Asian equities positive despite US Friday rally petering out

Asia market update: Asian equities positive despite US Friday rally petering out; CN data dump beats ests as CN plans to boost consumption; Focus on US Feb Retail Sales.

General trend

- Positive start to the week for Asian equities (Kospi outperforming +2.1%), even with US equity futures failing to follow on from their Friday rally, assisted by late Friday’s stopgap govt funding bill passing in the Senate keeping the US govt funded for 6 months.

- China State Council late Sunday announced a series of measures under a 'Special Action Plan',
designed to boost domestic consumption in China. Press conference to come at 3pm local time today (7am GMT).

- China’s first ‘data dump’ for 2025 (Jan-Feb combined in one release, as per usual) was on-balance positive. Industrial production, retail sales and fixed asset investment were higher than expected. Hang Seng +1.2% and Shanghai +0.2%. However, China Home prices continued to fall, and at a faster pace.

- Over the weekend Pres Trump ordered US military to launch 'decisive and powerful' military action against Houthis in Yemen and warned Iran to end support for Houthis “immediately”.

- Japanese JGB yields keep reaching for 17-19 year highs.

- New Zealand NZIER economists’ survey showed a downward revision to the near-term growth outlook.

- Tier 1 banking analyst in Japan said that JGBs have been supported amid talk that the ‘reflationist’ (dovish) Takaichi may replace PM Ishiba. [Recall last September during the LDP leadership race runoff between Takaichi and Ishiba at one point saw JPY currency (Yen) weaken as it looked as though Takaichi may have been winning. In early Sept 2024 Takaichi had commented that “Cannot say Japan has stably achieved BOJ's 2% inflation target".

- The private company that owns Forever21 stores in the US filed for Ch 11, the CFO citing the De Minimis Exemption allowing foreign companies to undercut on pricing.

- US equity FUTs -0.5% during Asian trading.

Looking ahead (Asian time zone)

- Mon Mar 17th (Mon night US Feb Retail Sales).

- Tue Mar 18th (Tue night US Feb Housing Starts).

- Wed Mar 19th NZ Q4 Current Account, JP Feb Trade Balance, ID Rate Decision, JP BOJ Rate Decision, (Wed night US FOMC Rate Decision).

- Thu Mar 20th NZ Q4 GDP, AU Feb Jobs, CN LPR, (Thu eve UK BOE Rate Decision, Thu night US Feb Home Sales).

- Fri Mar 21st JP Feb CPI, TW CBC Rate Decision.

Holidays in Asia this week

- Thu Mar 20th Japan

Headlines/economic data

Australia/New Zealand

- ASX 200 opens flat at 7,797.

- Australia Treasurer Chalmers: Cyclone Alfred will cost the budget A$1.2B.

- RBA: Renews bilateral FX swap with the BOJ: allows for the exchange of local currencies between the two central banks of up to A$20B or JPY 1.6T.

- New Zealand Feb Performance Services Index: 49.1 v 50.4 prior [falls back into contraction].

- New Zealand Feb REINZ House Sales Y/Y: +3.4% v +17.5% prior.

- NZIER: NZ quarterly economists survey cuts 2025-26 growth forecast to 2.1% - financial press.

China/Hong Kong

- Hang Seng opens +1.1% at 24,226; Shanghai Composite opens +0.3% at 3.430.

- China Feb YTD industrial production Y/Y: 5.9% V 5.3%E.

- China Feb YTD Retail Sales Y/Y: 4.0% V 3.8%E.

- China Feb YTD fixed urban assets Y/Y: 4.1% V 3.2%E.

- China Feb New Home Prices M/M: -0.1% v -0.1% prior.

- China Feb Surveyed Jobless Rate: 5.4% v 5.1%.

- ANZ raises China 2025 GDP growth forecast from 4.3% to 4.8% - Press.

- China NBS Official: Reiterates domestic demand is insufficient, vows to expand domestic demand and deepen reform- comments on Jan-Feb data.

- China Vice Premier He Lifeng meets former US Treasury Sec Paulson on Sunday in Beijing; topics discussed included China-US economic and trade relations – Xinhua.

