Asia Market Update: BoJ again offers unlimited fixed rate JGB operation as 10-year yield approached 0.10%; Markets await US payrolls figures
***Headlines/Economic Data***
General Trend: Asian equities trade generally lower
- Nikkei 225 declines despite BoJ bond operation; another heavy day for Japan corporate earnings
- South Korean chip makers decline over 3%
- Sony names CFO as new CEO
- Japan’s Mitsubishi Electric gains over 1%, as it raised its FY outlook amid higher profits in industrial automation systems business
- REITs and Utilities underperform amid rise in global bond yields
- Amazon and Apple gain in the afterhours following earnings, while Alphabet declines
- Commodity currencies underperform
- Markets looking ahead to upcoming US payrolls report
Australia/New Zealand
-ASX 200 opened flat; closed +0.5%
-ASX 200 Energy Index +2%, Resources +0.7%, Financials +0.5%; REIT -1.2%, Utilities -0.4%
-Building materials firm James Hardie [JHX.AU] trades higher by over 4%: Reports Q3 adj Net $69.9M v $62Me; EBIT $97.4M v $92Me; Rev $495M v $493Me
-Woolworths [WOW.AU]: Gains over 2% amid positive broker commentary
-Telstra [TLS.AU]: Declines over 0.5% after announcing A$273M impairment charge related to US video business
-(AU) Australia sells A$500M in 2047 bonds, avg yield 3.4359%, bid to cover 2.53X
-(AU) Australia Q4 PPI Q/Q: 0.6% v 0.2% prior; Y/Y: 1.7% v 1.6% prior
-(NZ) New Zealand Jan ANZ Consumer Confidence: 126.9 v 121.8 prior
-(NZ) New Zealand Dec Net Migration: 5.70K v 5.61K prior
-(NZ) New Zealand Dec Building Permits M/M: -9.6% v +9.6% prior
China/Hong Kong
- Hang Seng opened -0.2%, Shanghai Composite -0.8%
- Hang Seng Energy Index +2.6%, Materials +1.1%; Telecom -0.7%
- (CN) PBOC SETS YUAN REFERENCE RATE AT 6.2885 V 6.3045 PRIOR
- (CN) China PBoC: Skips OMO (7th straight session) v skipped prior; - For the week, the PBoC drained a net of CNY760B v CNY320B net drain w/w
- (CN) According to China Securities Times Commentary piece the yuan (CNY) rate becomes less predictable
- (CN) Researchers see China keeping benchmark interest rate unchanged (in line with recent reports) – China Daily
Japan
-Nikkei 225 opened -0.5%; Closed -0.9%
-TOPIX Real Estate Index -0.9%
-Nomura [8604.JP]: Declines over 2.5% after reporting Q3 results
- Sony [6758.JP]: Says CEO Hirai to become Chairman and CFO Yoshida to become CEO, effective April 1st
-(JP) BOJ announcement related to daily bond buying operation: To buy ¥450B in 5-10 yr JGBs vs ¥410B prior; Offers to buy unlimited amount of 10-yr JGBs at 0.11% in special fixed-rate operation
-(JP) BoJ: Again no takers in 5-10 year JGB fixed-rate buying operation [**Note: There were also no bidders in the prior fixed-rate operation held in July 2017]
-(JP) Japan Monetary Base Y/Y: 9.7% v 11.2%e prior
-(JP) Japan Chief Cabinet Sec Suga: No plan for US Vice President Pence to meet with Finance Min Aso when he visits Japan from Tuesday Feb 6th; No plans to resume Japan-US economic dialogue during Pence's visit next week.
Korea
- Kospi opened -0.1%
- Chip makers trade lower: Samsung Electronics and Hynix decline by over 3%
North America
- US equities ended mixed: Dow +0.1%, S&P500 -0.1%, Nasdaq -0.4%, Russell 2000 +0.3%
- S&P500 Real Estate -1.8%, Utilities -1.6%; Energy +1%, Financials +0.9%
- Apple [AAPL]: Gained over 3% in the afterhours: Reports Q1 $3.89 v $3.82e, Rev $88B v $86.3Be; Guides Q2 Rev $60-62B v $65.4Be; Q1 iPhone shipments 77.3M v 78.3M y/y (v 80Me)
- Amazon [AMZN]: Gained over 6% in the afterhours: Reports Q4 $3.75 v $1.85e, Rev $60.5B v $60.0Be; Guides Q1 Rev $47.8-50.8B v $48.9Be
- Alphabet [GOOGL]: Declines over 2% in afterhours: Reports Q4 $9.70 adj v $10.12e, Rev $25.8B (ex $6.45B TAC) v $25.7Be; authorizes $8.6B repurchase of Class C capital stock
- AT&T [T]: Said to have hired Bank of America to help examine divestiture of data center business - US financial press
- (US) House mulling vote next week on stopgap spending bill to fund govt through March 22nd - Politico
Europe
-(EU) ECB's Nowotny: we are now in a situation where we should end asset purchase program; Halting asset purchase program will bring a rise to long-term interest rates; ECB will decide on the future of the asset purchase program by Sept - press
-(EU) Some ECB officials reportedly would like clearer interest rate guidance on concerns that vague language will increase market volatility – press
-(UK) PM May advisers reportedly considering customs union deal following Brexit – press
-(UK) BOE's Brazier: BOE wants to put insurance companies and pension funds through stress simulations
-(DE) Germany CSU Scheuer (Bavaria): 'Large' barriers remain in Germany government talks [**Note: The comments follow the government talks in Berlin]
-Deutsche Bank [DBK.DE]: CFTC orders Securities unit to pay $70M penalty in relation to alleged attempted manipulation of US dollar (USD) ISDAFIX benchmark swap rates - US financial press
***Levels as of 01:00ET***
- Hang Seng flat; Shanghai Composite -0.4%; Kospi -1.6%
- Equity Futures: S&P500 -0.1%; Nasdaq100 +0.5%, Dax -0.2%; FTSE100 flat
- EUR 1.2488-1.2519 ; JPY 109.23-109.71; AUD 0.7994-0.8046 ;NZD 0.7362-0.7406
- Feb Gold +0.2% at $1,350/oz; Feb Crude Oil +0.5% at $66.11/brl; Mar Copper flat at $3.215/lb