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Market Update – Asian Session: Asian Equity Markets Open Broadly Higher After Mixed US Session

Headlines/Economic Data

General Trend:

Japan Jan Core CPI holds steady, while headline inflation hits highest level since March 2015 (highest since July 2014 excluding impact of sales tax hike)

China takes temporary control of Anbang Insurance

China said to speak with banks about support for conglomerate HNA Group

Kiwi (NZD) under performs

South Korea confirms to resume sales of 50-year bonds

Australia/New Zealand

ASX 200 opened +0.4%; closed +0.8%

ASX 200 Resources Index +1.6%, REIT +1.2%, Financials +0.6%

(AU) Australia sells A$400M v A$400M in May 2021 bonds, avg yield 2.1289% , bid to cover 6.12x

(NZ) New Zealand Q4 Retail Sales (Ex Inflation) Q/Q: 1.7% v 1.4%e

(AU) Fitch affirms Australia 4 major banks (Commonwealth Bank, ANZ, NAB, Westpac)

(AU) Australia Deputy PM Joyce resigns as leader of National Party, remains in parliament

China/Hong Kong

Shanghai Composite opened +0.2%, Hang Seng opened +1%

Hang Seng Property/Construction Index +1.3%, Energy+1.1%, Materials +1%, Services +1%, Info Tech +0.9%, Financials +0.9%

Shanghai Property index rises over 2% then pares gain

Aluminum producer Rusal [486.HK] declines over 1% as Q4 adj EBITDA missed estimates

(CN) China regulators take over Anbang Insurance for 1-year from Feb 23rd; company to’remain private’ – US financial press

(CN) China to notify banks about supporting HNA Group – US financial press

(CN) China revises Jan Trade Surplus higher to $20.35B v $20.34B prelim; US dollar (USD) denominated imports revised to +36.8%v +36.9% prelim – Customs

(CN) PBOC SETS YUAN REFERENCE RATE AT 6.3482 V 6.3530 PRIOR

(CN) China PBoC OMO: Injects CNY230B v CNY350B injected in 7-day, 28-day and 63-day reverse repos prior

Japan

Nikkei 225 opened +0.3%: closed +0.7%

TOPIX Iron & Steel Index +1.8%, Real Estate+1.5%, Securities +1.5%

JAPAN JAN NATIONAL CPI Y/Y: 1.4% V 1.3%E(Highest since March 2015*); CPI EX-FRESH FOOD (CORE) Y/Y: 0.9% V 0.8%E[*Note: According to Japan government data, the overall Jan CPI rose at the fastest pace since July 2014 (ex impact of sales tax hike)]

Japan Finance Min Aso: Want to raise nationwide sales tax as scheduled in Oct 2019; Reiterates important for BoJ to maintain current policy framework

Korea

Kospi opened +0.5%

Samsung Electronics [005930.KR]: To spend $6.0B by 2020 to expand Hwaseong chip plant, could expand investment after the production line begins operations

South Korea Vice Finance Min: To resume sale of 50-year Treasury bonds in mid-March; the specific date and amount has not been set as of yet

South Korea Q4 Short-term External Debt:$115.9B v $118.9B prior

US said to announce new sanctions on North Korea on Friday – financial press

Other Asia

(SG) Singapore Jan CPI M/M: -0.2% v +0.2%e; Y/Y: 0.0% v 0.4%e; CPI Core Y/Y: 1.4% v 1.5%e

NorthAmerica

US equity markets ended mixed: Dow +0.7%,S&P500 +0.1%, Nasdaq -0.1%, Russell 2000 -0.1%

S&P500 Energy +1.1%, Real Estate +1.1%; Financials -0.8%

(US) Fed’s Bullard (dove, non-voter): Not behind view for 4 rate hikes in 2018 "unless everything goes perfect"; idea that rates have to rise 100bp in 2018 "seems like a lot to me."– CNBC

(US) Fed’s Kaplan (non-voter, dove): Still believes three 2018 hikes is a good base case

(US) Fed’s Bostic (2018 voter, dove): Fed is carefully calibrating a return to more normal policy – comments in Atlanta

(US) Fed’s Dudley (dove, FOMC voter): Does not comment on monetary policy in prepared remarks

(US) NY Fed Jan primary dealer survey: median dealer saw 3 hikes in 2018 before Jan FOMC meeting

(US) TREASURY $28B 7-YEAR NOTE AUCTION RESULTS:DRAWS 2.839% (highest yield since March 2011); BID-TO-COVER: 2.49 V 2.73 PRIOR AND 2.54 AVG OVER LAST 12 AUCTIONS (lowest BTC since Nov 2017)

(US) US Treasury Sec Mnuchin: President Trump’s policies will raise wages without inflation

(US) US Defense Secretary Mattis: Supports Commerce Dept’s actions on steel and aluminum; targeted tariffs are preferable to global quota or global tariff

(US) DOE CRUDE: -1.6M V +2ME

Europe

(EU) ECB’s Smets (Belgium):has full confidence ECB will reach inflation goal; Euro strength and volatility is not yet a concern

Levels as of 01:00ET

Hang Seng +0.9%; Shanghai Composite +0.1%; Kospi +1.2%

Equity Futures:S&P500 +0.3%; Nasdaq100 +0.2%, Dax +0.2%; FTSE100 +0.3%

EUR 1.2295-1.2338 ; JPY 106.65-107.05; AUD 0.7816-0.7849 ;NZD 0.7289-0.7346

Feb Gold -0.3% at $1,329/oz;Feb Crude Oil -0.1% at $62.70/brl; Mar Copper -0.6% at $3.217/lb

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