General Trend
- Following the lower openings, Asian markets have pared declines; Most markets are currently off of the lows; Resources cos. have generally lagged after the recent decline in metals prices; Financials have generally outperformed amid the higher 10-year gov’t bond yields; Energy cos. have been supported by higher oil prices
- Shanghai and HK equities pared decline during the morning session amid NPC comments [Shanghai Consumer stocks rebounded after prior decline; Shanghai IT index reversed decline; HK TECH index pared over 3.5% decline; Shanghai Property index lagged amid property tax talk]
- Commodity currencies remained weaker in Asia
- BoJ Gov commented on the central bank’s stock price and implicit band for 10-yr JGB yield target
- China Jan-Feb trade data is expected to be released on March 6-7th (US time)
- Companies expected to report during the NY morning include Big Lots, Hibbett Sporting Goods
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -0.3%
- (AU) Australia sells A$1.0B v A$1.0B indicated in 1.50% June 2031 bonds, avg yield 1.8378%, bid to cover 3.38x
- (AU) Australia Feb AIG Services Index: 55.8 v 54.3 prior
- (NZ) Reserve Bank of New Zealand (RBNZ) offers to buy a total of NZ$630M in government bonds next week under QE program v NZ$570M prior
- (NZ) Another earthquake, magnitude 8.0, hits near Kermadec Islands
- (NZ) New Zealand has downgraded Tsunami threat level
- (NZ) NEW ZEALAND Q4 VOLUME OF ALL BUILDINGS Q/Q: -1.5% V 3.0%E
- (NZ) New Zealand PM Ardern: Auckland Lockdown will end Sunday (Mar 7th) at 06:00 local time and go to coronavirus alert level 2; Remainder of New Zealand will move to level 1
China/Hong Kong
- Shanghai Composite opened -1.2%, Hang Seng -2.0%
- (CN) China 14th National People’s Congress (NPC) Premier Li: Setting 2021 GDP Target >6%; CPI Target ~3.0%; Sees Budget deficit ~3.2% of GDP; To set annual economic growth targets based on conditions; Planning CNY3.65T in special local Govt bond sales; pushing for legislation of property tax; will raise tax reduction to 100% for manufacturing enterprises; Reiterates will not make any sharp turns in macro policy; Macro policies to make timely adjustments; Reiterates will keep FX Basically stable; Targeting 1.8% increase in fiscal spending; will continue to push real lending rates lower
- (CN) China State Planner NDRC Chairman He: Expects YTD (Jan-Feb) exports +50% (Jan-Feb): China capable of achieving >6.0% GDP Growth target
- (CN) China State Council Research Office Official: China GDP Growth in Q1 to potentially ‘surge’ due to low base in 2020 – Press (in line)
- Foxconn Industrial [601138.CN]: Said to be adding additional plant in Henan – Press
- (US) Commerce Sec Raimondo: Pres Biden to use the entity list to full effect on China; China must be held to account for rights abuses
- (HK) Hong Kong Legislature elections said likely to be delayed until Sept 2022 – SCMP
- (CN) China PBOC Open Market Operation (OMO): Injects CNY10B in 7-day reverse repos v CNY10B in 7-day reverse repos prior; Net drain CNY10B v Net drain CNY10B prior
- (CN) China PBOC sets Yuan reference rate: 6.4904 v 6.4758 prior
Japan
- Nikkei -0.7%
- (JP) Bank of Japan (BOJ) Gov Kuroda: BOJ Will likely debate whether to expand implicit band for 10-year JGB targets, more discussion needed before final decision; Reiterates does not think it is necessary nor appropriate to widen band along BoJ’s long-term rate target; BOJ not responsible for moves in share price levels
- (JP) Japan Fin Min Aso: Japan Cabinet has reached agreement for banking law reforms; declines comment on stock prices and FX [when asked about yen declines]
- (JP) Japan govt recommends extension of Tokyo state of emergency by 2-weeks (as expected)
- (JP) Japan PM Suga: Difficult to resume Go To Travel during this fiscal year
Korea
- Kospi opened -0.2%
- (KR) South Korea Vice Fin Min Kim: Chance of drastic increase in inflation acceleration limited; Still cannot ignore the concerns on inflation
Other Asia
- (PH) Philippines Feb CPI Y/Y: 4.7% v 4.7%e (2nd consecutive month above target range)
- (PH) Philippines Central Bank (BSP) Gov Diokno: To consider recent inflation data at March 25th rate meeting, reiterates no need for monetary response unless 2nd round inflation effects are evident
- (SG) Singapore Jan Retail Sales M/M: -1.8% v -1.1%e; Y/Y: -6.1% v -2.5%e
North America
- (US) Fed Chair Powell: To consider raising interest rates, Fed would need to see maximum employment, inflation at 2% and headed above that; Fed will not raise rates until these conditions are fulfilled; Would be concerned by disorderly market conditions; would be concerned by tighter financial conditions
- (US) Congressional Budget Office (CBO): Finds Stimulus bill is within budget limit; Finding will allow stimulus to pass with 51 votes in senate
Europe
- OPEC+ confirms Saudi to extend 1M bpd cut into April; Russia allowed to increase 130K bpd, Kazakhstan allowed 20K bpd hike
Levels as of 00:20 ET
- Nikkei 225, -1%, ASX 200 -0.7% , Hang Seng -0.9%; Shanghai Composite -0.6% ; Kospi -0.9%.
- Equity S&P500 Futures: -0.3%; Nasdaq100 -0.4%, Dax flat; FTSE100 -0.9%.
- EUR 1.1978-1.1951 ; JPY 108.09-107.82 ; AUD 0.7732-0.7686 ;NZD 0.7198-0.7155.
- Gold -0.7% at $1,689/oz; Crude Oil +0.8% at $64.32/brl; Copper +1.6% at $4.0035/lb.
