China property prices stabilize further; Aussie construction data unexpectedly declines

US Session Highlights

- (IR) Iran's Supreme Leader Ayatollah Ali Khamenei said to denounce the reconciliation plans with Israel and urge resistance to liberate the Palestinian territories

- OPEC Sec Gen Barkindo: Jan compliance was over 90%; looking to do better in coming months; compliance committee to meet on Wed, Feb 22nd; could issue statement afterwards

- (US) Fed's Kashkari: Fed has the unstated third mandate of financial stability; Difficult to see how the math would work on boosting US economic growth to 4%

- (US) FEB PRELIMINARY MARKIT MANUFACTURING PMI: 54.3 V 55.3E

- (US) Trump admin said to be readying executive action to lift coal mining ban on federal lands - press

 

US markets on close: Dow +0.6%, S&P500 +0.6%, Nasdaq +0.5%

- Best Sector in S&P500: Real Estate

- Worst Sector in S&P500: Materials

- Biggest gainers: SNI +7.2%, MDLZ +5.8%, FSLR +5.1%, SJM +4.4%, CNC +4.0%

- Biggest losers: FCX -5.2%, TSN -3.0%, GPC -3.0%, RRC -2.7%, VRTX -2.0%

- At the close: VIX 11.6 (+0.1pts); Treasuries: 2-yr 1.24% (+1bps), 10-yr 2.43% (flat), 30-yr 3.04% (+1bps)

 

US movers afterhours

- DEPO: Reports Q4 $0.48 v $0.32e, R$124M v $123Me; +6.5% afterhours

- XPO: Reports Q4 $0.24 v $0.20e, R$3.68B v $3.68Be; +3.7% afterhours

- RRGB Reports Q4 $0.35 v $0.29e, R$291.5M v $298Me; Guides initial FY17 EPS $2.70-3.00 v $2.96e; +3.2% afterhours

- AWK: Reports Q4 $0.57 v $0.56e, R$802M v $811Me; +1.8% afterhours

- FSLR: Reports Q4 $1.24 v $0.97e, R$480M v $392Me; +1.3% afterhours

- GBT: To sell $75M in common stock (7% of market cap); -9.7% afterhours

- FUEL: Reports Q4 -$0.09 adj v $0.10e, R$124.8M v $122Me (1 est); -9.8% afterhours

- TXRH: Reports Q4 $0.29 v $0.37e, R$484.7M v $497Me; raises dividend to $0.21 from $0.19 (implied 1.8% yield); -10.4% afterhours

- PKD: Offers 12M shares of Common Stock (9.5% of shares outstanding) and Series A Mandatory Convertible Preferred Stock; -12.8% afterhours

- SREV: Reports Q4 $0.02 v $0.03e, R$68.7M v $69.6Me; Guides Q1 R$55-58M v $62.5Me; -22.2% afterhours

 

Asia Key economic data:

- (CN) CHINA JAN PROPERTY PRICES M/M: RISE IN 45 OUT OF 70 CITIES VS 46 PRIOR; Y/Y: RISE IN 66 OUT OF 70 CITIES V 65 PRIOR

- (AU) AUSTRALIA Q4 CONSTRUCTION WORK DONE Q/Q: -0.2% V +0.5%E; 6th straight quarter of decline

- (AU) AUSTRALIA Q4 WAGE PRICE INDEX Q/Q: 0.5% V 0.5%E; Y/Y: 1.9% V 1.9%E

- (AU) AUSTRALIA JAN SKILLED VACANCIES M/M: 1.0% V 1.4% PRIOR

- (AU) AUSTRALIA JAN WESTPAC LEADING INDEX M/M: 0.0% V 0.4% PRIOR

- (NZ) NEW ZEALAND JAN CREDIT CARD SPENDING M/M: 0.2% V 3.2% PRIOR; Y/Y: 7.1% V 8.6% PRIOR

- (MY) Malaysia Jan CPI y/y: 3.2% v 2.7%e

 

Asia Session Notable Observations, Speakers and Press

- Asian equity markets are mixed amid muted volatility in spite of all US indices hitting fresh record highs after a 3-day weekend. Investors still await FOMC policy meeting minutes for cues on policy bias as they calibrate expectations for a tightening next month. During US hours, Fed's Harker reiterated the consideration of March tightening should be on the table, while comments from Fed's Mester during Asia session noted US being at full employment and inflation expectations moving higher. Probability of the March move is still below 20, though the odds for a 25bp move by May has risen to about 45%.

- In FX, USD was under the most pressure against JPY and GBP - USD/JPY fell to session lows in the wake of BOJ Gov Kuroda stating oil prices have likely stopped weighing on CPI, potentially diminishing the need for bolder easing. GBP/USD saw more pronounced gains above $1.25 after reports that the Brexit law passed the reading in the upper house of parliament without a vote.

