Asian Market Update: Australia unemployment rises to 10-year highs; China drains liquidity injected before Lunar New Year; BOK remains on hold
***Economic Data*** - (KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 2.50% (AS EXPECTED); (9TH STRAIGHT PAUSE) - (AU) AUSTRALIA JAN EMPLOYMENT CHANGE: -3.7K (2nd consecutive decline) V +15.0KE; UNEMPLOYMENT RATE: 6.0% V 5.9%E (highest reading since Jul 2003) - (AU) AUSTRALIA FEB CONSUMER INFLATION EXPECTATION: 2.3% V 2.3% PRIOR - (NZ) NEW ZEALAND JAN BUSINESS MANUFACTURING PMI: 56.2 V 56.4 PRIOR (3-month low) - (JP) JAPAN JAN DOMESTIC CGPI M/M: 0.1% V 0.1%E; Y/Y: 2.4% V 2.4%E - (UK) UK JAN RICS HOUSE PRICE BALANCE: 53% V 58%E (4-month low)
***Highlights/Observations/Insights*** - Cisco slides over 4% in extended session despite a narrow beat on top and bottom lines following soft Q3 guidance. - Whole Foods down over 7% after missing estimates and cutting FY targets. - Lenovo up marginally after Q3 results that saw the PC giant expand its market share to record-high 18.5%; Smartphone shipments also spike nearly 50%; Overall sales boosted by China Rev which now accounts for nearly 40% of the total. - CNBC's Faber tweets Comcast to acquire Time Warner Cable for $159/shr in a $42B deal. - Australia saw its 2nd consecutive decline in net employment, pulling jobless rate to a 10-year high of 6.0%; Participation rate also comes in soft, remaining at multi-year low of 64.5%. Analysts suggest the soft labor market will make RBA think twice about even hinting about higher rates despite dropping its easing bias last week. - BOK on hold for 9th consecutive month in another unanimous decision. BOK Gov Kim increasingly more alarmed about the impact of Fed taper on the emerging economies. - China remains on the sidelines in terms of open market operations for the 3rd straight session, mopping up short-term liquidity injected ahead of the Lunar New Year holiday.
***Fixed Income/Commodities/Currencies*** - (JP) BOJ offers to buy ¥400B in 5-10yr JGB and ¥200B in JGB with maturity over 10-yr - (CN) Daily Shibor fixings: O/N: 3.6690% v 4.0750% prior (3rd consecutive decline, lowest since Jan 20th); 1-week: 5.0210% v 5.1780% prior (4th consecutive decline) - (CN) PBoC won't conduct open market operations (OMO) in today's session (3rd consecutive session of halted operations); Drains net CNY450B this week v injected CNY75B prior - (CN) PBoC sets yuan mid point at 6.1100 v 6.1078 prior setting (weakest Yuan setting since Jan 22nd) - (CN) China Qinhuangdao coal price falls to CNY565-575/t (5th consecutive decline; lowest level since late Nov)
- AUD/USD collapsed by about 100pips or over 1% below $0.8930 after the disappointing employment data, erasing the gains of the past two sessions that saw rallies from strong China data and solid NAB business conditions. NZD/USD is pulled below $0.83, down over 30pips from the highs. EUR/USD recovers above $1.36, while GBP/USD consolidates above $1.66 after the overnight post-BOE spike. Risk aversion in the afternoon session weighing on USD/JPY as it slides about 50pips toward the ¥102 handle.
