Equities continue to follow Wall Stlead

Asia Market Update: Equities continue to follow Wall Stlead; China uses 1-yr MLF after telling banks to hold off on new loans

Headlines/Economic Data

General Trend: Equities in China and Hong Kong outperform

- Kospi supported by gains in chip sector

- In Asia, S&P500 and Nasdaq Futures move between gains and losses

- Nikkei pares opening gains

- Shanghai Property Index rises over 3%, later pares gain

- China PBoC said to ask banks to temporarily halt new loans after Jan New Yuan Loans hit record high

- PBoC offers 1-year medium-term lending facility (MLF) ahead of Chinese Lunar New Year

- USD/JPY declines as Japanese traders return from holiday

- Japan Q4 Prelim GDP data due on Wednesday

Japan

- Nikkei 225 opened +1.2%; closed -0.7% (was closed on Monday for holiday)

- TOPIX Iron & Steel Index -1.2%

- Pioneer [6773.JP] Declines over 9% after cutting FY forecast

- Renesas Electronics [6723.JP] Declines over 2%, guided Q1 semiconductor sales lower q/q

- Fujifilm [4901.JP]: Declines over 1% as activist Carl Icahn urged Xerox to vote against planned merger

- Toyota Motor declines over 1% amid stronger yen

- (JP) Japan Fin Min Aso: Trying to promote new type of tax free NISA program

- (JP) Japan Jan PPI (CGPI) M/M: 0.3% v 0.3%e; Y/Y:2.7% v 2.7%e

-(JP) Japan Econ Min Motegi: PM Abe stance on monetary policy must be maintained- answer when asked about Gov Kuroda being reappointed

-(JP) Japan PM Abe: Undecided on next BoJ Gov

- (JP) Bank of Japan (BOJ) Gov Kuroda: Reiterates must maintain 'powerful' easing for economy, still distant to price target -speaking in parliament

Korea

-Kospi opened +0.7%

- Chip makers gain: Samsung Electronics and Hynix rise over 3%

- Coway [021240.KR]: Declines over 6% after reporting FY earnings

- Kangwon Land[035250.KR]: Declines over 1% as Q4 Op profit missed ests

- (KR) South Korea Jan Export Price Index M/M:-0.4% v -1.5% prior; Y/Y: -3.5% v -2.0% prior; Import Price Index M/M: +0.7% v -0.7% prior; Y/Y:-2.4% v -0.9% prior

-(KR) South Korea economist are worried about the fallout from a reversal ofcorporate tax rates and interest rates in Korea and the US; when the Fed raisesrates next time, it will create the first rate reversal between the twoeconomies in 11 years - Korean press

China/Hong Kong

- Hang Seng opened +1.3%, Shanghai Composite +0.7%

- Hang Seng Info Tech Index +3.5%, Materials +3%, Industrial Goods +2.8%, Consumer Goods +2.5%, Property/Construction +2.3%, Financials+2.3%, Services +2.3%

- (CN) China PBOC has asked banks to defer new loans until after Feb 15th (start of Lunar New Year)

- (CN) CHINA JAN NEW YUAN LOANS (CNY): 2.900T V2.050TE (fresh record high) after the closeyesterday

-(CN) CHINA JAN M2 MONEY SUPPLY Y/Y: 8.6% V 8.2%E; M1 MONEY SUPPLY Y/Y: 15.0% V13.5%E after the close yesterday

-(CN) CHINA JAN AGGREGATE FINANCING (CNY): 3.060T V 3.200TE afterthe close yesterday

- USD/CNY (CN) PBOC SETS YUAN REFERENCERATE AT 6.3247 V 6.3001 PRIOR

-(CN) CHINA PBOC LENDS CNY393B V CNY398B PRIOR IN 1-YR MEDIUM-TERM LENDINGFACILITY (MLF) AT RATE OF 3.25% V 3.25% PRIOR

- (CN) PBoC: Skipped Open Market Operation (OMO) for 15th straight session

-(CN) China Insurance Regulator (CIRC): Insurance firms offshore financingbalances backed by domestic guarantees cannot exceed 20% of net assets at endof prior quarter

- Sunny Optical, 2382.HK Reports Jan handset lens setsshipments +19.6% y/y; Guides FY17 Net to rise more than 120% y/y

- HNA unit HKICIM to sell Kai Tak sites to Henderson Land for HK$16.0B

Australia/New Zealand

- ASX 200 opened +0.1%; closed +0.6%

- ASX 200 Telecom Index +0.7%, Resources +0.8%, Financials +0.4%

- (AU) RBA's Assistant Gov Ellis: Retail competition to work against wage pressures, no reason yet to change full employment est from 5%

-(AU) Australia Bureau of Agricultural and Resource (ABARES): Total area plantedto summer crops is estimated to have increased by 2% in 2017-18 to 1.3M hectares,-9% from Dec forecast

-(AU) Australia sells A$150M v A$150M indicated in Nov 2027 indexed bonds, bidto cover 4.20x, avg yield 0.85333%

-(AU) Australia Jan NAB Business Confidence: 12 v 10 prior; Conditions: 19 v 13prior

-PilbaraMinerals (+10%), PLS.AU Reports Pilgangoora Project Pre-Feasibility Study results, DefinitiveFeasibility Study to complete by mid 2018

- (NZ) New Zealand Government 6-Month FinancialStatements; Budget Surplus NZ$1.09B, +NZ$779M more than forecasted

Other Asia

- (TW) Taiwan Final Q4 GDP due for release during European session

North America

- US equity markets ended broadly higher: Dow +1.7%, S&P500 +1.4%, Nasdaq +1.6%,Russell 2000 +0.9%

- S&P500 Materials +2%, Technology +1.8%

(US) White House released 2019 budget plan: seeks$1.7T of cuts to mandatory spending and receipts

- AmerisourceBergen (ABC) Walgreens said to be in early stage talks to acquire the company - US financial press

- GM GM Korea to shut down one of its factors; Confirms that it needs support from stakeholders to normalize its business in South Korea; to take charges of up to $850M

- Wynn Resorts [WYNN]: Special Committee retains law firm Gibson, Dunn & Crutcher LLP and expands review

Looking Ahead: US Weekly API Crude Oil Inventories due later today

Europe

- (UK) BOE’s McCafferty (dissenter): interest rates will have to rise gradually - press interview; UK economy is holding up relatively well,so rates will probably start rising sooner than previously thought

- (SA) South Africa's Zuma reportedly wants 3-month notice period before resigning – press; Reportedly Zuma was given 48 hours to resign

- Michelin[ML.FR]: Reports FY17 Op Net €2.74 v €2.75Be, Rev €22.0B v €20.9By/y; Guides initial FY18 Recurring Op income higher y/y, FCF over €1.1B
Looking Ahead: UK Jan CPI data due later today, along with the IEA Monthly report

 

Levels as of 01:00ET

- Nikkei225 -0.7%, Hang Seng +1.6%; Shanghai Composite +1.1%; ASX200 +0.6%, Kospi +0.7%

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

- EUR 1.2312-1.2284; JPY108.78-108.24; AUD 0.7874-0.7848;NZD 0.7272-0.7247

- Apr Gold +0.2% at $1,328/oz; Mar Crude Oil +0.6% at $59.62/brl; Mar Copper +0.9% at $3.11/lb