Asia Market Update: USD slightly stronger around the globe; Kuroda expected to continue with policy path in second term; Samsung to cut OLED production on poor iPhone X sales
***Headlines/EconomicData***
General Trend: Nikkei and Australian equities decline following gains on Monday's session
- HSBC FY17 Adj Revenues rise 5% y/y primarily driven by higher revenue in 3 main global businesses; To issue up to $7.0B in Tier 1 capital
- Indian banks continue to detail exposures related to billionaire jeweler Nirav Modi amid fraudulent transactions at Punjab National Bank
- India Bank index declines by over 1%, Rupee drops
Japan
-Nikkei 225 opened -0.4%; closed -1.0%
- Topix Electric Appliances Index -1.5%, Real Estate -1.4%, Securities -1.1%
- Large banks decline
- Automakers trade generally lower and reverse gains from Monday’s session
- (JP) Japan Econ Min Motegi: Japan will soon be out of deflationary situation
- (JP) Japan FSA has urged local banks to review foreign bond management – Asahi
-(JP) Japan Fin Min Aso: Expect BOJ to keep working with govt to beat deflation;reaching 2% inflation is a way to prove Japan has beat deflation
-(JP) Japan corporate poll shows that a little over 50% of Japanese companies do not plan to raise base pay this year
-7211.JP Mitsubishi confirms considering raising stake in Mitsubishi Motors, no decision has been made yet
- Looking Ahead: Japan prelim Feb Manufacturing PMI due for release on Wed
Korea
-Kospi opened -0.4%
- Samsung, [-1.7%],005930.KR To cut OLED panel productionby 60% amid slow iPhone X sales – Nikkei
-(KR) South Korea PM Lee Nak-yon: GM Korea decided to shut down its Gunsan plantand the US Trump administration is putting together measures restricting steelimports; pushing us into a difficult situation - Korean press
-(KR) Economists note a failure to properly respond to currency fluctuationscould lead to sparking foreign capital flight or dampening exports from SouthKorea - Korean press
-GM Korea union demanding debt for equity swap and a new production model; said to have offered ~$2.2B debt for equity swap for Korean operations
-(KR) South Korea to allow non-financial firms to currency trade, starting in March - Korean press
-(KR) South Korea Fin Min Kim reiterates market decides FX rate and to take steps on Won (KRW) if needed - South Korean Press
China/Hong Kong
-Hang Seng opened %, Shanghai Composite closed for holiday
- Hang Seng Financials Index -1.4% (HSBC declines after earnings report)
- Alibaba Pictures [+7%], 1060.HK, strength attributed to strong Lunar New year box office
- Rusal [486.HK]: Declines over 3% as the company denied any plan to change CEO
-(CN)China Housing Ministry: Will interfere if local property curbs go against China's policy direction – press
- HSBC, HSBA.UK Reports FY17 Adj pretax $20.99B v $19.3B y/y, Adj Rev $51.5B v $50.2B y/y; To issue $5.0-7.0B in tier 1 capital in H1
Australia/New Zealand
-ASX 200 opened -0.2%; closed flat
- ASX 200 Resources Index -0.8%, Telecom -0.6%, Financials -0.4%
- Telecom Vocus Communications [VOC.AU] declines over 10% after cutting dividend and outlook
- BHP [BHP.AU] declines ahead of earnings report
- (NZ) New Zealand Q4 PPI Input Q/Q: 0.9% v 1.1% prior; PPI Output Q/Q: 1.0% v 1.0%prior
-(AU) RBA Assistant Gov Bullock: Mortgage stress in Australia is stillrelatively low; Banking system is strong and well capitalized, supportedby prudent lending standards
- (AU) RESERVE BANK OF AUSTRALIA (RBA) FEB MINUTES:Low rates helping to reduce unemployment and lift inflation
-NAB.AU Said to be getting ready to layoff the first 1.0K roles under the A$1.0B cost cutting initiative last year
Looking Ahead: Australia Q4 wage price index due for release on Wednesday
Other Asia
- (SG) Singapore Fin Min:Planning 2ppt raise to GST from 2021-20215 taking the rate to 9% in order tosupport aging society
-(SG) Singapore Minister: Property tax isnt about cooling the market, we are competitive despite higher tax
North America
- Mosaic [MOS] Reports Q4 $0.34* v $0.27e,Rev $2.1B v $1.89Be
- NXP Semiconductors [NXPI]: Qualcomm said to be working on deal price for NXP, said to be in low $120/shr – CNBC
- Johnson & Johnson [JNJ]: Said to be exploring the sale of $2B product sterilization unit - press
Looking Ahead: Wal-Mart due to report earnings during NY morning
Europe
- (UK) PM May said to have a contingency plan to withhold payments of the £40B Brexit bill if EU leaders backtrack on their post-Brexit free trade deal commitments - financial press
- (UK) According to letter seen last week, Netherlands government to ‘activate hard Brexit’ plan amid lack of clarity from the UK –Sky News
