Asia Trades Lower After US Declines, Drop In Oil Prices

Feb 19 21, 05:55 GMT

General trend

Asian equities opened mostly lower; Markets are currently still lower, but off of session lows
Australia ASX 200 has lagged [lower commodity prices weighed on Energy and Resources indices]; Nikkei is closer to the opening level;
Oil producers are trading broadly lower; Declines in Consumer names [Kweichow Moutai] continued to weigh on Shanghai; Property indices outperform in Shanghai and HK; Hang Seng TECH index extends decline; Air Transportation index declines in Japan despite lower oil prices, Marine Transportation index rises
WTI crude oil declined over 3% in Asia, later pared some of loss; Power has been restored to additional people in Texas; Mexico plant interruptions persist (LG Electronics, Toyota Motor)
Earnings reactions: [Australia]: QBE Insurance, Lovisa, Inghams, Cochlear, Goodman Group rise; [US]: Walmart declined by over 6% during US session, AMAT rose 4% in afterhours
Companies expected to report during the NY morning include Deere and Co., Magna International, Moneygram
RBNZ is due to release its monetary policy statement on Feb 24th (Wed)

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened -0.2%
(AU) Australia Preliminary Jan Retail Sales M/M: +0.6% v 2.0%e
(AU) AUSTRALIA FEB PRELIMINARY PMI MANUFACTURING: 56.6 V 57.2 PRIOR
(AU) Australia sells A$600M v A$600M indicated in 0.25% Nov 2025 bonds, avg yield 0.4531%, bid to cover 8.1x
(NZ) New Zealand Q4 PPI Input Q/Q: 0.0% v +0.6% prior; PPI Output Q/Q: +0.4% v -0.3% prior
(NZ) New Zealand Jan Treasury Activity Index Y/Y: 0.8% v 1.5% prior
(NZ) New Zealand Dec New Residential Mortgage Lending NZ$9.65B, +48% y/y

China/Hong Kong

Hang Seng opened -0.4%, Shanghai Composite -0.4%
(CN) PBOC may keep OMOs at limited scale, May keep liquidity between ‘tight’ and ‘loose’ in near future; Economic policies may be adjusted if the global economy starts to recover. – China press
(CN) China PBOC Open Market Operation (OMO): Injects CNY20B in 7-day reverse repos v CNY20B in 7-day reverse repos prior; Net drain CNY80B v Net drain CNY260B prior
(CN) China PBOC sells CNY25.0B v CNY25.0B indicated in 3-month and 1-year bills in Hong Kong
(CN) China Ministry of Finance sells 3-month bills: Avg yield 1.9564% v 2.3753% prior
(CN) China PBOC sets Yuan reference rate: 6.4624 v 6.4536 prior
(CN) China considering lifting limits on children per couple in Northeast areas of the country – Press
(US) US House has revived bill aimed at banning imports from Xinjiang (China) – financial press

Japan

Nikkei 225 opened -0.9%
(JP) JAPAN JAN NATIONAL CPI Y/Y: -0.6% V -0.7%E, CPI EX-FRESH FOOD (CORE) Y/Y: -0.6% V -0.6E
(JP) JAPAN FEB PRELIMINARY PMI MANUFACTURING: 50.6 V 49.8 PRIOR (1st expansion in 21 months)
Toyota [7203.JP] Production at plant in Mexico has been affected by Natural Gas Shortages related to winter storm in Texas
(JP) Japan Chief Government Spokesman: There are 93 cases of the new mutant strain of COVID-19 confirmed in the country

Korea

Kospi opened +0.1%
LG Electronics [066570.KR]: Mexico plants partially halted due to natural gas shortages
(KR) South Korea sells KRW103B in 10-year inflation linked bonds: Avg yield: 0.57%
(KR) South Korea Jan PPI Y/Y: 0.8% v 0.2% prior
(KR) Japan, US, and South Korea held meeting on North Korea – Press

North America

(US) Electric Reliability Council of Texas (ERCOT): ~36,000 Mw of generation remains on forced outage; said most of the remaining outages are weather-related as opposed to forced blackouts
(US) Texas oil patch reportedly begins to resume operations following cold winter weather – press
(US) Four Texas refineries said to be potentially weeks from recovering from storms – press
(US) President Biden to take part in virtual G7 Friday (Feb 19th)
(US) White House Press Sec Psaki: Pres Biden will use G7 meeting tomorrow to discuss COVID and global economy with world leaders
(US) Pres Biden to issue order to review key US supply chains related to semis, high-capacity batteries, and rare earth metals, but order does not mention China – CNBC
(US) Treasury Sec Yellen: hopes to see progress on stimulus bill in next two weeks; benefits of stimulus will far outweigh the costs; For the moment we have kept the tariffs in place that were put in by the Trump administration, we’ll evaluate going forward what we think is appropriate – CNBC interview
(US) INITIAL JOBLESS CLAIMS: 861K V 770KE; CONTINUING CLAIMS: 4.49M V 4.43ME

Europe

(EU) ECB chief Lagarde: 2021 will be a year of recovery; vaccines are priority number one – CNN interview
Audi Puebla plant has restarted production on the 3rd shift today (Feb 18th)
(DE) Germany Finance Ministry Monthly Report: Sees inflation close to January’s 1.0% in coming months; Jan Tax Rev -11.1% y/y, cites the pandemic

Levels as of 00:20 ET

Nikkei 225, -0.9%, ASX 200 -1.3% , Hang Seng -0.8%; Shanghai Composite +0.1% ; Kospi -0.1%
Equity S&P500 Futures: -0.2%; Nasdaq100 -0.3%, Dax -0.1%; FTSE100 -0.1%
EUR 1.2098-1.2082 ; JPY 105.74-105.55 ; AUD 0.7777-0.7756 ;NZD 0.7227-0.7203
Gold -0.4% at $1,767/oz; Crude Oil -1.6% at $59.64/brl; Copper +0.3% at $3.9188/lb