Asian Mid-session Update: China February Trade weighed down by drop in imports and seasonality; Japan Q4 recovery slower than expected
***Economic Data***
- (CN) CHINA FEB TRADE BALANCE: $60.6B V $10.8BE (record high surplus); Exports Y/Y: +48.3% v -3.3% prior; Imports Y/Y: -20.8% v -19.9% prior (biggest decline since May 2009)
- (JP) JAPAN Q4 FINAL GDP Q/Q: 0.4% V 0.5%E; ANNUALIZED GDP: 1.5% V 2.2%E; NOMINAL GDP: 1.0% V 1.1%E; Confirms emergence from technical recession
- (JP) JAPAN FEB BANK LENDING (INCL TRUSTS): 2.5% V 2.5% PRIOR; BANK LENDING (EX- TRUSTS): 2.6% V 2.6%E
- (JP) JAPAN JAN CURRENT ACCOUNT: ¥61.4B V ¥270BE; ADJ CURRENT ACCOUNT: ¥1.06T V ¥1.18TE; TRADE BALANCE: -¥864B V -¥936BE
- (AU) AUSTRALIA JAN ANZ JOB ADS M/M: 0.9% V 1.2% PRIOR (9TH CONSECUTIVE INCREASE)
- (NZ) NEW ZEALAND Q4 MANUFACTURING ACTIVITY Q/Q: -0.7% V -1.1% PRIOR; MANUFACTURING ACTIVITY VOLUME Q/Q: 0.9% V 0.5% PRIOR
***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 -0.6%, S&P/ASX -1.3%, Kospi -0.7%, Shanghai Composite -0.9%, Hang Seng -0.6%, Mar S&P500 -0.3% at 2,067
***Commodities/Fixed Income***
- Apr gold flat at $1,169, Apr crude oil -0.8% at $49.43/brl
- GLD: SPDR Gold Trust ETF daily holdings fall to 756.3 tonnes from 760.8 tonnes; Lowest since Jan 27th
- USD/CNY: (CN) PBoC sets yuan mid point at 6.1563 v 6.1533 prior setting; weakest Yuan setting since Nov 7th
- (JP) BOJ offers to buy ¥1.0T in T-bills
***Market Focal Points/FX***
- China markets are leading the regional decline, with mixed February trade data compounded by Friday losses on Wall Street after the better than expected US jobs figures added to expectation of an impending rate hike by the Federal Reserve. Although China posted a record high surplus, imports decline exceeded expectations and marked the largest drop in nearly 6 years. A near 50% rise in exports was also indicative of the data being distorted by seasonality of off-month Lunar New Year timing this year. The decline in demand for basic material components of the trade numbers further underscore the slowing mainland economy - imports of iron ore were down 14% and crude oil down 9% on the year. Speaking over the weekend, China premier Li remarked there is more room for further stimulus measures if economic challenges persist deeper into 2015. AUD/USD remains under pressure in the Asian session, falling to 1-month lows below $0.77. NZD/USD is also down some 30pips around $0.7340.
- Japan Cabinet Office released the final Q4 GDP data that confirmed the economy emerged out of recession, but did so at a slower than expected pace. Private consumption component was up 0.5% - ahead of 0.3% prelim and consensus - but corporate sentiment remained cautious, as investment contracted by 0.1% again vs expected 0.2% pickup. Japan Chief Cabinet Sec Suga spoke after the release, noting economy is still on recovery track. Likewise, BOJ Dep Gov Nakaso remarked the trend toward achieving the 2% inflation target is more important than the pace, although he still expects to reach that goal some time in FY15 unless oil prices continue to pull CPI lower. USD/JPY traded in a 20-pip range just below the ¥121 handle.
- Earlier this weekend, OPEC chief el-Badri noted the current price does not reflect fundamentals even though the market remains oversupplied. Goldman Sachs has also projected continued decline in WTI all the way down to $40/brl as inventories remain high. Oil prices were down nearly 1% in afternoon electronic trade below $49.50/brl.
- Greek govt officials sent a set of proposals to their EU "partners" last week, however the latest reports suggest the lenders have scoffed at the vague set of promises that falls short of what the Syriza negotiators promised in Brussels. Eurogroup chairman Dijsselbloem noted Athens is unlikely to receive a disbursement of aid this month, and PM Tsipras said the new govt could consider another referendum option if European partners reject their promises. After falling to multi-year lows on Friday, EUR/USD traded down further toward $1.0820 before a marginal bounce to $1.0850.
***Equities***
US markets:
- TSLA: Spokesman: Company remains strong and stable in China; To make personnel changes in China - financial press
Notable movers by sector:
- Financials: CITIC Securities 600030.CN -3.8%, Haitong Securities 600837.CN -4.9%, Huatai Securities 601688.CN -5.7% (banks may receive brokerage licenses)
- Materials: Regis Resources RRL.AU -10.0% (analyst action); China Resource Cement 1313.HK -1.3% (FY14 results)
- Industrials: Orient Overseas International 316.HK -3.0% (FY14 results)
- Technology: Japan Display 6740.JP +4.2% (plans on LCD plant); Leshi Internet Info & Tech Co Beijing 300104.CN +2.3% (MIIT encourages Leshi on innovations)