Asia Trades Generally Lower After Directionless Session On Wall St, Treasury Yields Quiet During Asia

General Trend

• Asian indices generally opened flat or lower, modest moves have been seen ahead of the upcoming Fed decision; Currently, indices are mostly in the red.
• Shanghai Composite ended the morning session near the opening [Financial and Property indices declined; IT and Consumer indices rose; O-film traded limit down on customer loss]
• Hang Seng has moved off of the worst levels [TECH index rebounded from early loss; ZTE rose over 9% after issuing Q1 guidance; Aluminum firm Rusal declined after issuing results; Sunny Optical might report earnings later today]
• Australia ASX 200 ended closer to the lows [Energy, Resources, Consumer Staples and Financial indices are among the decliners; KYCkr rose on agreement with BAE Systems]
• Nikkei 225 has outperformed, trades near the opening level [USD/JPY has risen; Pharma, Real Estate and Bank indices rose; Decliners included Iron & Steel and Transportation indices; TEPCO declined on plant safety concerns; Supply chain issues continue to impact automakers (Honda, Toyota)]
• BOJ policy meeting is due to be held on March 18-19th (Thurs-Fri) [results of framework assessment in focus]
• Australia Feb Labor Market data due on Thursday (March 18th)
• RBA Assistant Gov (Financial Markets) Kent is expected to speak about the end of LIBOR on Thursday (March 18th)
• Companies expected to report during the NY morning include Cintas, Lands’ End, Pinduoduo

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened -0.2%
• FCG.NZ Reports H1 (NZ$) Net 418M v 293M y/y, EBIT 684M v 584M y/y; Rev 9.9B v 10.4B y/y; Affirms FY guidance
• (NZ) New Zealand Q4 Current Account (NZ$): -2.7B v -2.7Be (19-year low)
• (AU) Australia Feb Westpac Leading Index M/M: 0.0% v -0.1% prior
• (AU) Reserve Bank of Australia (RBA) Assist Gov Kent: Expects increase in business failures as support is phased out; Board to consider additional bond buying later in 2021
• (AU) Australia sells A$1.0B v A$1.0B indicated in 1.50% June 2031 bonds, avg yield 1.7161% v 1.8378% prior, bid to cover 2.82 x v 3.38x prior

Japan

• Nikkei 225 opened -0.3%
• (JP) Former Bank of Japan (BOJ) board member Kiuchi said if the central bank wants to ‘surprise markets’ it could change its yield target (YCC) to 5-year JGBs from 10-year JGBs currently – US financial press
• (JP) Bank of Japan (BOJ) announcement related to daily bond buying operation: Unchanged
• (JP) Japan said to be lifting coronavirus restrictions on Tokyo Area on Mar 21st – Japan Press
• Honda [7267.JP]: Said to suspend some production at all US and Canada plants citing supply chain issues, excludes Mexico – Press
• Toyota Motor [7203.JP]: To reduce output in US and Mexico due to product shortages
• Line Corp: Said that Line Messaging app allowed China engineers to access user data without user consent – Press
• (US) Japan Finance Ministry: Confirms to impose safeguard tariffs on US Beef for 30 days, tariff raised to 38.5% from 25.8% for a month starting March 18th
• (JP) Japan Feb Trade Balance: ¥217.4B v ¥420Be; Adj Trade Balance: -¥38.7B v -¥119.0Be
• (JP) Bank of Japan (BOJ) Japan End Dec 2020: Household assets ¥1,948T (+2.9% y/y); BOJ JGB holdings 44.71% – Quarterly Flow of Funds Report
• (JP) Japan PM Suga: Agrees to hold Tokyo Olympics without foreign spectators [in line] – Press

Korea

• Kospi opened 0.0%
• 005930.KR Chip demand to increase as 5G, AI and IOT markets grow; To supply foundry chips in time via increase in capacity; Working to solve parts supply issue, Q2 may be difficult

