Asia market update: Nikkei surges again, KR equities also gain while CN, HK on holiday; AU consumer & biz confidence up; NZ inflation expectations fall; Strong focus on US CPI.

General trend

- Japanese equities again surged, +2.8%, with the Nikkei in sight of the 38,000 handle (first time since Feb 1990). Chip-related Tokyo Electron +11% to highest level since 2020 after boosting FY24 forecast, with Softbank up another +9% after chip-designer ARM extended its rally post-earnings last week (+29% today and +98% in past 5 days).

- Aussie equity indices flat, held back by Financials, in particular poor earnings guidance from Macquarie Group.

- Australian Consumer Confidence was at its highest since June, 2022, and Business Confidence also reported its first positive read since last August.

- New Zealand’s Q1 inflation expectations came in lower across the board of 1-yr, 2-yr, 5-yr outlooks. NZD -0.5% post-release, with 10-yr sovereign bonds yields -1.5bps (yields overall still having risen 28bps since early Feb)

- Korea’s Kospi index again pushed higher by over 1.2% to be within touching distance of its January high of 2,730. Breaking that level would take the index back to early 2022 levels for the first time.

- All eyes on US CPI tonight

- US equity FUTs down -0.2% during Asian trading;

Looking ahead (Asian time zone)

- Tue Feb 13th (Tue night) US Jan Inflation.

- Wed Feb 14th (Wed evening) UK Jan Inflation, EU Q4 GDP & Employment & Industrial Production.

- Thu Feb 15th JP Q4 GDP, AU employment, UK GDP Q4 prelim, (Thu night) US Retail Sales.

- Fri Feb 16th RBNZ Gov Orr, NZ Biz PMI, (Fri evening) UK Retail Sales, (Fri night) US Jan Building Permits, Jan PPI, Feb Consumer Sentiment.

Holidays in Asia this week

- Tue Feb 13th China, Hong Kong, Taiwan, Vietnam.

- Wed Feb 14th China, Taiwan, Vietnam.

- Thu Feb 15th China.

- Fri Feb 16th China.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.1% at 7,620.

- Australia Feb Westpac Consumer Confidence: 86.0 v 81.0 prior (highest since Jun 2022).

- Australia Jan NAB Business Confidence: +1 v -1 prior (first positive reading since Aug, 2023).

- Australia ANZ Roy Morgan Weekly Consumer Confidence: 82.6 v 83.8 prior.

- Australia sells A$150M v A$150M indicated in Aug 2035 Indexed Bonds; Avg Yield: 1.7209% v 1.9234% prior; bid-to-cover: 3.60x v 3.31x prior.

- Macquarie Group (MQG.AU) Guides Group FY24 Net to date 'substantially down' y/y.

- Australia RBA's Kohler [Head of Economic Analysis Dept]: Inflation coming down, but still too high.

- New Zealand Q1 Inflation Expectation Survey (2-year outlook): 2.5% v 2.8% prior [2-year survey stayed within the inflation range for 4th straight reading].

China/Hong Kong

- Hang Seng closed for Lunar New Year holiday.

- Shanghai Composite closed for Lunar New Year holiday.

- EU proposes first trade curbs on Chinese firms over the Russia war - press.

- US House Republican and China committee's chairman Gallagher (R-WI) will not run for re-election citing personal reasons – press (overnight update).

- (RU) Russia Pres Putin reportedly expected to visit China in 2024 – SCMP (overnight update).


- Nikkei 225 opens +1.0% at 37,248.

- Japan Jan PPI (Domestic CGPI) M/M: 0.0% v 0.1%e; Y/Y: 0.2% v 0.1%e.

- Japan Fin Min Suzuki: It is vital that insurers divest cross-shareholdings.

- Japan PM Kishida: Reportedly seeking summit with North Korea's Kim Jong Un - FT.

South Korea

- Kospi opens +0.9% at 2,644.

- South Korea Feb 1-10 Exports Y/Y: -14.6%; Imports Y/Y -24.6%.

- South Korea Jan Foreign Net Investment in Local Bonds: +$1.9B v -$0.8B prior.

- New BOK board member Hwang Kun-il sees both positives signs and economic risks - Press.

Other Asia

- Philippines Central Bank (BSP): Corporate liquidity pressures have eased.

- Indonesia Jan Consumer Confidence: 125.0 v 123.8 prior.

- Thailand Jan Consumer Confidence: 63 v 62 prior (47-month high).

North America

- (US) CENTCOM: Houthi militants fire two missiles from Yemen toward ship Star Iris in Bab Al-Mandeb.

- (US) Senate advances aid package for Ukraine, Israel and Taiwan (as expected) - US press.

- (US) Fed’s Bowman (voter, hawk) Q&A: Doesn't see cuts as appropriate in the immediate future; Many risks remain for Fed's inflation fight.

- (US) Jan monthly budget statement: -$21.9B V -$21.0BE.

- (US) Fed’s Barkin (voter): We're closing in on the inflation target but not there yet.

- (US) NY Fed Jan 1-year Inflation Expectations: 3.0% v 3.0% prior.


- (DE) TSLA Raises price in Germany for Model Y RWD to €44,990 (prior €42,990), Model Y Long Range to €52.490 (prior €49,990) and Model Y Performance to €58,490 (prior €55,990) - US financial press.

- (UK) BOE to stress test insurers regarding exposure to reinsurance cos. - FT.

- (IR) Iran government: Severe consequences if Israel 'war crimes' spread to Rafah - press.

- (IL) Axios reporter: Senior Israeli officials have told me that an Israeli delegation will go to Egypt tomorrow for a meeting with the head of the CIA, the head of Egyptian intelligence and the prime minister of Qatar in an attempt to promote negotiations.

- (UK) BOE Gov Bailey: I expected banks to hold larger reserves at the BOE than was the case before the financial crisis.

- (DE) German Chancellor Scholz: Questioning the NATO mission is irresponsible and dangerous; Any relativization of NATO solidarity is dangerous and serves Putin.

Levels as of 00:20 ET

- Nikkei 225 +2.7% ; ASX 200 -0.2% ; Hang Seng closed ; Shanghai Composite closed ; Kospi +1.1%.

- Equity S&P500 Futures -0.2%; Nasdaq100 -0.2%, Dax -0.1%; FTSE100 flat.

- EUR 1.0760-1.0776; JPY 149.27-149.58; AUD 0.6513-0.6532; NZD 0.6096-0.6134.

- Gold flat at $2,033/oz; Crude Oil +0.2% at $77.05/brl; Copper +0.9% at $3.7523lb.

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