***Speakers/Political/In the Papers*** - (CN) China Premier Li Keqiang: China should continue to focus on air pollution treatment; To allocate CNY10B from central govt to reward for air pollution treatment - Chinese press - (JP) Japan BOJ Gov Kuroda: BOJ easing putting downward pressure on bond yields - addressing parliament - (JP) Japan PM Abe: Have yet to decide whether to raise sales tax to 10% - addressing parliament - (JP) Japan Chief Cabinet Sec Suga: want to discuss various regional cooperation issues during US pres Obama's planned visit to Japan - (AU) Australia Treasurer Hockey: Australia jobless data is disappointing but in line with expectations; need GDP +3% for job improvement - (AU) HSBC's Bloxham: Clear that Australia's labor sector is lagging other indicators in economy - Australian press - (KR) South Korea Fin Min Hyun: To step up monitoring of FX market; South Korea Fin Min Hyun: To strengthen monitoring of FX market - (KR) South Korea Ministry of Land, Transport and Maritime Affairs: January housing transactions rose to 58.8K, +117.4% y/y - Korean press - (KR) South Korea govt said to push for more labor market flexibility as part of a 3-year plan to be unveiled later this month - Korean press
**US/Europe** - (EU) ECB's Coene (Belgium): Eurozone inflation of 0.7% is not a sufficient element to spur ECB to new measures - financial press - (US) Fed's Fisher (hawk, FOMC voter): Taper likely to continue, barring economic reversal
***Equities*** Market Snapshot (as of 04:30 GMT): - Nikkei225 -1.4%, S&P/ASX flat, Kospi -0.1%, Shanghai Composite +0.1%, Hang Seng -0.3%, Mar S&P500 -0.2% at 1,812, Apr gold -0.4% at $1,290, Mar crude oil -0.6% at $99.82/brl
US markets: - TWC: Comcast to acquire all of Time Warner Cable in all stock deal for $159/shr; Deal estimated at $45.2B - financial press - SKX: Reports Q4 $0.28 v $0.17e, R$450.7M v $449Me; +15.1% afterhours - BGC: Reports Q4 $0.36 v $0.28e, R$1.66B v $1.54Be; +12.3% afterhours - CBS: Reports Q4 $0.78 v $0.76e, R$3.91B v $3.83Be; +4.4% afterhours - NVDA: Reports Q4 $0.32 v $0.18e, R$1.14B v $1.05Be; +3.9% afterhours - CAKE: Reports Q4 $0.57 v $0.59e, R$475M v $483Me; Guides Q1 $0.48-0.50 v $0.51e, SSS flat to 1% - conf call; +1.5% afterhours - MET: Reports Q4 $1.37 adj v $1.30e, R$18.38B v $17.0Be; +0.7% afterhours - AMAT: Reports Q1 $0.23 adj v $0.22e, R$2.19B v $2.16Be; +0.5% afterhours - CTL: Reports Q4 $0.68 v $0.59e, R$4.54B v $4.52Be; -0.4% afterhours - MDLZ: Reports Q4 $0.42 v $0.44e, R$9.49B v $9.59Be; -2.9% afterhours - NTAP: Reports Q3 $0.75 v $0.71e, R$1.61B v $1.63Be; -3.2% afterhours - CSCO: Reports Q2 $0.47 v $0.46e, R$11.2B v $11.1Be; Increases quarterly dividend 12% to $0.19 from $0.17/shr; Guides Q3 Rev -8% to -6% y/y v -6.5%e (implies R$11.2-11.5B v $11.4Be) - conf call; -4.2% afterhours - SPWR: Reports Q4 $0.47 v $0.28e, Rev (GAAP) $638M v $688Me (non-GAAP $758.2M; unclear if comp); -4.7% afterhours - WFM: Reports Q1 $0.42 v $0.44e, R$4.24B v $4.29Be; -7.5% afterhours - LF: Reports Q4 $0.00 v $0.12e, R$186.7M v $213Me; authorizes $30M (6.2% of market cap) stock buyback; -10.2% afterhours - ITRI: Reports Q4 $0.72 (ex items) v $0.76e, R$524M v $527Me; -15.5% afterhours
Notable movers by sector: - Consumer Discretionary: David Jones DJS.AU -1.3% (Q2 results); China South Publishing & Media Group 601098.CN +2.4% (prelim FY13 results); Asahi Group 2502.JP -5.4% (FY12/13 results) - Consumer staples: Mengniu Dairy 2319.HK +4.5%, China Coal Energy 1898.HK -3.2% (Mengniu Dairy to replace China Coal Energy in Hang Seng Index) - Financials: Australian Stock Exchange ASX.AU +1.9% (H1 results); Kerry Properties 683.HK +2.0% (positive profit alert) - Materials: Newcrest Mining NCM.AU +3.0% (no plans to raise equity) - Industrials: BYD Corp 1211.HK +6.7%, Zoomlion Heavy Industry Science and Technology 1157.HK -2.5% (BYD to replace Zoomlion in Hong Kong H-Shares Index) - Technology: TCL Corp 000100.CN +1.9% (Jan results); Lenovo 992.HK -0.5% (Q3 results) - Telecom: Telstra Corp TLS.AU +1.0% (H1 results); Softbank 9984.JP -2.9% (9M results)