Asian currencies trade broadly lower as yuan weakens
|Asia Market Update: Concerns about spread of Chinese virus continue to weigh on Asian tourism-related companies, global equity futures decline led by Hang Seng Futures; Asian currencies trade broadly lower as yuan weakens.
General Trend:
- Equity markets in Hong Kong and Shanghai underperform amid concerns about coronavirus spread on the upcoming Lunar New Year Holiday
- Gaming firms, airlines, financials and property companies weigh on the Hang Seng; Telecoms drop after gains on Monday
- L’Occitane expected to release Q3 trading statement later today
- Property, Consumer and Financial firms are among the biggest decliners in Shanghai, healthcare index rises over 1%
- Chinese electric vehicle maker BYD declines over 3% after recent gains, Aussie lithium-related companies also trade generally lower; Chinese official commented on NEV subsidies on Monday
- Energy and Resource companies are among the decliners in Australia
- BHP declines less than 1% after quarterly production update and FY guidance, noted energy coal production was impacted by bushfires in Australia
- Japanese equities decline amid the rise in the Yen, sectors moving lower include Marine/Transportation and Iron/Steel
- Tokyo Steel is expected to report its earnings after the market close
- Bank of Japan (BOJ) raised its growth forecasts (as speculated), noted overseas downside risks have decreased somewhat
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -0.1%
- BHP.AU Reports Q2 Waio iron ore production: 68.0Mt v 66Mt y/y, attributable iron ore production 60.4Mt v 57.8Mt y/y; Affirms all FY20 guidance
- (NZ) New Zealand Dec Performance of Services Index: 51.9 v 52.9 prior (lowest reading since Sept 2012)
- (AU) Australia Treasurer Frydenberg: Will not provide running commentary on budget
Japan
- Nikkei 225 opened 0.0%
- 6104.JP Murakami Fund offers ¥3,456/share in tender offer for 44% stake - Japanese press
- (JP) BANK OF JAPAN (BOJ) LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%; AS EXPECTED
- (JP) Bank of Japan (BOJ) Quarterly Outlook for Economic Activity and Prices: Maintains assessment of economy, cuts all CPI outlooks, raises all GDP outlooks
Korea
- Kospi opened -0.1%
- (KR) South Korea Dec PPI Y/Y: 0.7% v -0.1% prior (biggest jump since Dec 2018)
- (KR) South Korea Jan 20-day Exports y/y: -0.2% v -2.0% prior; Imports y/y: +3.0% v -16.7% prior; Chip Exports y/y: +8.7% v -16.7% prior
- 005930.KR South Korea Exchange considering Samsung stock weighting cap in Feb - Korean press
China/Hong Kong
- Hang Seng opened -1.2%; Shanghai Composite opened -0.3%
- (CN) Former PBOC Dep Gov Min Zhu said China is 'well placed' for growth in 2020, reiterates 'very reasonable' for China GDP to grow at 6% per year - financial press update
- (CN) China PBOC sets Yuan Reference Rate: 6.8606 v 6.8664 prior (strongest fix since July 1, 2019)
- (CN) China PBoC Open Market Operation (OMO): Injects CNY100B via 14-day reverse repos v injects CNY250B in 14-day prior; Net injection CNY100B v injects CNY250B prior
- SNP Reports FY19 Crude production 284.22Mboe, -1.5% y/y; Natural gas production 1,047.8bcf, +7.2% y/y
- (HK) Moody's cuts Hong Kong sovereign rating one notch from Aa2 to Aa3; Outlook to stable
- (CN) China 2019 Foreign Direct Investment (FDI) Yuan Terms: CNY941.5B, +5.8% y/y
- (CN) China Ministry of Commerce (MOFCOM): China welcomes high quality competitive US goods; hope US creates favorable conditions for exports; will increase imports from US based on market demand and WTO rules
North America
- (US) President Trump and France President Macron said to have agreed to continue discussions regrading digital tax through the remainder of 2020
Europe
- BA Reportedly in discussions with banks for up to $10B+ in new borrowings – CNBC
- (NO) Norway Finance Min Jensen and her Progress Party to resign from government - financial press
Levels as of 12:15ET
- Hang Seng -2.3%; Shanghai Composite -1.2%; Kospi -0.9%; Nikkei225 -0.9%; ASX 200 -0.2%
- Equity Futures: S&P500 -0.4%; Nasdaq100 -0.5%, Dax -0.5%; FTSE100 -0.5%
- EUR 1.1099-1.1088; JPY 110.22-109.90; AUD 0.6881-0.6853; NZD 0.6613-0.6595
- Commodity Futures: Gold +0.4% at $1,566/oz; Crude Oil -0.3% at $58.39/brl; Copper -1.3% at $2.81/lb
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