- China NDRC says to encourage foreign investment in technology and manufacturing.

- China State Council: Releases 'Special Action Plan' to boost domestic consumption - US financial press (update).

- Global CEOs incl Qualcomm and Saudi Aramco CEOs to meet China's Pres Xi in Beijing next week - financial press.

- China PBOC sets Yuan reference rate: 7.1688 v 7.1738 prior.

- China PBOC Open Market Operation (OMO): Injects CNY481B in 7-day reverse repos; Net injects CNY384.5B v drains CNY4.3B prior.

Japan

- Nikkei 225 opens +1.1% at 37,453.

- Japan PM Ishiba: Reiterates 'in no way' are we manipulating FX - Japanese press.

- Japan 30-year JGB yield rises to 2.62% [highest since Jul 2006].

- Japan 40-year JGB yield rises to 3%, highest since debut in 2007.

- Nikkei: BOJ tightening campaign gets "help" from Trump and unions.

- Palantir CEO: Japan should build defense targeting system with the US – Nikkei.

- Bank of Japan (BOJ) announcement related to outright bond buying operations: Unchanged.

Korea

- Kospi opens +0.9% at 2,588.

- South Korea Jan M2 Money Supply M/M: 0.5% v 0.9% prior.

- South Korea: Acting President Choi calls to suppress negative impact in science technology and energy cooperation with the US after [US] Department of Energy designation as 'sensitive' country.

- Bank of Korea (BOK) said to reject Bitcoin as FX reserve - Press (update).

Other Asia

- Indonesia Feb Trade Balance: $3.1B v $2.4Be; Exports Y/Y: 14.1% v 7.6%e.

- Singapore Feb Non-oil Domestic Exports M/M: +2.6%; Y/Y: 7.6% v 9.7%e.

North America

- (US) President Trump: Pres Biden's J6 Select Committee pardons, and 'many others' are hereby declared void, vacant and of no further force of effect - Truth Social post.

- (US) President Trump: Confirms will be speaking with Russia's Pres Putin on Tues - financial press.

- (US) Stopgap govt funding bill passed in the Senate, keeping the govt funded for 6 months through Sept 30th, which is the end of the current FY [weekend update].

- (US) Trump orders US military to launch 'decisive and powerful' military action against Houthis in Yemen: Tells Iran to end support for Houthis immediately; Pentagon says US strikes against Houthis will last days or weeks [weekend update].

- (US) Reportedly Trump Admin considering a new travel ban that would impact 43 countries – NYT [weekend update].

- (US) Trump: Mexico and Canada tariffs will remain in place until the flow of illegal drugs stops [weekend update].

- *(US) Mar preliminary university of Michigan confidence: 57.9 V 63.0E; Inflation expectations surge; 1-year inflation expectations 4.9% v 4.3%e (highest since Nov 2022) [weekend update].

Europe

- (UK) Mar Rightmove House Prices M/M: 1.1% v 0.5% prior; Y/Y: 1.0% v 1.4% prior.

- (UR) Russian Foreign Ministry: Russia opposes Any troops in Ukraine, not just NATO troops - financial press.

- (UR) UK PM Starmer: NATO and EU leaders underlined our unwavering commitment to stand shoulder-to-shoulder with Ukraine; Any ceasefire must have strong monitoring arrangements; Ball is now in Putin's court [weekend update].

- (DE) Germany Supreme Court rules parliament can move forward with Tuesday vote on debt brake [weekend update].

- (UR) Pres Zelenskiy: Russia deliberately setting conditions for ceasefire to complicate and drag out process [weekend update].

Levels as of 00:20 ET

- Nikkei 225 +1.2%, ASX 200 +0.8%, Hang Seng +1.1%; Shanghai Composite +0.2%; Kospi +2.1%.

- Equity S&P500 Futures -0.5%; Nasdaq100 -0.6%; Dax +0.4%; FTSE100 +0.1%.

- EUR 1.0874-1.0894; JPY 148.46-149.07; AUD 0.6321-0.6339; NZD 0.5744-0.5763.

- Gold -0.3% at $2,992/oz; Crude Oil +0.8% at $67.41/brl; Copper -0.3 at $4.8820/lb.