Asian Mid-session Update: RBA on hold but retains easing bias
***Economic Data***
- (AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 2.25% VS EXPECTED 25BPS CUT TO 2.00%
- (JP) JAPAN JAN LABOR CASH EARNINGS Y/Y: 1.3% V 0.5%E; Real (ex-inflation) earnings y/y: -1.5% v -1.4% prior
- (JP) JAPAN FEB MONETARY BASE Y/Y: 36.7% V 37.4% PRIOR; MONETARY BASE END OF PERIOD: ¥278.9T V ¥278.6T PRIOR
- (AU) AUSTRALIA JAN BUILDING APPROVALS M/M: +7.9% V -2.0%E; Y/Y: +9.1% (4th straight increase) V -1.7%E
- (AU) AUSTRALIA Q4 CURRENT ACCOUNT BALANCE (A$): -9.6B V -11.0BE; NET EXPORTS OF GDP: 0.7% V 0.6%E
- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 112.5 v 110.8 prior
- (NZ) NEW ZEALAND FEB ANZ COMMODITY PRICE M/M: 1.8% V 1.0% PRIOR; 2nd month of increase after 9 months of decline
- (NZ) NEW ZEALAND FEB QV HOUSE PRICES: 6.4% V 5.7% PRIOR
- (KR) SOUTH KOREA FEB CPI M/M: 0.0% V 0.2%E; Y/Y: 0.5% V 0.7%E; CPI CORE Y/Y: 2.3% V 2.4%E
***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 -0.1%, S&P/ASX -0.6%, Kospi +0.2%, Shanghai Composite -0.9%, Hang Seng flat, Mar S&P500 -0.1% at 2,112
***Commodities/Fixed Income***
- Apr gold flat at $1,206, Apr crude oil +0.3% at $49.93/brl, May Copper -1.0% at $2.67/lb
- GLD: SPDR Gold Trust ETF daily holdings fall 7.8 tonnes to 763.5 tonnes; Lowest since Jan 30th
- SLV: iShares Silver Trust ETF daily holdings rise to 10,143 tonnes from 10,131 tonnes prior; highest since Jan 14th
- JGB: (JP) Japan MoF sells ¥2.18T in 0.4% (0.3% prior) 10-yr notes; Avg Yield: 0.396% v 0.313% prior; bid-to-cover: 2.77x v 2.68x prior
- (CN) PBoC to inject CNY35B in 7-day reverse repos (2nd consecutive injection)
- USD/CNY: (CN) PBoC sets yuan mid point at 6.1543 v 6.1513 (weakest Yuan setting since Nov 7th)
***Market Focal Points/FX***
- Probabilities for a 2nd consecutive RBA policy easing tracked above 60% heading into today's decision - both in economist surveys and the fixed income markets. However, after last month's unexpected cut, Gov Stevens once again surprised investors with a rate hold at 2.25%. The statement was mainly a reiteration of that of last month though notably more brief, since last month's decision went to some length in explaining the cut. Key component of the statement was the reiteration that further easing may be appropriate, which analysts perceive as continued easing bias likely to translate into an eventual easing in April or May. Also of note out of Australia, property prices were much stronger than expected, and housing inflation has been cited as a potential deterrent for RBA to take an extra accommodative stance. Economist with JPMorgan said the rise in property prices suggests demand is still outpacing supply, while also pointing to insufficient building activity pushing up prices. AUD/USD spiked up to $0.7830 after the surprise RBA hold - up about 80pips from session lows - while S&P/ASX fell toward 5,900 before recovering above 5,940 headed into the close.
- USD/JPY was also among the more active dollar majors, particularly in the afternoon session, falling about 70pips from the highs below ¥119.60. Influential PM Abe advisor Honda warned against potential overheating of the economy as a result of overly aggressive BOJ policy, presumably in attempt to forestall additional policy easing. Honda said the BOJ should not react to lower oil prices weighing on inflation. Separately, a Nikkei report citing QUICK Corp survey saw about 90% of respondents calling for the BOJ to change the time frame for achieving 2% inflation and over 50% for the BOJ to make the deadline vague and push it back. Meanwhile, Japan labor cash earnings - a closely watched inflation indicator - saw yet another negative y/y print on inflation adjusted basis headed into the key spring wage negotiations. In Tokyo equities, Sharp was a big mover to the downside following fresh press reports of impending reorganization and plant closures due to capital needs.
***Equities***
US markets:
- MDR: Reports Q4 $0.03 v -$0.05e, R$806.4M v $748Me; +24.1% afterhours
- OCN: Updates Q4 charges and expenses; +5.5% afterhours
- ASPS: Reports Q4 adj EPS $0.30, -83% y/y, R$255.9M v $260Me; +2.6% afterhours
- ISRG: Awarded $430M DoD contract; +1.4% afterhours
- PANW: Reports Q2 $0.19 v $0.17e, R$217.7M v $202Me; -1.1% afterhours
- MYL: Reports Q4 $1.05 v $1.04e, R$2.08B v $2.09Be; -1.5% afterhours
- CZR: Reports Q4 -$7.00 v -$2.04e, R$2.13B v $2.19Be; -7.9% afterhours
Notable movers by sector:
- Consumer Discretionary: Corporate Travel Management Ltd CTD.AU -3.6% (shareholder lowers stake); Surfstitch Group SRF.AU +5.3% (shareholder raises stake)
- Financials: Suncorp-Metway SUN.AU -2.6% (update on effect from tropical cyclone Marcia)
- Industrials: Downer EDI DOW.AU +1.0% (shareholder raises stake)
- Technology: Sharp Corp 6753.JP -7.5% (may seek capital infusion from lenders; to start reorganization); TCL Communication Technology 2618.HK +1.8% (FY14 results)