No fresh violence near Saudi or US military facilities nor in Hormuz

Asia market update: Asia bounces back following US; No fresh violence near Saudi or US military facilities nor in Hormuz; CN NPC inline.

General trend and developments

- Kospi rebounded hard at the open, +11%, taking back nearly all of the record one-day losses yesterday, on a market that had been stretched to the max prior with non-stop gains week after week. [Note that even after the 13% losses yesterday that the Kospi was still +20% for 2026].

- Asia markets took heart from higher US equities, positive US data and a steadying energy complex. The VIX again >20 and US equity markets closing about or even above where they were last Fridays close. [On energy, Treas Sec Bessent said to expect additional details on US measures to get ships sailing through the Strait of Hormuz in the coming days and hours - though no details yet during Asia session.

- A Korean lawmaker noted the country only has 9 days of LNG reserves; While SK Hynix noted it had “enough” helium in storage.

- Corporate issuers use 'calm' in markets to launch debt offerings. [Five issuers raised~$17B in the primary market on Wednesday [NY session, with no fresh bond cancellations in Asia].

- China NPC affirmed earlier policy stances, while 2026 econ targets of 4.5-5.0% GDP and CPI 2.0% were in-line with expectations. Notably China to issue CNY300B in treasury bonds to support banks' capital. Little market moves seen the wake of the reports, though on a day when markets bounced back in any case so difficult to tease out cause and effects.

- Japan OIS BOJ chances of a hike reflected yesterday’s falling yield curve at the belly and front-end, with March back down to 4% (vs 8% day before), April down to 60% (vs 67.5% day before) and June at 86.5% (vs 91.5% day before).

- JP yield curve up 4-5bps in belly and long-end in a re-steepening. Asian yields in general were up after UST.

- Anthropic CEO said to be back in talks with the Pentagon about an AI deal - just a day or so after being banned from all US govt services by Treas Sec Bessent and Pres Trump.

- Major Japan union group, UA Zensen, seeking pay increase of ~6.5% in 2026 Spring Wage talks.

- US equity FUTs -0.2% during Asia trading.

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

-Thur Mar 5th (Thur night EU ECB Minutes, EU ECB Lagarde Speech).

- Fri Mar 6th EU GDP, (Fri Night US Jan Retail Sales, US Feb Nonfarm Payrolls).

Holidays in Asia this week

- Mon Mar 2nd South Korea.

-Tue Mar 3rd India, Thailand.

Headlines/economic data

Australia/New Zealand

- (AU) ASX 200 opens +0.5% at 8,945.

- (AU) Australia Jan Household Spending M/M: 0.3% v 0.4%e; Y/Y: 4.6% v 5.1%e.

- (AU) Australia Jan Trade Balance (A$): 2.6B v 3.8Be.

- (AU) Australia PM Albanese: Discussed with Canada PM Carney importance of clean energy transition, and defense cooperation, critical minerals.

- (NZ) New Zealand Feb Cotality Home Value M/M: +0.2% v -0.1% prior.

- (NZ) New Zealand Q4 Volume of All Buildings Q/Q: -3.1% v 1.9%e.

China/Hong Kong

- (CN) Shanghai Composite opens +0.7% at 4,109; (HK) Hang Seng opens +1.3% at 25,584.

- (CN) China National Peoples’ congress (NPC): Sets 2026 GDP Growth Target “4.5-5.0%” (v ~5.0% in 2025); Sets 2026 CPI target at “~2.0%" (v 2.0% in 2025).

- (CN) China MOF: To cotinue to issue sovereign green bonds.

- (CN) Govt urges companies to suspend or cancel March-loading fuel exports - Press.

- (HK) Hong Kong lawmaker has called for enhancing listing rules for technology firms - Press.

- (CN) China PBOC sets Yuan reference rate: 6.9007 v 6.9124 prior [strongest Yuan fix since late Apr 2023].

- (CN) China PBOC Open Market Operation (OMO): Injects CNY23B in 7-day Reverse Repos; Net drains CNY298B v drains CNY369B prior.

Japan

- (JP) Nikkei 225 opens +1.8% at 55,204.

- (JP) Japan sells¥ 700B vs. ¥700B in 30-year JGB bonds; Avg yield: 3.3980% v 3.6150% prior; Bid-to-cover: 3.66x v 3.64x prior

- (JP) Over 460 unions linked to UA Zensen said to be seeking pay increase of ~6.5% for regular workers in 2026 Spring Wage talks - press

- (JP) Japan raises travel warning level for UAE, Qatar and others - financial press

Korea

- (KR) Kospi opens +3.1% at 5,251

- (KR) South Korea NPS [pension service] to delegate voting to external managers – South Korea press.

- (KR) Reportedly US and South Korea will discuss redeployment of their United States Forces Korea (USFK) assets to the Middle East - press.

- (KR) According to South Korea lawmaker, the country has only 9 days of LNG reserves – US financial press.

- (KR) South Korea Pres Lee: Need to counter volatility increase in financial markets - financial press.

Other Asia

- (ID) Indonesia Chief Econ Min Hartarto: Will examine Fitch's warning (on Economic outlook).

