Equities Track Lower Following US Markets Overnight

Mar 28 18, 07:28 GMT

General Trend:

Asian equity markets track Tuesday’s declines in the US
Air China and BYD trade sharply lower amid earnings releases
Samsung, Softbank and Tencent track underperformance in US tech sector
Trump Administration said to consider legal action to limit Chinese takeovers in move to protect tech sector
Korea Won (KRW) gains over 0.6%; China confirms recent visit by North Korean Leader, details released related to US/South Korea currency agreement
Asian 10-year bond yields generally track declines in US Treasury yields
HK banks said to consider ending fixed-rate mortgage offerings
At the short end, money market rates continue to move higher in Hong Kong and Australia
Shanghai yuan denominated oil futures trade lower by close to daily limit in third day of trading

Japan

Nikkei 225 opened -2.0%; closed -1.3%
Topix Securities Index -2.5%, Real Estate -2.4%, Electric Appliances -2.1%, Information & Communications -2.1%
Japanese mega banks trade lower by over 1.5% (tracks declines in US financials)
Softbank [9984.JP] declines over 4%, tracking global tech sell-off
Honda [-0.3%], 7267.JP Planning to reduce Accord production by 11 days through July – US financial press
Subaru [-3.4%], 7270.JP There are concerns that the company may have ‘systemically’ falsified data related to fuel – Japanese Press
Panasonic [6752.JP] declines over 5%; Weakness comes amid regulatory probe into Tesla car crash in California
(JP) Japan PM Abe affirms to try and get TPP 11 approved in current session – parliament
(JP) Japan Fin Min Aso: Very important to support free trade; volatility is very high in stock market – Parliament
(JP) Land prices outside major cities in Japan are seeing their first increase in 26-years – Nikkei
(JP) Former BoJ Dep Gov said additional delay to CPI target is possible – Japanese Press
(JP) Japan PM Abe: Not considering calling for a general election; Govt plans to raise sales tax as planned
(JP) Bank of Japan (BOJ) Gov Kuroda: Reiterates to continue with powerful easing, have taken appropriate policy at the right time; no comment if sales tax should be raised, up to the Govt and Diet

Korea

Kospi opened -1.1%
Kakao [-2.3%], 035720.KR To introduce its own blockchain platform by the end of this year, will not offer cryptocurrency with it – Korean press
(KR) North Korean leader Kim Jong-un reportedly did have meeting with China President Xi Jinping in Beijing – Nikkei
(KR) SOUTH KOREA Q4 FINAL GDP Q/Q: -0.2% V -0.2%E; Y/Y: 2.8% V 3.0%E
(KR) Bank of Korea (BOK) Ofifical: 2018 Gross national income per capita to exceed $30,000
(KR) South Korea steel exports to US to fall 30% under new trade deal; will still be subject to 10% tariff on aluminum
Hyundai Mobis [+6%], 012330.KR To become a holding company after split off – Korean press

China/Hong Kong

Hang Seng opened -0.9%, Shanghai Composite -1.1%
Hang Seng Info Tech index -3%, Services -2.2%, Consumer Goods -2.1%, Industrials -2%, Materials -1.8%, Energy -1.7%, Financials -1.3%, Property/Construction -1.2%, Telecom -1.2%
(CN) China economic growth remained ‘strong’ in Q1, outlook less certain – Beige Book
HSBC, 0005.HK Said to withdraw fixed-rate mortgage plan in Hong Kong – HK Press
(CN) China govt expected to announce package of policies aimed at boosting demand – China Daily
(CN) China said to draft guidelines to increase imports – China Economic Daily
(CN) China President Xi met with North Korea’s Kim Jong Un. visiting China March 25-28th – Xinhua
(CN) China Premier Li met with US Congress delegation led by Senator Steve Daines – Xinhua
(CN) China President Xi top economic adviser Liu He said prevention of financial risks is a top priority- financial press
(CN) PBoC Open Market Operation (OMO): Skips OMO v skips prior; Net drains CNY10B v CNY10B prior (4th consecutive skip)
(CN) China Jan-Feb State Owned Enterprise (SOE) Net profit CNY367.3B, +25.3% /yy; Rev CNY8.3T, +11.2% y/y
(CN) China PBoC sets yuan reference rate at 6.2785 v 6.2816 prior (2nd consecutive stronger fix)
(CN) China PBOC Official Gao Fei: To accelerate pace for bond market opening up

Australia/New Zealand

ASX 200 opened -0.4%; closed -0.7%
ASX 200 Resources index -1.2%, Consumer Discretionary -1.2%, Telecom -1%,Energy -0.9%, Financials -0.8%; Utilities +1.4%
Watpac, WTP.AU Guides FY18 (A$) underlying net loss 5-3M; starts comprehensive review of mining business including exploring sale
(NZ) New Zealand Mar Business Confidence: -20.0 v -19.0 prior; Activity Outlook: 21.8 v 20.4 prior
(AU) Australia sells A$500M v A$500M indicated in 3.25% April 2029 Bonds, Avg yield: 2.6337% v 2.8212% prior , bid to cover: 3.47x v 4.36x prior
Other Asia
(IN) India Govt launches INR2.1T bank recapitalization scheme to help state-run banks write off nonperforming loans and support economic growth – press
(TH) Thailand Fin Min Apisak: Key interest rate should not be raised for 1 year; Central bank makes final decision on interest rate; Growth and inflation add to case to leave rate alone

North America

US equity markets ended broadly lower: Dow -1.4%, S&P500 -1.7%, Nasdaq -2.9%, Russell 2000 -2%
S&P500 Technology -3.2%, Consumer Discretionary -1.9%, Financials -1.9%
Tesla [TSLA] said it had no idea what caused vehicle crash on Friday; have not been able to get logs due to damage; severity of crash due to removal of attenuator
(CN) US govt reportedly considering using emergency law to restrict China takeovers as part of effort to protect US tech sector; Considering using the 1977 International Emergency Economic Powers Act, under which the President could declare a ‘national emergency’ that gives him powers to regulate commerce, block transactions, and seize assets – press
(US) Weekly API Oil Inventories: Crude: +5.3M v -2.7M prior
Looking Ahead: The third reading of US Q4 GDP to be released, along with the weekly DoE Crude Oil Inventories

Europe

(UK) Said to be offering a hard border resolution imminently – UK press
(EU) Reportedly Brussels considering taking €56B from ECB profits to plug budget hole after Brexit; Also said to consider a plastics tax to fill the budget gap – FT
(DE) Germany Chancellor Merkel: advocates for a rules-based trade dialogue between US and Europe
(SA) Saudi Energy Min Al-Falih: the OPEC/non-OPEC oil agreement is not a year-by-year project – press

Levels as of 02:00ET

Hang Seng -1.8%; Shanghai Composite -1.3%; Kospi -1.6%
Equity Futures: S&P500 -0.4%; Nasdaq100 -0.8%, Dax -0.3%; FTSE100 +0.1%
EUR 1.2421-1.2403; JPY 105.68-105.36; AUD 0.7703-0.7675;NZD 0.7275-0.7261
Apr Gold +0.0% at $1,342/oz; May Crude Oil -0.9% at $64.64/brl; May Copper -0.1% at $2.98/lb