Asian Mid-session Update: Stocks rebound as weak US retail sales diminish case for Fed hike
***Economic Data***
- (NZ) NEW ZEALAND FEB NON RESIDENT BOND HOLDINGS: 65.7% v 65.8% PRIOR
- (NZ) NEW ZEALAND FEB MANUFACTURING PMI: 55.9 V 50.7 PRIOR
- (SG) SINGAPORE Q4 FINAL UNEMPLOYMENT RATE: 1.9% V 1.9%E
- (KR) SOUTH KOREA FEB IMPORT PRICE INDEX M/M: 2.8% V -7.5% PRIOR; Y/Y: -17.8% V -19.4% PRIOR; EXPORT PRICE INDEX M/M: -7.9% V -8.6% PRIOR; Y/Y: 1.5% V -4.3% PRIOR
- (PE) PERU CENTRAL BANK LEAVES REFERENCE RATE UNCHANGED AT 3.25%, AS EXPECTED
***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 +1.4%, S&P/ASX +1.0%, Kospi -0.6%, Shanghai Composite +0.9%, Hang Seng +0.4%, Mar S&P500 +0.1% at 2,066
***Commodities/Fixed Income***
- Apr gold +0.6% at $1,159, Apr crude oil +0.5% at $47.15/brl
- GLD: SPDR Gold Trust ETF daily holdings fall 2.0 tonnes to 753.0 tonnes; Lowest since Jan 26th
- USD/CNY: PBoC sets yuan mid point at 6.1588 v 6.1617 prior setting (first stronger yuan setting since Mar 4th)
- (JP) BOJ offers to buy ¥300B in 1-3yr JGBs, ¥350B in 3-5yr JGBs and ¥400B in 5-10yr JGBs as well as ¥1.0T in T-bills
- (AU) Australia MoF (AOFM) sells A$700M in 2.75% bonds due 2019; Avg yield: 1.9991%; Bid-to-cover: 3.21x
- (US) Weekly Fed Balance Sheet Total Assets for week ending Mar 11th: $4.49T v $4.49T prior; Reserve Bank Credit: $4.45T v $4.45T prior; M1 y/y change: 9.5% v 9.4% w/w; M2 y/y change: 6.0% v 6.0% w/w
***Market Focal Points/FX***
- Asian equity markets are generally higher, tracking a strong session of gains on Wall Street. Third consecutive decline in US retail sales disappointed expectations for an increase, in turn helping reverse the rally in the US dollar and slow down the building momentum for policy tightening in the US. With the focus now shifting to next week's FOMC policy statement and expectations of removal of the "patient" language, USD majors are in narrow ranges - EUR/USD in 30pip band above $1.06, USD/JPY in 20pip range below 121.50, and AUD/USD down over 20pip below $0.7680.
- Shanghai Composite extended on its gains to 6-week highs, approaching 6-year highs near 3,400. Overnight, China released better than expected M2 (Y/Y: 4-month high 12.5% V 11.0%E) and Lending data (1.02T V 0.8Be), though CICC noted the growth is unlikely to be sustainable amid a cooling economy and declining prices. Beijing's "mouthpiece" People's Daily however reported that China should be able to sustain annual GDP growth of about 7%.
- In Japan, BOJ Gov Kuroda noted wage growth would be needed to sustain inflation pressure, while also forecasting further increase in consumer prices. To that end, Nikkei reported that Japan's top 6 electronics companies are in final stages of wage talks to raise monthly base pay by a record ¥3K v ¥2K last year.
- Outside of the sparse regional Asia developments, German-Greek negotiations remain testy. German Fin Min Schaeuble continued to trade barbs with his Athens counterpart, reiterating Greece must fulfill obligations under current program or there will be no more payments and adding an "accidental" Grexit cannot be ruled out. In the Middle East, Iran and UN Security Council's P5+1 were reportedly in talks over a resolution lifting US sanctions if a nuclear agreement can be hashed out. Such a resolution would be binding and make it more difficult to challenge by the US Congress member faction opposed to negotiations.
***Equities***
US markets:
- HLF: FBI, US attorney probe Ackman over potential Herbalife manipulation - financial press; +9.0% afterhours
- ULTA: Reports Q4 $1.33 (adj) v $1.26e, R$1.05B v $1.02Be; +8.8% afterhours
- LOCO: Reports Q4 $0.14 v $0.12e, R$90M v $87.5Me; +8.5% afterhours
- FXCM: Reports Q4 $0.20 v $0.17e, R$134.7M v $117Me; +8.4% afterhours
- IMOS: Reports Q4 $0.63 v $0.41e, R$183.4M v $186Me; +2.0% afterhours
- IBM: Said to be considering using underlying bitcoin technology called 'blockchain' to create a digital payment system for major currencies - press; -0.2% afterhours
- KTOS: Reports Q4 $0.11 v $0.05e, R$221.5M v $232Me; -1.0% afterhours
- ZUMZ: Reports Q4 $0.80 adj v $0.80e, R$258.6M v $257Me; -5.1% afterhours
- IRG: Reports Q4 -$0.25 v -$0.25e, R$177.3M v $179Me; -7.9% afterhours
- ARO: Reports Q4 $0.01 v -$0.03e, R$593.8M v $594Me; Guides Q1 -$0.61 to -$0.53 v -$0.36e; -9.5% afterhours
Notable movers by sector:
- Consumer Discretionary: Tokyo Dome Corp 9681.JP -1.3% (FY14/15 results)
- Financials: Ping An Bank 000001.CN +4.7% (FY14 results)
- Materials: Regis Resources RRL.AU +4.5% (H1 results); Lynas Corp LYC.AU -3.9% (H1 results)
- Industrials: Worley Parsons WOR.AU +3.7% (awarded contract); China Aluminum International Engineering 2068.HK +19.8% (FY14 results)
- Technology: NHN 035420.KR +3.2% (to introduce mobile payment platform); Kyocera Corp 6971.JP +1.8% (to launch home energy storage system); Iinet IIN.AU +24.6% (to be acquired)