AGM

• (KR) Bank of Korea (BOK) said to reduce March Monetization Bond issuance (MSB) – financial press
• (KR) South Korea Feb Unemployment Rate: 4.0% v 5.0%e (falls from 20-year high)
• (KR) South Korea Fin Min Hong: Govt job creation program seems to have helped in decreasing unemployment rate

China/Hong Kong

• Hang Seng opened -0.1%; Shanghai Composite opened -0.3%
• (CN) Senior US Official speaking on China: Will not issue joint statement after [March 18-19th] meeting; China meeting is a ‘one-off’, not resumption of dialogue
• (US) Sec of State Blinken: China has been acting more aggressively and repressively in East Asia and South China Sea; Foreign Financial institutions that knowingly conduct significant transactions with those listed in latest US Report are subject to sanctions; Latest update identifies 24 PRC and HK Officials whose actions have reduced HK High degree of autonomy
• (CN) China banking regulator has asked > 4,500 banks in Guangdong (ex Shenzhen) to conduct self-inspections related to operating and consumer loans; regulator found that certain loans were inappropriately used in the housing market – financial press
• (HK) Hong Kong extends social distancing measures for additional 2 weeks to March 31st , continue in active discussions on how to improve infection control
• (CN) Former PBoC Official Sheng Songcheng: China will risk “huge economic losses” if it tries to curb asset bubbles through monetary policy tightening
• (CN) China PBOC Open Market Operation (OMO): Injects CNY10B in 7-day reverse repos v CNY10B in 7-day reverse repos prior; Net CNY0B v CNY0B prior
• (CN) China Ministry of Finance (MOF) sells 1-year and 10-year bonds
• (CN) China PBOC sets Yuan reference rate: 6.4978 v 6.5029 prior
• 9988.HK Denies press report it was forced to sell its media assets and there are no plans to sell them – Chinese press
• 763.HK Reports final FY20 (CNY) Net 4.26B v 4.37B prelim, Rev 101.5B v 101.4B prelim; Guides Q1 Net +130.8-207.7% y/y
• 002456.CN Disclosed that an overseas client will stop buying from the co.; assessing the impact on operations and earnings
• (CN) Piglet prices soaring in China, cites the impact of new disease strain on supply expectations – FT
• (CN) At least 1 China state bank was said to have been seen using FX swaps to absorb US dollars – financial press

Other

• (SG) SINGAPORE FEB NON-OIL DOMESTIC EXPORTS M/M: +8.2% V -0.7%E; Y/Y: +4.2% V 6.1%E

North America

• (CN) Senior US Official speaking on China: Will not issue joint statement after [March 18-19th] meeting; China meeting is a ‘one-off’, not resumption of dialogue
• (US) Weekly API Crude Oil Inventories: -1M v +12.8M prior
• (US) S&P affirms United States sovereign rating at AA+; outlook Stable

Europe

• UBER Reportedly plans to give ~80K UK drivers ‘worker’ status following a court ruling; drivers to receive vacation pay, pension payments, and guaranteed minimum wage
• Swatch [UHR.CH]: CEO Hayek: Taking on CHF10-12B in debt to go private is a ‘no go’ – local press
• (RU) US government is expected to impose sanctions on Russia by as early as next week , the sanctions would relate to alleged meddling in the 2020 US election – financial press
• (FR) France PM Castex: criteria have been met for a potential lockdown in Paris region; decision has not been made yet

Levels as of 01:20 ET

• Nikkei 225, -0.2%, ASX 200 -0.5% , Hang Seng -0.5%; Shanghai Composite -0.5% ; Kospi -1%.
• Equity S&P500 Futures: -0.1%; Nasdaq100 -0.3%, Dax -0.2%.
• EUR 1.1906-1.1892 ; JPY 109.16-108.98 ; AUD 0.7749-0.7723 ;NZD 0.7196-0.7176.
• Gold +0.3% at $1,735/oz; Crude Oil +0.2% at $64.94/brl; Copper +0.2% at $4.0693/lb.