- China developer names traded mixed and little changed after the latest property prices showed continued trend of moderating. Prices rose in 45 out of 70 cities v 46 in prior month, while avg price growth across the top cities slowed to 0.2% v 0.3% prior m/m and 12.2% v 12.4% prior y/y. China Stats Bureau said that data shows home prices stabilizing in lower tier cities and outright falling sequentially in top-tier cities.

- In Australia, Q4 construction work volume surprisingly contracted for the 6th straight quarter against expectation of a rise, though the decline was dominated by the Engineering component as others (Building, Residential, and non-Residential) were all positive. Some economists have already revised their expectations for Q4 growth based on the construction drop. Among notable earnings, Woolworths rose over 4% despite missing expectations after completing writedowns on home improvement unit, Fortescue fell over 2% on profit-taking despite the strong growth in profits, and Woodside Petroleum was up a marginal 0.1%.

China:

- (CN) NBS: China home prices have stabilized

- (CN) According to Nielsen, China Consumer Confidence in Q4 rose 2pts from Q3 to 108 - Shanghai Daily

Japan:

- (JP) Bank of Japan (BOJ) Gov Kuroda: More easing possible if needed to reach price target, but chances are small for a further negative rate cut

- (JP) Japan Fin Min Aso: no plan to issue negative yield JGB at this time

Australia/New Zealand:

- (AU) JPMorgan lowers Australia Q4 GDP forecast to 0.7% from 0.9% following latest construction data

- (AU) RBA Gov Lowe: Reiterates Australia growth expectations of about 3% GDP for next 2 years and gradual rise in inflation; Debt levels are impacting

- (NZ) AgriHQ dairy analyst: Today's decline in Dairy Trade Auction is a short term reaction to balanced market - NZ press

 

Asian Equity Indices/Futures (00:00ET)

- Nikkei -0.1%, Hang Seng +0.8%, Shanghai Composite -0.2%, ASX200 +0.2%, Kospi +0.1%

- Equity Futures: S&P500 +0.1%; Nasdaq +0.1%; Dax +0.1%; FTSE100 flat

 

FX ranges/Commodities/Fixed Income (00:00ET)

- EUR 1.0530-1.0555; JPY 113.35-113.70; AUD 0.7665-0.7697; NZD 0.7155-0.7175

- Apr Gold -0.2% at $1,237/oz; Apr Crude Oil +0.3% at $54.48/brl; Mar Copper -0.2% at $2.74/lb

- (NZ) Fonterra Global Dairy Trade Auction: Dairy Trade price index: -3.2% v +1.3% prior (biggest decline since Jan 3rd)

- SLV: iShares Silver Trust ETF daily holdings rise to 10,428 tonnes from 10,410 tonnes prior; first rise since Jan 27th

- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.8830 V 6.8790 PRIOR; 3rd straight weaker setting

- (CN) PBOC to inject combined CNY120B v CNY100B prior in 7-day, 14-day and 28-day reverse repos

- (AU) Australia sells A$11.0B in 2028 2.75% bonds; avg yield 3.005% (largest sale on record)

 

Asia equities / Notables / movers by sector

- Consumer discretionary: FXJ.AU Fairfax Media +8.6% (H1 result); APE.AU AP Eagers +1.3% (FY16 result); TGR.AU Tassal Group +5.2% (H1 result); CCL.AU Coca-Cola Amatil +5.7% (FY16 result); BGA.AU Bega Cheese +3.9% (H1 result)

- Consumer Staple: WOW.AU Woolworths +4.4% (H1 result)

- Financials: 1862.HK Jingrui Holdings +1.7% (profit warning); 1036.HK Vanke Property (Overseas) -0.8% (FY16 result); MNY.AU Money3 Corp -1.4% (H1 result); MMS.AU McMillan Shakespeare +8.3% (H1 result)

- Industrials: FBU.NZ Fletcher Building Limited -5.2% (H1 result); QUB.AU Qube Holdings -0.6% (H1 result)

- Technology: 6502.JP Toshiba Corporation +18.4% (said to raise expectations for chip unit sale); ISD.AU iSentia Group -34.9% (H1 result); WTC.AU Wise Tech +9.4% (H1 result); AGI.AU Ainsworth Game Technology +2.2% (H1 result)

- Materials: FMG.AU Fortescue Metals Group -2.8% (H1 result); BHP.AU BHP Billiton -0.6% (H1 result)

- Energy: 135.HK Kunlun Energy -0.6% (profit warning); WPL.AU Woodside Petroleum +0.1% (FY16 result)

- Healthcare: BKL.AU Blackmores -10.4% (H1 result); IFN.AU Infigen Energy -1.8% (H1 result); HSO.AU Healthscope +5.6% (H1 result)

- Telecom: SLC.AU Superloop +6.6% (signs contract).