Equities trade cautiously higher amid US data and Fed decision

Asia market update: Equities trade cautiously higher amid US data and Fed decision; USD declines; BOE and ECB up next.

General trend

- Nasdaq FUTs rise, Meta Platforms reported financial results.

- Japanese cos. due to report earnings include Sony, Mitsubishi UFJ, KDDI, Takeda, Mizuho Financial, Murata Manufacturing, Panasonic, Japan Airlines.

- China’s Commerce Ministry (MOFCOM) sometimes holds weekly news conferences on Thurs.

Headlines/economic data

Australia/New Zealand

-ASX 200 opens +0.3% at 7,524.

-(AU) Australia Q4 NAB Business Confidence: -1 v +9 prior [first decline since Q3 2021].

-(AU) Australia Dec Building Approvals M/M: 18.5% v 1.0%e.

-(AU) CBA: Expects one further 25bps rate hike by the RBA, then expects the central bank to pause its tightening cycle [the next RBA decision is Feb 7th (Tues)].

-(NZ) New Zealand sells NZ$400M v NZ$400M indicated in 2028, 2033 and 2037 bonds.

-(NZ) New Zealand Dec Building Permits M/M: -7.2% v +7.0% prior.

China/Hong Kong

-Hang Seng opens +0.9% at 22,276.

-Shanghai Composite opens +0.2% at 3,291.

-(CN) China CSRC launches IPO registration system reform today, Feb 1st.

-(US) Reportedly Senators Machin and Sinema offer bill to block oil reserve sales to China - press.

-(CN) China PBOC sets Yuan reference rate: 6.7130 v 6.7492 prior [strongest CNY fix since Jul 11, 2022].

-(CN) China PBOC Open Market Operation (OMO): Sells CNY66B in 7-day reverse repos v CNY155B prior; Net drain CNY401B v drains CNY292B prior.

-(HK) Hong Kong Monetary Authority (HKMA) raises rates by 25bps to 5.00% (as expected).

-(HK) HSBC and Standard Chartered to lower term deposit rates in HK, notes decline in HIBOR - HK Press.

Japan

-Nikkei 225 opens +0.4% at 27,453.

-(JP) Japan MoF sells ¥2.7T v ¥2.7T indicated in 0.5% 10-year JGBs; Avg Yield: 0.485% v 0.5000% prior; bid-to-cover: 4.6x v 4.8x prior.

-(JP) Japan end-Jan Monetary Base: ¥651.9T v ¥632.4T prior; Y/Y: -3.8% v -6.1% prior [5th straight decline].

-(JP) Bank of Japan (BOJ) releases text of Dep Gov Wakatabe speech: Reiterates necessary to continue pursuing monetary easing steadily in order to achieve the price stability target in a sustainable and stable manner.

-(JP) Former BOJ official Masai said BOJ needs to verify feasibility of policy normalization, recommends appointing a woman to one of the BOJ's top positions – US financial press.

Korea

-Kospi opens +1.3% at 2,481.

-*(KR) South Korea Jan CPI M/M: 0.8% V 0.7%E; Y/Y: 5.2% V 5.0%E.

Other Asia

- (IN) RBI has asked India banks to disclose details of their exposures to Adani Group - financial press.

-(IN) Citigroup wealth unit said to halt margin loans related to Adani securities, follows similar move by Credit Suisse - US financial press.

North America

-(US) FOMC raises target range by 25bps TO 4.50-4.75%; as expected; reiterates that ongoing rate increases will be appropriate; Notes inflation has "eased somewhat"; To consider 'extent' of future rate increase (changed from "pace").

-(US) Fed Chair Powell: We have more work to do: Without price stability economy does not work for all; We need substantially more evidence to be confident that inflation is on a sustained downward path; We will make decisions meeting by meeting going forward - rate decision press conference.

-(US) Fed Chair Powell: We are talking about a couple of more rate hikes to get to restrictive level; The committee did not see this as a time to pause; Spent a lot of time about talking about the path of policy ahead (declines to comment on whether they discussed future pause); Have not discussed potential for pausing/skipping a meeting before raising again; Yesterday's ECI report was constructive - rate decision Q&A.

-(US) House Speaker McCarthy: Told Pres Biden today that "I would like to get to a deal on the debt ceiling long before the deadline"; Can see some common ground, could get a funding agreement that spans 2 years.

-(US) Follow Up: House Speaker McCarthy (R) said not going to pass a clean debt ceiling – Press.

-*(US) Jan ISM manufacturing: 47.4 V 48.0E; prices paid: 44.5 V 40.4E.

*(US) Dec Jolts job openings: 11.012M V 10.300ME.

Levels as of 00:20 ET

- Nikkei 225, +0.3%, ASX 200 +0.1% , Hang Seng +0.3%; Shanghai Composite +0.2% ; Kospi +0.8%.

- Equity S&P500 Futures: +0.3%; Nasdaq100 +1%, Dax +0.7%; FTSE100 +0.5%.

- EUR 1.1033-1.0983 ; JPY 129.07-128.17 ; AUD 0.7157-0.7129 ;NZD 0.6536-0.6491.

- Gold +1.3% at $1,968/oz; Crude Oil +1.1% at $77.22/brl; Copper flat at $4.1807/lb.