Light, directionless day in Asia bookends several days of extreme vol

Asia market update: Light, directionless day in Asia bookends several days of extreme vol; Focus on US Jan ISM Services PMI.

General trend and developments

- Equities in Asia were mixed, with Kospi to another record high while Nikkei came off its own record highs yesterday to underperform -0.9%.

- Precious metals continued their recovery, with Gold retaking the $5,000 handle, up to $5,085/oz.

- Australia 3-year yields +4bps while New Zealand 2-year yields -4bps after a higher unemployment rate, although employment figures were up. AUD/NZD holding 116 handle.

- China RatingDog Services PMI largely in-line with estimates and the prior for a 35th month of expansion.

- Bank of Japan 10-25 year total bids in today’s outright bond buying operation saw ¥384.0B bid but only ¥95.0B taken up by the BOJ, or about 4x.

- Note that last night’s US JOLTS jobs data has been delayed due to the mini-govt shutdown in the US (now over after the House and Pres Trump signed the temporary govt spending package into law - until the Fall of this year).

- Chipmaker AMD punished -8% after hours on topline beats but unimpressive Q1 revenue forecast, feeding into the wider narrative of slower AI growth trajectory than previously anticipated.

- US equity FUTs 0.0% to 0.1% during Asia trading.

Looking ahead (Asian-weighted focus, using Asian time zone)

- Wed Feb 4th (Wed eve EU Jan CPI, Wed night US Jan ISM Services PMI).

- Thu Feb 5th AU Dec Trade Balance, ID Q4 & 2025 GDP, (Thus eve UK BOE rate decision, EU ECB rate decision).

- Fri Feb 6th JP Dec Household Spending, JP BOJ Masu speech, (Fri night US Jan Nonfarm Payroll, US Michigan Consumer Sentiment).

- Sun Feb 8th Japan and Thailand elections.

Holidays in Asia this week

- Mon Feb 2nd Malaysia.

- Fri Feb 6th New Zealand.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens -0.1% at 8,848.

- Australia Jan Final PMI Services: 56.3 v 56.0 prelim (confirms 24th month of expansion) (update).

- Australia Oct Avg Daily FX Turnover (A$): 178.6B - Press.

- Australia sells A$1.2B v A$1.2B indicated in 4.25% Oct 2036 Bonds; Avg Yield: 4.9012%; bid-to-cover 3.73x.

- RBNZ calls for deposit takers to enhance their risk management practices.

- New Zealand Jan ANZ Commodity Price M/M: +2.0% v -2.1% prior.

- New Zealand Q4 Unemployment Rate: 5.4% v 5.3%e.

China/Hong Kong

- Shanghai Composite opens -0.1% at 4,064; Hang Seng opens -0.1% at 26,797.

- China Jan RatingDog PMI Services: 52.3 v 52.0e (35th month of expansion).

- More PBOC support is expected for liquidity during the Lunar New Year holiday [inline]; cites analysts - Chinese press.

- China to stabilize food and oil production; To maintain prices of major agricultural products at reasonable levels - China press on govt releasing No.1 document.

- USTR Greer: We will finish papering India trade deal; This is a big win - CNBC.

- China reportedly urges for breakthroughs in 6G and quantum technology - press.

- China MOF sells 3-month bills at 1.2432% and 2-year Bonds at 1.3285% v 1.4016% prior.

- Hong Kong Jan PMI (whole economy): 52.3 v 51.9 prior.

- Hong Kong sells HK$2.5B in 7-year and 2045 bonds.

- China PBOC sets Yuan reference rate: 6.9533 v 6.9608 prior.

- China PBOC Open Market Operation (OMO): Injects CNY75B; Net drains CNY303B v drains CNY297B prior.

Japan

- Nikkei 225 opens -0.9% at 54,250.

- Japan Econ Ministry (METI) to review its guidelines for M&A decisions - Nikkei.

- Japan Jan Final PMI Services: 53.7 v 53.4 prelim (confirms 15th month of expansion).

Korea

- Kospi opens -0.5% at 5,260.

- South Korea Jan Foreign Reserves: $425.9B v $428.1B prior.

- South Korea BOK sells KRW2.0T in 2.84% 2-year Monetary Stabilisation Bonds (MSBs): Avg yield 3.115%.

- South Korea Vice Welfare Min: Pension fund hopes to issue USD-denominated bonds in 2026.

Other Asia

- (IN) India Trade Min Goyal: Trade deal with US in final stages of details; To offer zero tariffs to US on most industrial goods.

- (IN) India regulator considering supervision revamp for banks to curb risk - financial press.

- (IN) India Jan Final PMI Services: 58.5 v 59.3 prelim (confirms 54th month of expansion).

- (IR) Reportedly Iran seeking to change format and venue of nuclear discussions with US - Axios; Trump: We are still talking with Iran, there will be more than one meeting.

- (KZ) Reported Kazakhstan Jan oil exports down 30% m/m due to Tengiz (TCO) outage and Caspian Pipeline Consortium (CPC) loading restrictions - press.

- (VN) Vietnam Trade Ministry: Willing to buy more American goods, especially machinery, high tech products - statement on meeting with Apple, ExxonMobil, Excelerate Energy.

- (SG) Singapore Jan PMI (whole economy): 56.8 v 54.1 prior.

- (ID) Indonesia sells total IDR36.0T vs. IDR33.0T target in bills and bonds (update).

- (ID) Indonesia sells total IDR36.0T vs. IDR33.0T target in bills and bonds (update).

North America

- (US) Fed’s Barkin (voter): Real wage growth and low unemployment support the consumer; 1.75ppts of cuts approved since the fall of 2024 have "taken out some insurance to support the labor market as we work to complete the last mile to bring inflation back to target".

- (MX) Mexico Fin Min Amador: To invest MXN 5.6T in public works until 2030.

- (US) Large home builders said to be working on plan that could build as many as 1M homes to support Trump housing initiatives - press.

- (IR) Reportedly US Navy shot down Iranian drone that neared US aircraft carrier Abraham Lincoln in Arabian Sea - press cites US official

- (MX) Mexico Jan IMEF Manufacturing Index: 46.4 v 46.5e.

- (US) House vote on spending package passes, ending brief government shutdown.

Europe

- (UK) City AM Shadow MPC: Majority recommends BOE leave rates unchanged in Feb; the vote was 7-2.

- (UK) Times Shadow MPC: Votes to leave rates unchanged; the vote was 9-0 - update.

- NVO guides initial FY26 Adj sales -5% to -13%, Adj EBIT -5% to -13%; Notes that GLP-1 market expansion is assumed to continue, enabling Novo Nordisk to increase patient reach and expand volumes.

- (UR) Ukraine Pres Zelenskiy: Waiting for US reaction to overnight attacks by Russia; If US and Europe can't stop Russian strikes, who will believe there is power to guarantee war will not break out again?

Levels as of 00:20 ET

Nikkei 225 -0.7%; ASX 200 +0.8%; Hang Seng -0.1%; Shanghai Composite +0.1%; Kospi +1.3%.

Equity S&P500 Futures +0.0%; Nasdaq100 -0.0%; DAX -0.1%; FTSE100 -0.3%.

EUR 1.1836-1.1809; JPY 0.6421-0.6394; AUD 0.7037-0.7013; NZD 0.6055-0.6027.

Gold +2.8% at $5,083/oz; BTC -2.2% at $76,578, Crude Oil +0.9% at $63.78/bbl; Copper -0.8% at $6.0428/lb.