RBA maintains easing bias but with a move upbeat view of economy

Economic Data

- (JP) JAPAN NOV MONETARY BASE Y/Y: 28.9% v 29.5% PRIOR; MONETARY BASE END OF PERIOD: ¥358.8T v ¥356.1T PRIOR

- (KR) SOUTH KOREA JAN CPI M/M: 0.0% V 0.4%E; Y/Y: 0.8% V 1.1%E; CPI CORE Y/Y: 1.7% V 1.8%E

- (NZ) NEW ZEALAND JAN ANZ COMMODITY PRICE M/M: -2.3% V -1.8% PRIOR (3rd consecutive decline)

- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 111.2 v 112.2 prior

Index Snapshot (as of 04:30 GMT)

- Nikkei225 -0.6%, S&P/ASX -0.9%, Kospi -0.7%, Shanghai Composite +2.4%, Hang Seng -0.8%, Mar S&P500 -0.6% at 1,920

Commodities/Fixed Income

- Apr gold -0.2% at $1,125/oz, Mar crude oil -2.3% at $30.90/brl, Mar copper -0.1% at $2.05/lb

- GLD: SPDR Gold Trust ETF daily holdings rise 12.2 tonnes to 681.4 tonnes; biggest increase since Dec 18th; highest since Nov 3rd

- (CN) PBOC SETS YUAN MID POINT AT 6.5510 V 6.5539 PRIOR; strongest Yuan setting since Jan 6th, 17th straight firmer setting relative to Close

- (CN) PBoC to inject CNY50B in 14-day reverse repos and CNY50B in 28-day reverse repos

- JGB: (JP) Japan MoF sells ¥2.20T in 10-yr 1.3% JGBs; Avg yield: 0.078% v 0.254% prior; bid to cover: 3.14x v 3.25x prior

- (KR) South Korea Finance Ministry sells 30-yr bonds at 2.065%

- (NZ) New Zealand sells NZ$100M in 6-month bills; avg yield 2.4067%

Market Focal Points/FX

- Asian equity markets are mixed as modest losses in Japan, Australia, and Korea paled relative to Shanghai Composite jump of over 2%. Liquidity injection by the PBoC and also resumed weaker Yuan settings are lifting the mainland in the final week of trade before the week-long Lunar New Year break. PBoC's open market operations shifted to 14-day and 28-day reverse repos, and the offering yield on the former was set lower by 30bps at 2.40%. Risk aversion is prevailing elsewhere however, with S&P's down 11pts or 0.6% at 1,920. In FX, USD/JPY was down over 60pips below 120.40, AUD/USD pared post-RBA gain to fall 60pips from the highs below 0.7070, and NZD/USD is down 40pips below 0.6520.

- Reserve Bank of Australia left rates on hold at 2.00% as widely expected, noting reasonable prospects for continued growth in the economy, with inflation close to target. RBA retained its view that "low inflation may provide scope for easier policy" but was also more upbeat on domestic economy, "stating expansion in the non-mining parts of the economy strengthened during 2015." RBA also pointed to pace of business lending and improving employment, while writing off soft inflation to low energy prices. AUD/USD initially rose 20pips above 0.7120 after the RBA decision, but then sold off to 0.7070s in afternoon trade.

- Among notable speakers, China Stats Bureau official attributed overnight decline in PMIs to 3 1/2 lows to soft demand ahead of the holidays, stating "some factories have taken the initiative of reducing production to respond to the countrys campaign to resolve excessive capacity and accelerate economic restructuring." Separately, a researcher with CASS warned the pressure from Yuan depreciation may lead to decline in China property market, with most impact in lower tier cities. In Japan, Econ Min Ishihara said monetary policy is BOJ's responsibility and also signaled comfort with lower long-term rates as they boost capex and housing. Ishihara said he would monitor the impact on banks, just as several regional smaller financials announced plans to cut deposit rates in response to income lost from negative rates on reserves with BOJ.

Equities

US equities/ADRs:

- LOJN: To be acquired by CalAmp at $6.45/shr in cash; valued at $134M; CAMP sees accretion in first 12 months; +18.3% afterhours

- PVH: Guides FY15 at or above high end of prior guidance at 7.00 v $6.93e ($6.90-7.00 prior); +6.4% afterhours

- MAT: Reports Q4 $0.63 v $0.60e, R$2.00B v $1.92Be; +5.8% afterhours

- GOOGL: Reports Q4 $8.67 v $8.17e, R$17.3B v $16.9Be; +4.2% afterhours

- APC: Reports Q4 -$0.57 (adj) v -$1.05e, R$2.05B v $1.97Be; To reduce CapEx by nearly 50%; +2.8% afterhours

- AFL: Reports Q4 $1.56 v $1.48e, R$5.3B v $5.24Be; +1.5% afterhours

- TSO: Reports Q4 $1.83 adj v $2.07e, R$6.27B v $8.44B y/y; -2.0% afterhours

- RCII: Reports Q4 $0.54 v $0.56e, R$794M v $812Me; cuts dividend by 67% to $0.08 from $0.24 (2.4% implied yield); -11.9% afterhours

- IDTI: Reports Q3 $0.35 v $0.35e, R$178M v $178Me; -14.7% afterhours

Notable movers by sector:

- Consumer discretionary: Navitas NVT.AU +4.7% (H1 result); Ricoh Co 7752.JP +1.4% (9-month result)

- Consumer staples: NH Foods 2282.JP +6.0% (9-month result)

- Financials: Evergrande Real Estate Group 3333.HK +1.0% (Jan result); China Minsheng Banking Corp 1988.HK -1.5% (update on Ag Bank notes case); Bank of Yokohama 8332.JP -0.6%, Resona Holdings 8308.JP -2.9% (cut deposit rates); Mitsubishi UFJ Financial Group 8306.JP +1.9% (9-month result)

- Industrials: China Railway Group 601390.CN +4.1%(agreement); Samsung Heavy Industries 010140.KR -1.9% (FY15 result); Hyundai Motor Co 005380.KR -1.5% (Jan result); Toyota Motor Corp 7203.JP -0.6% (may cut production)

- Technology: Altium ALU.AU +11.6% (partnership); MediaTek 2454.TW -0.5% (Q4 result, guidance)

- Materials: Mitsubishi Corp 8058.JP -1.2% (9-month result)

- Telecom: SK Telecom 017670.KR -0.7% (Q4 result)

- Utilities: Mitsubishi Electric Corp 6503.JP +3.7% (9-month result)