Asia Market Update: Asian equities generally track gains in the US amid multiple holiday-related closures
General Trend:
-On Friday, market holidays are seen in countries including US, Australia, Hong Kong, New Zealand, India, Indonesia, the Philippines and Singapore. There are also multiple closures in Europe
-End of Q1 and Japan FY in focus; US dollar (USD) trades generally weaker
-Yen (JPY) on track for best quarter since 2016
-Foreigners continue to sell Japanese equities; US-based Japan stock funds outflows total $638M in weekly period (5th straight week of outflows), says Lipper
-Global equities on track for worst quarter since 2015 – Financial Times
-Bank of China declines after FY17 earnings report
-Japan and South Korea industrial production supported by auto and chip sectors
-Japan Feb Jobless Rate rises off of prior historic low
-China PBoC skipped open market operation (OMO) for 6th straight session; continued to drain liquidity
M&A: Merger talks speculated between Humana and Walmart
-China sovereign wealth fund (CIC) said to have considered investment in Softbank’s Vision Fund
-China said to consider merging shipbuilding companies
-Nomura ventures into the ‘robo advising’ space
Australia/New Zealand
-ASX 200 closed for holiday
China/Hong Kong
-Shanghai composite opened flat; Hang Seng closed
-Shanghai Composite Property sub-index declines
-Huawei: Reports FY17 (CNY) Net 47.5B, +28% y/y; Rev 603.6B, +15.7% y/y
-(CN) China said to plan to merge shipbuilding companies China State Shipbuilding Corp (CSSC) and China Shipbuilding Industry Corp - US financial press
-(CN) China said to be taking first steps to pay for imported crude oil in yuan in 2018 (as opposed to US dollars)- financial press
-(CN) China PBoC Open Market Operation (OMO): Skips OMO (6th straight session) v skipped prior; Net: CNY30B drain v CNY40B drain prior
-(CN) China PBoC sets yuan reference rate at 6.2881 v 6.3046 prior
-(CN) China yuan (CNY) to have more 'noticeable' fluctuation - Chinese Press
-(CN) China PBoC speculated to begin ‘crackdown’ on all types of virtual currencies in 2018 – financial press
Looking Ahead: China March official Manufacturing and Services PMIs due for release at 21:00 ET
Japan
-Nikkei 225 opened +1.1%; closed +1.4%
-TOPIX Real Estate Index +1.2%
-Japan Display [6740.JP]: Declines after confirming capital raise plan
-Rakuten [4755.JP]: Mobile unit said to offer plan than costs 30% less than those offered by competitors - Japanese Press
-(JP) JAPAN FEB JOBLESS RATE: 2.5% V 2.6%E
-(JP) JAPAN FEB PRELIM INDUSTRIAL PRODUCTION M/M: 4.1% V 5.0%E; Y/Y: 1.4% V 2.3%E
-(JP) Japan March Tokyo CPI Y/Y: 1.0% v 1.3%e; Ex-Fresh Food (Core) Y/Y: 0.8% v 0.9%e
-(JP) BoJ Dep Gov Amamiya: Interest paid on BoJ current account is not subsidy, used to guide market rates; Reiterates bond buying can fluctuate depending on market conditions, but this is different from the US Fed's 'tapering'
-(JP) US-based Japan stock funds outflows total $638M in weekly period (5th straight week of outflows) – Lipper
-(JP) From April 2017 through March 24th, investors in Japan purchased a net of ¥11T ($103B) in foreign equities; Japanese purchases of foreign bonds during this period were ¥6.0T; This is the first time that net foreign stock purchases by Japanese investors were higher than net purchases of foreign bonds in a fiscal year since data started being complied in FY1996, according to the article. – Japanese Press
Looking Ahead: BoJ expected to later today announce monthly bond buying plan for April
South Korea
-Kospi opened +0.7%
-(KR) Pres Trump: may delay trade deal with South Korea until after talks with North Korea [Note: In terms of South Korea, some US officials are said to be concerned that the country could decide to enter into a deal with North Korea too quickly, said a financial press report]
-(KR) South Korea Feb Industrial Production M/M: 1.1% v 0.5%e; Y/Y: -6.4% v -3.1%e (largest y/y decline since 2013)
-(KR) At end of 2017, US dollar (USD) denominated assets made up 68% of South Korea FX reserves v 70.3% y/y
-(KR) Bank of Korea (BoK) reported FY17 Net KRW3.96T ($3.7B) v KRW3.38T y/y - local press
North America
-US equity markets ended higher: Dow +1.1%, S&P500 +1.4%, Nasdaq +1.6%, Russell 2000 +1.1%
-S&P500 Energy +2.1%, Tech +2%
-Humana [HUM]: In the afterhours, shares gain over 13% amid press speculation related to Walmart
-Tesla [TSLA] declined over 2% in the afterhours: Announced voluntary recall of 123K Model S sedans built before April 2016, cites power steering bolts - financial press
- (US) Pres Trump: Infrastructure plan will likely have to wait until after 2018 midterm elections
-(US) Fed's Harker (non-voter, moderate): Would be willing to slow rate hikes if bond yield curve doesn't steepen sufficiently - Q&A with reporters
Europe
-GKN [GKN.UK]: Melrose has received 52.4% of valid acceptances for voting rights of GKN; Acceptance Condition has today been satisfied
-HSBC [HSBC]: Said to agree to pay $100M to settle Libor antitrust claims with OTC investors - US financial press
***Levels as of 02:00ET***
- Hang Seng closed; Shanghai Composite +0.3%; Kospi +0.8%
- EUR 1.2289-1.2300 ; JPY 106.13-106.55; AUD 0.7672-0.7690 ;NZD 0.7220-0.7237