Asia Market Update: USD gains ahead of FOMC minutes; BHP disappoints, China markets to return from holiday tomorrow
***Headlines/Economic Data***
General Trend: Asian equity markets trade generally higher, despite declines in the US (*reminder: NYSE was closed on Monday for holiday)
- Taiwan’s Taiex opens over 1% higher in catch-up rally after return from Lunar New Year break
- Equity markets later pare gains
-Australian commodity related companies decline after earnings reports (BHP, Fortescue, Santos)
-Australia sells 10-year bonds at higher yield and lower bidto cover
- Thailand reports 2nd straight customs trade deficit in Jan amid higher imports
-Shanghai Composite resumes from Lunar Year Break on Thursday
-Aussie and Australia bond yields unable to hold onto gains post wage price data
-US Dollar (USD) trades generally firmer ahead of FOMC Minutes
Japan
-Nikkei 225 opened +0.1%; closed +0.2%
- Topix Electric Appliances Index +0.7%, Iron & Steel +0.6%; Securities -1.2%
- Mega-banks trade generally lower
- (JP) Japan reportedlyconsidering raising ¥2,000 ($19) casino entry fee - Japanese press
- (JP) Japan Currency Head Asakawa: Reiterates yenmoves are one sided
-(JP) Japan Feb prelim PMI Manufacturing: 54.0 v 54.8 prior
-(JP) Japan PM Abe seeking more stimulus to support economy beyond Olympics, he raised thetopic at a meeting of the Council on Economic and Fiscal Policy – Nikkei.Abe is preparing another round of economic stimulus to offset downward pressure following the consumption tax hike scheduled for October 2019 and the Olympics in 2020.
-(JP) BoJ Funo: Takes time to improve productivity; no need to be pessimistic onJapan's economy
-Coca-Cola Bottlers Japan, 2579.JP Ricoh to sell stake in Coca-Cola Bottlers back to the company for ¥55.9B(~9.2% stake)
-(JP) Japan Dec All Industry Activity Index M/M: 0.5% v 0.4%e
Korea
-Kospi opened +0.1%
- Automakers trade generally higher: GM said to be willing to invest $2.8B in Korean unit
- (KR) Bank of Korea (BOK) Gov Lee: US tradeprotectionism is stronger than expected; prepared for faster than expected USrate hikes
-(KR) South Korea Jan PPI M/M: 0.4% v 0.1% prior; Y/Y: 1.2% v 2.3% prior
-(KR) South Korea Feb first 20-days Exports -3.9% y/y; Imports +13.6% y/y
-(KR) North Korea officials have cancelled planned meeting with US VP Pence
- GM South Korea Gov't Official: GMwilling to make $2.8B investment in South Korea unit in the next 10 years
China/Hong Kong
-Hang Seng opened +0.6%, Shanghai Composite closed for holiday
- Hang Seng Energy Index +1.5%, Financials +1.3%, Info Tech+1.2%
Australia/New Zealand
- ASX 200 opened -0.3%; closed 0.0%
- ASX 200 Consumer Discretionary Index +0.9%, Financials flat; Resources -2%, Telecom -1%
- BHP [BHP.AU]: Declines over 4% after H1 results
- Fortescue [-4%], FMG.AU Reports H1 (A$) Net 681M v 667Me; adj EBITDA 1.83b v 1.8Be; Rev 3.68B v3.7Be
-SevenGroup [+12.4], SVW.AU Reports H1 (A$) underlying net 159.8M v 88.3M y/y; EBIT 223.5M v 157.9My/y; Rev 1.40B v 1.6Be
- (AU) Australia Jan Westpac Leading Index M/M:-0.2% v +0.2% prior
-(AU) Australia sells A$600M v A$600M indicated in 2.75% Nov 2028 bonds, avgyield 2.9052% v 2.8862% prior, bid to cover 4.50x v 5.43x prior
-(NZ) New Zealand Analysis on CPTPP: Economy may benefit from CPTPP by NZ$1.2B/yr
-(AU) AUSTRALIA Q4 CONSTRUCTION WORK DONE Q/Q: -19.4% V -10.0%E
-(AU) AUSTRALIA Q4 WAGE PRICE INDEX Q/Q: 0.6% V 0.5%E; Y/Y: 2.1% V 2.0%E
-(NZ) Incoming RBNZ Gov Orr: Comfortable with planned reforms for the RBNZ;clear communication is critically important
-(AU) IMF on Australia: Sees 2018 GDP at 2.9%; 2019 3.1% - Article IV Consultation
North America
- US equity markets ended lower: Dow -1%, S&P500 -0.6%, Nasdaq -0.1%, Russell 2000-0.9%
- S&P500 Consumer Staples -2.3%, Utilities -1.3%
- WMT Walmart.com CEO Marc Lore saidto be preparing to leave Walmart - NY Post
- (US) TREASURY SELLS $28B IN 2-YEAR NOTE AUCTION;DRAWS 2.255%; BID-TO-COVER RATIO: 2.72 V 3.22 PRIOR AND 2.86 AVG OVER THE LAST 12 (highest yield since Aug 2008)
-(US) Treasury $55B 4-week bills draw 1.380%, BTC 2.48 (lowest BTC since July 2008)
Looking Ahead: US FOMC Meeting Minutes and Jan Existing Home Sales to be released , along with Weekly API Crude Oil Inventories
Europe
-(EU) EURO ZONE FEB ADVANCE CONSUMER CONFIDENCE:0.1 V 1.0E
Looking Ahead: Euro Zone, France and Germany Feb Prelim Services and Manufacturing PMIs due for release
-UK Dec Avg Earnings and Unemployment Rate data to be released, along with Jan Claimant Count Change
***Levels as of 01:00ET***
- Nikkei225 +0.2%, Hang Seng +1.1%; Shanghai Composite closed for holiday; ASX200 0.0%, Kospi +0.6%
- Equity Futures: S&P500 -0.1%; Nasdaq 100 +0.8%,Dax -0.1%; FTSE100 +0.1%
- EUR 1.2344-1.2317; JPY107.90-107.28; AUD 0.7901-0.7848;NZD 0.7355-0.7326
- Apr Gold -0.2% at $1,329/oz; Apr Crude Oil -1.0% at $61.16/brl; Mar Copper -0.4% at $3.18/lb