WTI crude Oil spikes by $3 to $52/brl

Asian Mid-session Update: WTI crude Oil spikes by $3 to $52/brl as Saudis lead a 10-nation coalition in air stikes on Yemen's Houthis

Economic Data

- (KR) SOUTH KOREA MAR CONSUMER CONFIDENCE: 101 V 103.0 PRIOR

Index Snapshot (as of 02:30 GMT)

- Nikkei225 -1.6%, S&P/ASX -1.0%, Kospi -0.4%, Shanghai Composite -0.1%, Hang Seng +0.2%, Jun S&P500 -0.1% at 2,053

Commodities/Fixed Income

- Apr gold +0.4% at $1,199/oz, May crude oil +4.9% at $51.40/brl, May copper +0.3% at $2.80/lb

- GLD: SPDR Gold Trust ETF daily holdings fall 1.2 tonnes to 743.2 tonnes; Lowest since Jan 24th

- FCG.NZ: To increase offer volumes at GDT auctions due to higher milk supply

- JGB: (JP) Japan MoF sells ¥2.32T in 0.1% 2-yr notes, Avg Yield: 0.030% v 0.027% prior; bid to cover: 4.80x v 4.39x prior

- (CN) PBoC to inject CNY25B in 7-day reverse repos (9th consecutive injection); Injects net CNY10B this week v drained CNY25B prior (1st injection after 4 weeks of drain)

- USD/CNY: PBoC sets yuan mid point at 6.1375 v 6.1410 prior setting (strongest yuan setting since Feb 17th)

- (JP) Japan investors bought net ¥765.5B in foreign bonds v bought ¥551.0B in prior week; Foreign investors sold net ¥352.8B in Japan stocks v bought ¥244.3B in prior week

Market Focal Points/FX

- Major indices in Asia are mixed despite the outsized decline on Wall St, where disappointing drop in core durable goods sent Dow and S&P by 1.5% and the yield on the 10-year back toward 1.9%. Risk-off bias was felt somewhat more acutely in the FX space, with USD/JPY fell about 30pips from the highs below 119.30, while AUD/USD and NZD/USD were down about 40pips below 0.7810 and 0.7570 respectively. EUR/USD has consolidated some of its recent corrective gains, remaining contained below $1.10 handle in a thin 25pip range.

- Economic calendar was rather sparse, and much of the focus fell on sharp escalation of geopolitical tensions in Yemen. Following overnight reports that Saudi Arabia is mobilizing artillery on the border and earlier rumors that Yemeni President has fled the country by boat from Aden, Saudi Arabia led an air assault on positions of Houthi rebels. There is no indication yet that ground troops will participate in the offensive, though Saudi Arabia has also reportedly allocated up to 100K troops for Yemen operations. A statement from the White House indicated the US will authorize logistical and intelligence support to Saudi-led military operations but will not be taking any direct military action. There was no word out of Tehran, where Iran's Shia govt is widely suspected of financing the Houthi militants. WTI May crude oil contract spiked up about $3 toward $52/brl on reports of air strikes before retreating below $51. Brent also rose over $3 above $59.50 before coming off to $58. CAD also tracked higher oil, with USD/CAD falling some 50pips below 1.2480.

- Greece debt problems also remain pressing after EFSF officials announced the EFSF fund will not return €1.2B in contributions that Athens claims it overpayed. Bank of Greece Gov Stournaras sought to soothe tensions, noting 2015 growth will be higher than in 2014, and the economy is recovering. Stournaras noted the uncertainty related to the bailout is weighing on outlook, and as soon as it is resolved, recovery will gather speed.

- In China, comments out of the PBoC reiterated intentions to keep monetary policy "prudent", aiming to prevent and resolve any potential financial risks. Note that for the week, PBOC operations resulted in a net injection of CNY10B - the first injection after 4 previous weeks of net drain.

Equities

US equities/ADRs:

- FIVE: Reports Q4 $0.61 v $0.60e, R$264M v $262Me; +6.8% afterhours

- RHT: Reports Q4 $0.43 v $0.41e, R$463.9M v $457Me; +5.1% afterhours

- PVH: Reports Q4 $1.76 v $1.72e, R$2.07B v $2.10Be; +1.2% afterhours

Notable movers by sector:

- Consumer Discretionary: Vocation Ltd VET.AU +10.1% (appoints CEO; provides update on debt)

- Consumer staples: Mengniu Dairy 2319.HK +7.1% (FY14 results); Henan Shuanghui Investment & Development 000895.CN +6.4% (FY14 results); Yashili International Holdings 1230.HK -3.2% (prelim FY14 results)

- Financials: Bank of Queensland BOQ.AU -2.1% (H1 results); C C Land Holdings 1224.HK +2.3% (FY14 results); New China Life 1336.HK -3.5% (FY14 results)

- Materials: Aluminum Corporation of China 601600.CN +1.3% (FY14 results)

- Technology: Obic Co 4684.JP -2.6% (press speculation on FY14/15 results); ZTE Corp 000063.CN -1.3% (FY14 results)

- Utilities: Energy Developments ENE.AU -2.3% (FY15 guidance)