Aussie yields rise after comments by former RBA official, UST yields rise

Asia Market Update: Mixed equities session in Asia, CN markets lag; Aussie yields rise after comments by former RBA official; UST yields rise.

General trend

- Japan reported an unadjusted Current Account deficit for the first time in years.

- Japanese REIT said to cancel Yen-denominated debt sale amid higher yields.

- US equity FUTS trade slightly higher.

- Nikkei 225 has pared gain;Topix Iron & Steel index outperforms [There was renewed reporting that the US/Japan reached an agreement related to steel tariffs; Kobe Steel and JFE are due to report earnings].

- Japanese companies due to report earnings include Softbank Group, Sharp, Kobe Steel, JFE Holdings, AGC, Idemitsu, Tokai Carbon, Sumitomo Metal Mining, Shimano, Kansai Paint.

- Toyota is due to report on Wed.

- Shanghai Composite declined by >1% during the morning session [IT and Consumer indices lag].

- Hang Seng underperforms and drops by >1.5% [US restrictions weigh on WuXi Biologics and the Healthcare Index].

- S&P ASX 200 outperforms on Resources index; REITS supported by corporate earnings [SCA Property]; Financials rise on Macquarie and Suncorp.

- South Korea bank earnings in focus.

- Companies due to report during the NY morning include AGCO, Aramark, Avient, Bombardier, Carrier Global, Centene, Coty, DuPont, Fiserv, Harley-Davidson, Gartmer, Jacobs Engineering, KKR, Lear Corp, Masco, Malibu Boats, Pfizer, S&P Global, Sysco, Taylor Morrison, Thomson Reuters, Virtu Financial, Warner Music Group, Weight Watchers.

Headlines/Economic data

Australia/New Zealand

- ASX 200 opened +0.4%.

- SUN.AU Reports H1 (A$) Cash earnings 361M v 509M y/y; Rev 7.2B v 7.4B y/y.

- MQG.AU Gives 9M trading update: Macquarie Asset Management net profit contribution higher y/y, AUM A$750.1B, +2% q/q.

- (AU) Australia sells A$150M v A$150M indicated in 1.25% Aug 2040 Indexed Bonds; Avg Yield: 0.2498%; bid-to-cover 5.09x.

- (AU) Australia Jan NAB Business Confidence: +3 v -12 prior; Conditions: 3 v 8 v prior.

- (AU) Former Reserve Bank of Australia (RBA) Edwards: The RBA could increase rates 4x in quick succession in late 2022 due to upward trajectory on economy – press.

- (NZ) Reserve Bank of New Zealand (RBNZ) Gov Orr: Bank is commencing Central Bank Digital Currency (CBDC) proof-of-concept design work.

Japan

- Nikkei 225 opened +0.3%.

- 9984.JP Speculated to sell ARM via IPO after $66B sale to NVIDIA collapses due to regulatory concerns, would receive breakup fee of $1.25B [in line] - FT.

- 2579.JP To raise wholesale prices of 1.5l and 2l PET bottle products for mass merchandisers and online sellers, effective May 1st; Prices of products including Coca-Cola, Fanta and Aya Taka to increase 5-8%.

- (JP) Japan Dec Labor Cash Earnings Y/Y: -0.2% v 0.9%e; Real Cash Earnings Y/Y: -2.2% v -0.8%e.

- (JP) Japan Dec BoP Current Account: -¥370.8B v +¥106.4Be (1st deficit in 8 years); Adj Current Account: ¥787.5B v ¥1.12Te; Japanese funds sold most US and French sovereign bonds since May 2020 in December.

- (JP) Japan Chief Cabinet Matsuno: Will consider additional steps on increasing gasoline prices in Japan; Seeks complete resolution on US Tariffs.

- (JP) Japan Trade Min Hagiuda: Japan isn’t currently considering raising the subsidy limit for oil refiners, even as global crude prices keep rising.

- (JP) Japan MoF sells ¥200B v ¥200B indicated in 10-year 0.005% inflation-indexed bonds; yield at lowest accepted -0.388% v -0.357% prior; bid to cover 4.20x v 3.31x prior.

Korea

- Kospi opened +0.8%.

- (KR) Reportedly North Korea convenes a key Parliamentary meeting without Leader Kim present – Yonhap.

- (KR) North Korea denies allegations it carried out a series of cryptocurrency thefts and cyberattacks on other countries - Yonhap.

- 373220.KR Reports FY21 (KRW) Op +768B v -289B y/y, Rev 17.9T v 12.6T y/y.

- (KR) South Korea and UK to start talks on revising Free Trade Agreement (FTA) - Yonhap.

China/Hong Kong

- Hang Seng opened -0.1%; Shanghai Composite opened 0.0%.

- (HK) Hong Kong Jan PMI (Whole Economy): 48.9 v 50.8 prior (1st contraction in 13 months).

- (CN) CHINA JAN FOREIGN RESERVES: $3.222T V $3.254TE (yesterday late session).

- (CN) China Q1 GDP growth seen at ~5.5%, cites analysts [vs 4.0% in Q4 2021] - Chinese press.

- (CN) China PBOC sets Yuan reference rate: 6.3569 v 6.3580 prior.

- (CN) China PBOC Open Market Operation (OMO): Sells CNY20B in 7-day reverse repos v CNY20B prior; Net drain CNY130B v Net drain CNY130B prior.

- (CN) China State Researcher Lou Hong: China should increase Sovereign Bond Supply as long as risks are controllable - Chinabond Magazine.

- (HK) Hong Kong Chief Exec Lam: Hong Kong will stick to its 'dynamic zero' coroanvirus policy; Will announce coronavirus measures later today (Feb 8th).

North America

- TSLA Said to cut one of the two electronic control units normally included in the steering system of some Model 3 and Model Y cars made in China to cope with chip shortages – press.

- VLDR Issues warrants to Amazon to acquire up to 39.5M shares – filing.

- (US) US Dept of Commerce added 33 parties based in China to its unverified list for receiving US exports (US session).

Europe

- (UK) Jan BRC Sales LFL Y/Y: 8.1% v 0.6% prior.

Levels as of 00:15ET

- Hang Seng -1.7%; Shanghai Composite -0.4%; Kospi -0.1%; Nikkei225 +0.2%; ASX 200 +1.1%.

- Equity Futures: S&P500 +0.0%; Nasdaq100 +0.1%, Dax -0.1%; FTSE100 +0.1%.

- EUR 1.1449-1.1420; JPY 115.49-115.06; AUD 0.7139-0.7107; NZD 0.6654-0.6632.

- Commodity Futures: Gold -0.1% at $1,819/oz; Crude Oil -0.2% at $90.92/brl; Copper -0.6% at $4.46/lb.