Asia trades generally higher after US gains; USD remains mostly firmer

Asia Market Update: Asia trades generally higher after US gains; USD remains mostly firmer; US jobs data due later today; Biden expected to speak on stimulus.

General Trend

- Following the mostly positive open, Asian indices have remained generally higher; Nikkei 225 is closer to session highs, Hang Seng has pared gains; ASX 200 closed near session highs

- Financials trade broadly higher after the recent rise in longer-term gov’t bond yields

- SMIC declines over 6% in HK, Q4 gross margin dropped

- Kuaishou Technology rises over 190% during first day of trading in HK

- Mazda rises over 18% amid raised outlook

- Japan companies expected to report earnings include Nippon Steel, Kobe Steel, NTT, Suzuki Motor, AGC, Mitsui Fudosan

Headlines/Economic Data

Australia/New Zealand

-ASX 200 opened flat

-(AU) Reserve Bank of Australia (RBA) Gov Lowe: Will consider extending TFF if conditions in economy worsen; Long Term bond yields lowered by ~30bps due to bond purchases; No sense of currency war or manipulation happening; Possible to do better than upside scenario, then we could increase interest rates; RBA has not ruled out additional bond purchases after current program; RBA has no appetite for bank or corporate bonds

-*(AU) RESERVE BANK OF AUSTRALIA (RBA) STATEMENT ON MONETARY POLICY (SOMP): Raises trimmed mean inflation forecast for Dec 2021, cut Dec 2021 GDP growth forecast (as expected)

-(AU) Australia Q4 Retail Sales Ex-Inflation Q/Q: 2.5% v 1.9%e

-(AU) Australia Dec Final Retail Sales M/M: -4.1% v -4.2% prelim

-(AU) Australia Jan AIG Performance of Service Index: 54.3 v 52.9 prior

-(AU) Australia sells A$1.0B v A$1.0B indicated in 0.50% Sept 2026 Bonds, avg yield 0.5434%, bid to cover 5.7x

China/Hong Kong

-Hang Seng opened +0.7%, Shanghai Composite +0.2%

- (US) Pres Biden: US is ready to work with China when its in America's interest to do so

- (US) National Sec Adviser Sullivan: priority is to make sure that we're dealing with China's trade abuses that are harming American jobs

- (CN) Xinhua: China says to retain benchmark deposit rate system for long-term, cites comments from the PBOC

-Ant Financial [6688.HK]: Ant Group said to have planned to spin off its consumer-credit data ops as part of effort to revive IPO; Sees IPO in two years – press

-(HK) China and Hong Kong to announce a Wealth Connect MOU as soon as Feb 5th (Friday) - Hong Kong Press

-Alibaba [9988.HK]: Prices $5.0B in USD bonds due 2031, 2041, 2051, and 2061

-(CN) China PBOC Open Market Operation (OMO): Injects CNY100B in 14-day reverse repos v CNY100B in 14-day reverse repos prior; Net CNY0B v Net CNY0B prior

-(CN) China PBOC sets Yuan reference rate: 6.4710 v 6.4605 prior

Japan

-Nikkei 225 opened +1%

-(JP) Japan Dec Household Spending M/M: +0.9% v -1.8% prior; Y/Y: -0.6% v 4.8%e

-(JP) Japan Jan FX Reserves $1.39T v $1.39T prior

- (JP) Japan Dec Preliminary Leading Index: 94.9 v 95.2e (first m/m decline in 7 months); Coincident Index: 87.8 v 87.8e

Korea

-Kospi opened +0.4%

-(KR) South Korea Dec Current Account: $11.5B v $9.2B prior; Balance of Goods (BOP): $10.5B v $10.0B prior

- (KR) South Korea Sells 50-year bonds: Avg yield 1.970% v 1.750% prior

Other Asia

- (IN) INDIA CENTRAL BANK (RBI) LEAVES REPURCHASE RATE UNCHANGED AT 4.00%; AS EXPECTED; Cash Reserve Ratio (CRR) to be restored to 3.5% in March and 4.0% in May [from 3.00%]

- (ID) Indonesia Q4 GDP Q/Q: -0.4% v -0.2%e; Y/Y: -2.2% v -2.3%e

- (PH) Philippines Central Bank (BSP) Gov Diokno: Inflation spike in temporary; No need for monetary response unless CPI remains elevated; no need for monetary response unless there are second round CPI [effects]; Will consider inflation at Feb 11th meeting

- (PH) Philippines Jan CPI Y/Y: 4.2% v 3.5%e; Core CPI Y/Y: 3.4% v 3.3% prior; Cites food and drink prices for higher CPI

- (SG) Singapore Dec Retail Sales M/M: -0.9% v -1.1%e; Y/Y: -3.6% v -2.2%e

- (TW) Taiwan Govt along with Taiwan Companies to help address shortage of Auto Chips - Press

North America

- (US) Pelosi, Hoyer and Committee Chairs to meet with President Biden on Friday at 9:45 AM EST - press

- (US) President Biden to speak on Stimulus at 11:45EST on Friday (Feb 5th)

- (US) Fed's George (Non-voter): Too soon to speculate on timing of adjusting bond purchases; Fed is far away from achieving objectives

- (US) Treasury spokesperson: regulators believe the core market infrastructure is 'resilient' amid volatility in certain stocks in the last few weeks

- Robinhood Markets: Says currently no temporary limits to increasing positions on stocks and options; there are no longer limits on GME and AMC

Levels as of 00:20 ET

- Nikkei 225, +1.3%, ASX 200 +1.1% , Hang Seng +0.3%; Shanghai Composite +0.3% ; Kospi +0.7%

- Equity S&P500 Futures: +0.2%; Nasdaq100 +0.3%, Dax +0.1%; FTSE100 -0.1%

- EUR 1.1972-1.1952 ; JPY 105.65-105.46 ; AUD 0.7610-0.7582 ;NZD 0.7166-0.7136

- Gold +0.3% at $1,796/oz; Crude Oil +0.8% at $56.68/brl; Copper +0.2% at $3.5577/lb