; Crude Oil +0.2% at $27.40/brl; Copper +1.0% at $2.33/lb