- (UK) BOE Gov Carney: Brexit is what moves the GBP, not speculation about any future trade deal with the US; Bitcoin has pretty much failed as a store of value or medium of exchange
Looking Ahead: Germany Feb ZEW data due for release
***Levels as of 01:00ET***
- Nikkei225 -1.0%, Hang Seng -0.4%; Shanghai Composite closed for holiday; ASX200 -0.0%, Kospi -1.2%
- Equity Futures: S&P500 -0.3%; Nasdaq100 -0.1%, Dax -0.1%; FTSE100 +0.0%
- EUR 1.2412-1.2379; JPY106.86-106.56; AUD 0.7933-0.7889;NZD 0.7374-0.7348
- Apr Gold -0.9% at $1,343/oz; Apr Crude Oil +1.1% at $62.20/brl; Mar Copper -0.5% at $3.19/lb
Asia Market Update: Japan records first trade deficit in 8-months; China threatens retaliation if US implements increased tariffs
***Headlines/Economic Data***
General Trend:
- Equities markets higher with China markets closed for holiday,US and Canada also closed for Monday session
- Overall news light with, China, US and Canada closed for Mondayholiday
- A$ is the outperformer rising as high as 0.7935, overall USDslightly weaker across the region
-Strong yen weighing on manufacturers and exporters confidence
Japan
-Nikkei 225 opened +0.8%; closed +2%
- (JP) JapanJan Trade Balance: -¥943.4B v -¥1.02Te (1st deficit in 8-months);Adj Trade Balance: ¥373.3B v ¥144Be; Exports y/y: 12.2% v9.4%e, Imports y/y: 7.9% v 7.8%e; Exports to Asia +16%; China +30.8%; US +1.2%,EU+20.3%
- (JP)Poll of analysts say a stronger yen may cause adelay in BOJ tapering of ultra easy policy - financial press
Korea
-Kospi opened +1.3%
- (KR) Bank of Korea (BoK)sells KRW410B in 6-month monetary stabilization bonds (MSB) at 1.63%
- (KR) Bank of Korea(BoK) sells KRW1.0T vs. KRW1.0T indicated in 3-month monetary stabilizationbonds (MSB); Yield: 1.58% v 1.50% prior
- (KR) Accumulated commission-related sales ofsome 30 cryptocurrency exchange operators in South Korea are thought to havereached KRW700B at the end of 2017 v KRW8B in 2016 - Korean press
China/HongKong
-Hang Seng closed for holiday; Shanghai Composite closed for holiday
- (CN) ChinaCommerce Ministry official Wang Hejun: if the final decision [about USrestrictions on steel and aluminum imports] hurts China’s interests, we willcertainly take necessary measures to protect our legitimate rights
- (CN) China reiterates non-first-use on nuclearweapons
- (CN) China Jan bond issuance totaled CNY2.5T(CNY2.4T through inter-bank, CNY190B through Treasury issuance) - Xinhua
Australia/NewZealand
-ASX 200 opened -0.1%; closed +0.7%
- (NZ) New Zealand JanPerformance of Service Index: 55.8 V 56.0 prior
-Brambles(-3% ), BXB.AU Reports H1 (A$) Underlying Net 493.7M* v 295M y/y; Rev 2.75B v 2.52B y/y
-(NZ) New Zealand expecting 'a lot of disruption' from Cyclone Gita
- GWA Group (+12.5%), GWA.AU Reports H1 (A$) Net 27.7M v 27Me; EBIT 41.8M v 41Me; Rev 227.1M v 221Me;To divest Door & Access Systems business unit
-(AU) Australia in talks about a project to counter China’s Belt and Roadprogram – AFR
LookingAhead: Tomorrow NZ PPI and RBA meeting minutes, miner BHP reports H1 results
Other Asia
-Noble Group, NOBL.SG Updates on proposed financial restructuring: Entered ad hoc agreement withING for $700M facility; confident it can continue as a going concern; Guides Q4 net loss $1.93-1.73B
North America
- DIS “Black Panther” top film at the box office over the weekend with $192.0Min North American sales
-On Friday. US CommerceDepartment has recommended that President Donald Trump impose steep curbs onsteel and aluminum imports from China andother countries ranging from global and country-specific tariffs to broadimport quotas
- NXPI Qualcomm said to be working on deal price for NXP, said to be in low$120/shr - CNBC
Europe
- (UK) UKIP leader Boltonremoved by party members after less than five months in charge followingcriticism of his leadership and a scandal about racist comments made by hislover - press
-(UK) Feb Rightmove House Prices m/m: 0.8% v 0.7% prior; y/y: 1.5% v 1.1% prior
-(EU) IMF's Lagarde: Have no objection to plans to turn the euro zone’s bailoutfund into a European Monetary Fund – Swiss press
-(UK) PM May rules out second vote on membership in EU, no going back on theJune 2016 vote - press
***Levels as of01:00ET***
- Nikkei225 +2%, Hang Seng closed; ShanghaiComposite closed; ASX200 +0.7%, Kospi +0.6%
-Equity Futures: S&P500 +0.4%; Nasdaq100 +0.4%, Dax +0.4%; FTSE100 +0.8%
- EUR 1.2435-1.2399; JPY104.44-106.09; AUD 0.7935-0.7900;NZD 0.7409-0.7377
- Apr Gold -0.5% at $1,350/oz; Apr Crude Oil +1.2%at $62.30/brl;Mar Copper -0.2% at $3.23/lb