Most equity indices see modest declines after weakness on Wall Street, Shanghai Composite lags

Asia Market Update: Most equity indices see modest declines after weakness on Wall St; Shanghai Composite lags; WTI Crude FUTs rise after recent price volatility; BOJ acted amid rise in short-term rates.

General trend

- Russia/Ukraine talks to continue.

- Japan reported wider than expected Current Account Deficit in Jan.

- Japan’s real wages unexpectedly rose in Jan [data said to be supported by calculation change].

- Australia Feb NAB Business Confidence: the survey for the month was largely completed before the invasion of Ukraine.

- Sri Lanka commented on currency devaluation.

- Commodity currencies remain somewhat volatile.

- US Wheat FUTs pulled back from the recent highs; Nickel FUTs extended gains with the continued focus on Russia [short squeeze?].

- Gold FUTs move below $2,000/oz.

- Some focus on demand destruction and margin calls amid the recent commodity price volatility.

- UST yields extend rise during Asia.

- NZ yield curve flattened amid hawkish RBNZ call by ANZ.

- Financials trade mixed.

- US equity FUTs trade slightly lower.

- Shanghai Composite underperforms ahead of Wed’s inflation data [Consumer, Industrial, IT and Property firms lag]; Kweichow Moutai rose on financial results.

- Hang Seng opened slightly higher, ended morning trading lower [Mainland Property and TECH indices decline]; Debt concerns among property names remain in focus [Logan Property; Yuzhou].

- Nikkei 225 has extended declines [Tech declines weigh on Softbank Group; Automakers remain weaker]; Topix transportation and iron/steel indices decline by over 4%, Financials also drop.

- Energy and Resources indices declined in Australia.

- Australian energy cos. commented on Russian oil.

- RBA Gov Lowe to comment on Wed [Speech by Philip Lowe, Governor – Recent Economic Developments – to AFR Business Summit 2022; 9.20 am AEDT].

- South Korea presidential elections also due on Wed [SK markets to close on Wed].

Headlines/Economic data

Australia/New Zealand

- ASX 200 opened +0.0%.

- (NZ) New Zealand Q4 volume of all buildings Q/Q: 8.9% V 10.0%E; Non-residential construction q/q: +15.8% v -12.4% prior.

- (AU) Australia sells A$150M v A$150M indicated in Nov 2032 indexed bonds; Avg Yield: -0.2759%; bid-to-cover: 4.01x.

- QAN.AU CEO Joyce: Corporate demand is at 60% of pre-COVID levels, up from 30% 3 weeks ago; If fuel prices remain at current levels will need to raise prices.

- (AU) Former Australia Treasurer Costello said the RBA is behind the curve, expects inflation to persist - financial press.

Japan

- Nikkei 225 opened -1.0%.

- (JP) Japan Fin Min Suzuki: Important to maintain policies to help raise wages; Japan sanctions against Russia includes crypto assets.

- (JP) Bank of Japan (BOJ) Gov Kuroda: Economy has yet to fully recover from pandemic impact, reiterates need to continue with monetary easing; fixed rate operation is very effective when yields spike - Diet.

- (JP) Bank of Japan (BOJ) official: Must keep an eye on how developments in Ukraine could affect Japan companies' funding via rising oil prices.

- (JP) Japan Jan Labor Cash Earnings Y/Y: 0.9% v 0.1%e; Real Cash Earnings Y/Y: +0.4% v -1.0%e.

- (JP) Japan Jan BoP Current Account: -¥1.19T (largest since Jan 2014) v -¥870.5Be; Adj Current Account: ¥191.7B v ¥332.5Te.

- (JP) Japan Feb Bank Lending Y/Y: 0.4% v 0.6% prior; Bank Lending (ex-trusts) Y/Y: 0.3% v 0.6% prior.

- (AU) Australia Feb NAB Business Confidence: 13 v 4 prior; Conditions: 9 v 2 prior.

- (JP) BOJ offers to buy ¥3.0T in JGBs, relates to repurchase agreements.

- (JP) Japan MoF sells ¥2.5T v ¥2.5T indicated in 0.005% 5-year JGBs; Avg Yield: -0.0070% v +0.0440% prior, bid-to-cover: 3.29x v 3.39x prior.

Korea

-Kospi opened -1.3%.

- (KR) South Korea Unification Ministry calls on North Korea to abide by agreements it has made with the international community for the denuclearization of the Korean Peninsula amid reports it is continuing activities at its main Yongbyon nuclear complex.

China/Hong Kong

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

- Property developer, 01628.HK Defaulted on interest payment.

- (CN) China Feb foreign reserves: $3.214T V $3.225TE.

- (CN) China Foreign Min Wang Yi: Taiwan to eventually return to embrace of motherland; Russia-China cooperation is good for world peace and stability (yesterday later in session).

- (CN) China PBOC sets Yuan reference rate: 6.3185 v 6.3478 prior.

- (CN) China PBOC Open Market Operation (OMO): Sells CNY10B in 7-day reverse repos v CNY10B prior; Net drain CNY40B v Net drain CNY290B prior.

- (CN) CPPCC National Committee's Committee for Economic Affairs deputy director Cao Pei Xi: Will further manage coal prices within reasonable range.

Other

- (TW) Taiwan Air Force: In close contact with US on F-16 deliveries.

North America

- (US) White House to issue cryptocurrency executive order this week, will task Federal agencies to study the market, study concept of a US digital currency – press.

- (VE) Venezuela Pres Maduro: Talks with US were polite and productive, negotiations will continue.

Europe

- (US) US Secretary of State Blinken to meet France President Macron on Mar 8th – press.

- (EU) EU's Mora (coordinator Iran nuclear talks): To clarify there are no longer expert level talks, formal meetings, its time for political decisions to end Vienna talks within next few days.

Levels as of 00:15ET

- Hang Seng -0.0%; Shanghai Composite -1.3%; Kospi -0.7%; Nikkei225 -1.4%; ASX 200 -0.8%.

- Equity Futures: S&P500 -0.2%; Nasdaq100 -0.3%, Dax +0.4%; FTSE100 -0.8%.

- EUR 1.10885-1.0849; JPY 115.50-115.26; AUD 0.7348-0.7288; NZD 0.6851-0.6804.

- Commodity Futures: Gold -0.0% at $1,995/oz; Crude Oil +1.7% at $121.49/brl; Copper +1.4% at $4.81/lb.