Asian Market Update: Australia retail sales slow but RBA minutes still show a neutral stance; PBoC sets Yuan firmer heading into holidays


Economic Data

- (AU) AUSTRALIA DEC RETAIL SALES M/M: 0.0% (5-month low) V 0.4%E; Q4 Q/Q: 0.6% V 0.9%E

- (AU) AUSTRALIA JAN AIG PERFORMANCE OF CONSTRUCTION INDEX: 46.3 V 46.8 PRIOR; 2nd month of contraction

- (ID) INDONESIA Q4 GDP Q/Q: -1.8% V -1.9%E; Y/Y: 5.0% V 4.8%E

- (PH) PHILIPPINES JAN CPI M/M: 0.2% V 0.2% PRIOR; Y/Y: 1.3% V 1.4%E

- (TW) TAIWAN JAN CPI Y/Y: 0.8% V 0.8%E; WPI Y/Y: -4.8% V -5.1%E

- (JP) JAPAN JAN OFFICIAL RESERVE ASSETS: $1.25T v $1.23T PRIOR


Index Snapshot (as of 04:30 GMT)

- Nikkei225 -2.1%, S&P/ASX -0.2%, Kospi flat, Shanghai Composite -0.1%, Hang Seng +0.6%, Mar S&P500 -0.2% at 1,904


Commodities/Fixed Income

- Apr gold -0.1% at $1,156/oz, Mar crude oil +0.1% at $31.76/brl, Mar copper -0.8% at $2.11/lb

- GLD: SPDR Gold Trust ETF daily holdings rise 3.5 tonnes to 693.6 tonnes; highest since Oct 29th; 4th straight increase

- (CN) PBoC to inject CNY60B in 14-day reverse repos and CNY90B in 28-day reverse repos

- (AU) Australia MoF (AOFM) sells A$800M in 2.75% 2019 Bonds; avg yield: 1.9020%; bid-to-cover: 3.02x

- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.5314 V 6.5419 PRIOR; strongest setting since Jan 6th; 20th straight firmer setting relative to Close

- (JP) BOJ offers to buy ¥400B in 1-3yr JGBs, ¥420B in 3-5yr JGBs, ¥450B in 5-10yr JGBs


Market Focal Points/FX

- Asian equity markets are mixed and less volatile, tracking more subdued tone on Wall St heading into the non-farm payrolls. Nikkei225 is the big underperformer, as Econ Min Ishihara noted virtuous cycle is becoming effective in Japan economy while Fin Min Aso voiced support in negative rate policy of the BOJ despite JGB market turbulence. Aso added policy will be implemented so that the market can absorb JGB issuance.

- After a Fitch warning on China overnight that capital outflows and sharp declines in official foreign reserves continue to add to currency pressures, the PBoC did not live up to some expectations of another aggressive devaluation going into the holiday week. Instead, the central bank set Yuan higher - in fact the same level where it was before the Jan 6th mini-devaluation. PBoC also injected more another CNY150B in liquidity thru 7- and 14- day repos. Overnight, PBoC Gov Zhou also reiterated that China will maintain prudent monetary policy stance, while another researcher forecast Lunar New Year liquidity to be ample. Over the weekend, markets will look for another record high decline in FX reserves in January, with consensus of outflows just above $100B yet again. On the corporate front, China security firms saw some selling after their monthly reports due to diminished performance from volatility in the equity markets.

- Australia retail sales slowed to a 5-month low flat level, but AUD held up well due to concurrently released RBA policy meeting minutes. Gov Stevens acknowledged that low inflation could provide room for easier policy, but largely maintained the view of reasonable prospects for continued growth in economy along with expectations of employment rebound in non-mining sector. RBA said China poses key risk to Australia economy, though policymakers "still have scope to respond if the economy turns out to be much weaker than expected."

- In FX, USD/JPY was rangebound to 50pips below 117, AUD/USD fell 40pips to 0.7180 on retail sales but quickly bounced back above 0.72, and NZD/USD saw the most selling with a 60pip move lower below 0.6690.


Equities

US equities/ADRs:

- MFLX: Enters into definitive merger agreement to be acquired by Suzhou Dongshan Precision Manufacturing Co., Ltd. for $23.95/shr; +40.0% afterhours

- UBNT: Reports Q2 $0.58 v $0.51e, R$161.9M v $155Me; +20.1% afterhours

- SYMC: Reports Q3 $0.26 v $0.24e, R$909M v $906Me; Announces $500M Silver Lake investment; $400M cost savings program; +8.8% afterhours

- HIG: Reports Q4 $1.07 adj v $0.98e, total consolidated Rev $4.51B v $4.62B; +7.4% afterhours

- TEAM: Reports Q2 $0.11 adj v $0.04e, R$109.7M v $102Me; Guides Q3 $0.05-0.06 v $0.02e, R$113-115M v $106Me; -2.1% afterhours

- HBI Reports Q4 $0.44 v $0.46e, R$1.41B v $1.53Be; -9.5% afterhours

- DECK: Reports Q3 $4.78 v $4.70e, R$795.9M v $836Me; Announces office consolidation measures; -9.8% afterhours

- OUTR: Reports Q4 $1.00 v $0.67e, R$527M v $514Me; Guides initial FY16 $5.00-6.30 v $7.90e; -16.6% afterhours

- LNKD: Reports Q4 $0.94 v $0.79e, R$862M v $861Me; Guides initial FY16 $3.05-3.20 v $3.73e, Rev $3.60-3.65B v $3.92Be; -28.7% afterhours

- GIGA: Reports Q3 -$0.09 v $0.01 y/y, R$11.9M v $14.1M y/y; -28.6% afterhours

- DATA: Reports Q4 $0.33 v $0.16e, R$202.8M v $201Me; -35.8% afterhours

Notable movers by sector:

- Consumer discretionary: McDonald's Holdings Co Japan 2702.JP +0.5% (Jan result); Japan Tobacco Inc 2914.JP +0.9% (FY15 result); LG Corp 003550.KR -2.2% (Q4 result)

- Consumer staples: CJ CheilJedang Corp 097950.KR -7.0% (Q4 result)

- Financials: Haitong Securities 600837.CN -2.4% (Jan result); CITIC Securities 600030.CN -2.5% (Jan result); GF Securities Co 000776.CN -2.2% (Jan result); Huatai Securities Co Ltd 601688.CN -1.7% (Jan result); Future Land Development Holdings1030.HK -3.9% (FY15 result)

- Industrials: Isuzu Motors 7202.JP -1.8% (9-month result speculation); Mazda Motor Corp 7261.JP -6.3% (9-month result); Hyundai Heavy 009540.KR +3.4% (Q4 result); Ibiden 4062.JP -9.2% (9-month result)

- Technology: Sharp Corp 6753.JP +8.8% (Hon Hai to hold new conference about talks, 9-month result); Toshiba Corporation 6502.JP -12.5% (9-month result)

- Materials: Baoshan Iron & Steel Co 600019.CN +1.2%, Angang Steel 47.HK +1.0% (China to cut steel industry capacity); Itochu Corp 8001.JP +1.7% (impairment); Whitehaven Coal WHC.AU -5.6% (H1 result)

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