- (PH) Philippines Feb CPI M/M: 0.2% v 0.3%e; Y/Y: 2.4% v 2.4%e.

- (PH) Philippines to deploy interventions if external shocks heighten - statement following CPI release.

- (PH) Central Bank: Will ensure that policy settings remain in line with its pursuit of price stability - financial press.

- (VN) Vietnam has implemented its fuel supply plan - Press.

- (TH) Thailand Feb CPI M/M: -0.2% v +0.2%e; Y/Y: -0.9% v -0.6%e.

- (TW) Econ Ministry: No worries about LNG supplies this month.

- (SG) MAS issues guidelines on environmental risk management; To take effect from Sept 2027.

- Nanya Tech sees DRAM supply to remain tight through 2028.

North America

- (US) Feb ISM Services Index: 56.1 V 53.5E; New Orders Index: 58.6 v 53.5e; Prices Paid: 63.0 v 68.3e (lowest reading in 11 months).

- (US) DOE Crude: +3.5M v +1.6Me; Gasoline: -1.70M v -1.0Me; Distillate: +0.4M v -2.8Me.

- (CA) Bank of Canada (BOC) Gov Macklem: Opacity of private credit means spike in defaults could cause severe strains, including spillovers into public credit markets; The risks 'have not disappeared; they've migrated'- (US) MBA Mortgage Applications w/e Feb 27th: 11,0% v 0.4% prior.

- (US) Sec of War Hegseth: US will take all the time it needs to ensure success; More forces are arriving; More waves are coming, US just getting started.

- (US) Feb Monthly ADP Employment Change: +63K V +50KE; Notes the best showing for job gains since July 2025; Data shows no widespread pay benefit from changing jobs.

- (US) Feb Final S&P PMI Services: 51.7 v 52.3e (confirms 7th month of expansion).

- (US) DOJ said to probe fertilizer market for potential price fixing - press.

- (US) Fed Beige Book: Overall economic activity increased at a slight to moderate pace in seven of the twelve federal reserve districts, while the number of districts reporting flat or declining activity increased from four to five.

- (US) Fed's Miran (dovish dissenter): Still see March rate cut appropriate, have not changed view due to Iran conflict; 100bps of cuts this year is my base case.

- (US) Montana GOP Senator Daines (R) will not run for reelection in surprise move – Washington Post.

- (CA) Canada Foreign Minister: Directed my official to enter into contracts for charter flights to repatriate Canadians from United Arab Emirates.

- (BR) Brazil Feb Services PMI: 53.1 v 51.3 prior (4th month of expansion).

- (VE) US Pres Trump reportedly sends Interior Sec to Venezuela to push oil and mining - press.

- (VE) Trump Admin said to broker 'multi-million' dollar US-Venezuela gold deal with state-owned mining company for up to 1K kg of gold for US markets - Axios.

Europe

- (EU) European Union reportedly expects to be exempt from Trump’s new global 15% tariff - financial press.

- (UK) UKMTO: Received a report of an incident 30 NM southeast of Mulbarak Al Kabeer [Kuwait].

- (FI) ECB's Rehn (Finland): Reiterates ECB's meeting-by-meeting approach.

- (IE) Ireland Feb Unemployment Rate: 4.6% v 4.6% prior.

- (PL) Poland Central Bank (NBP) cuts base rate by 25bps to 3.75%; As expected.

- (CZ) Czech Central Bank Prochazka: May cut rates to 3.25% this year - interview.

Middle East

- (QA) Qatar said to fully shut gas liquefaction today; Will need 2 weeks to restart - press.

- (IR) Iran semi-official Tasim: Deny NYT report that Intel Ministry reached out to CIA for talks to end war.

- (IR) Treasury Sec Bessent: Everything regarding Iran is going magnificently; Had months and weeks of planning regarding oil and energy; Contingency plans have been in place for months and we will be reaching out to ship owners in coming days.

- (IR) Reportedly Iran will target Israeli's nuclear site of Dimona if Israel and US scheme for regime change - press.

- (IR) US Senate votes 53-47 to block war powers resolution that would have prevented additional Iran strikes without Congressional approval.

- (IR) Iran: No leniency towards any separatist action.

- (IR) Energy Sec Wright: 'When the time is right' US Navy will escort ships through the Straits of Hormuz - financial press.

- (IR) Iran launches new missiles, drones at US, Israeli targets - FARS.

- (IQ) Reportedly Iraq's power grid has been completely shut down across all provinces - press.

- (QA) Qatar Interior Ministry: Authorities are evacuating residents living in the vicinity of the US Embassy as temporary precautionary measure.

Levels as of 00:20 ET

Nikkei 225 +2.2%; ASX 200 +0.4%; Hang Seng +1.0%; Shanghai Composite +1.0%; Kospi +11.1%.

Equity S&P500 Futures -0.1%; Nasdaq100 -0.2%; DAX +1.7% FTSE100 +0.8%.

EUR 1.1648-1.1606; JPY 157.19-156.45; AUD 0.7090-0.7047; NZD 0.5949-0.5926.

Gold +0.6% at $5,174/oz; BTC +6.6% at $72,778, Crude Oil +3.9% at $77.57/bbl; Copper -0.1% at $5.8963/lb.