NZ GDP lower than expected

Asia Market Update: Trade tariff tensions continue to weigh on markets; NZ GDP lower than expected; stronger yen weighs on exporters

Headlines/Economic Data

General Trend:

- Asian equity markets generally pare losses

-Financials continue to be weighed down by decline in bond yields

-Cathay Pacific Airways [293.HK] rises over 9% in the aftermath of FY17 earnings

-South Korea sold more than indicated amount of 50-year bonds

-New Zealand Q4 GDP misses ests: Stats Bureau notes impact of hot summer on agricultural sector

-There are concerns that Moritomo scandal could delay approval of BoJ Deputy Gov candidates (Japan Press)

-Foreign investors have continued to sell Japanese equities, according to weekly data

-USD/JPY falls below 106, at the same time Nikkei 225 hit fresh low, while S&P futures weakened

Japan

-Nikkei 225 opened -0.3%; closed +0.1%

-TOPIX Real Estate Index +0.7%; Securities -1%

-Mega-banks track weakness in US financials

- (JP) BoJ said to start to worry that political scandal could leave two deputy gov seats vacant - Japanese Press

- (JP) Nikkei looks at Spring wage increase in Japan, noting most have offered a modest increase, lower than PM Abe's target of 3%

- (JP) BoJ may have declined to issue conditions for yield-curve control (YCC) target adjustment in order to give it flexibility in policy decisions – Japanese Press

- (JP) Japan Govt will change drug approval regulations to give approvals without human testing if it has enough data to back up efficacy – press

- (JP) There is renewed press speculation that Finance Min Aso will not attend G20 - Japanese Press

-(JP) Japan MoF sells ¥1.0T v ¥1.0T indicated in 0.50% (prior 0.60%) 20-yr bonds; avg yield 0.5430% v 0.5610% prior; bid to cover 4.47x v 4.44x prior

-(JP) BoJ Gov Kuroda: Japan has been implementing strong QE; inflation has been steadily rising in the last 2-yrs

-(JP) Japan Fin Min Aso: Have to make use of low interest rate environment

-(JP) Japan ruling party Diet affairs official: Fin Min Aso to skip G20 finance chief meeting next week. Aso is scheduled to participate in a session of the Budget Committee of the House of Councillors on Monday to answer questions from lawmakers.

-(JP) Japan Parliament Lower House to vote on BOJ nominees tomorrow

Korea

-Kospi opened flat

- (KR) South Korea and China to hold FTA service and investment talks on March 22-23

- (KR) Bank of Korea (BoK) Gov Lee: Reiterates inappropriate to link policy and governor reappointment

- (KR) South Korea sells KRW325B v KRW300B indicated in 50-year bonds at 2.64%

China/Hong Kong

-Hang Seng opened -0.8%, Shanghai Composite -0.4%

- Hang Seng Property/Construction Index +0.4%; Energy -1.1%

- (CN) China regulators considering reform of airline fuel surcharge

- (CN) PBOC sets yuan reference rate at 6.3141 v 6.3205 prior

- (CN) China PBoC Open Market Operation (OMO): Injects CNY40B v CNY50B prior in 7 and 28-day reverse repos; Net injection CNY40B v CNY50B prior

Australia/New Zealand

-ASX 200 opened flat; closed -0.2%

- ASX 200 Financials Index -0.9%, Energy -0.7%

- (NZ) NEW ZEALAND Q4 GDP Q/Q: 0.6% V 0.8%E; Y/Y: 2.9% V 3.1%E

- (AU) Australia ACCC released its Interim Report into residential mortgage products: Mortgage pricing in Australia is not strongly competitive

-Aurizon, AZJ.AU Australia ACCC raises concerns about Pacific National's proposal to acquire intermodal assets

- (AU) Australia Mar consumer Inflation Expectation: 3.7% v 3.6% prior

- (AU) Australia Feb RBA Govt FX Transactions (A$): -438M v -634M prior

Looking Ahead: RBA Assistant Gov Debelle due to speak on Friday

Other Asia

- (ID) Indonesia reported 3rd consecutive trade deficit in Feb; exports missed expectations

- (TW) Taiwan Central Bank Gov Yang Chin-Long: No need to set inflation target; FX market less predictable since US President Trump

North America

-US equities ended lower, Dow and S&P closed down for 3rd straight session: Dow -1%, S&P500 -0.6%, Nasdaq -0.2%, Russell 2000 -0.5%

-S&P500 Materials -1.2%, Financials -1.1%, Industrials -1.1%; Utilities +1%

-(US) White House confirms Larry Kudlow has accepted the position of NEC chairman

-(US) Incoming White House economic advisor Kudlow: would like to see the dollar "a wee bit stronger"; No one has ever devalued their currency into prosperity - CNBC interview

-(US) Commerce Sec Ross: Will soon publish rules on tariff exemptions

-(US) Sources say Pres Trump has discussed a plan to fire Attorney General Jeff Sessions - Vanity Fair

-(US) DOE CRUDE: +5.0M V +2.5ME

Europe

- (EU) EU said to consider 3% tax on the revenues of technology companies - US financial press

- (EU) ECB's Coeure (France): Euro area growth relies too much on monetary support; ECB stimulus will add one third of a percentage point to 2018 GDP growth this year

-(UK) CEOs from some of UK's leading corporations to meet with UK PM May on Thurs to discuss concerns about Brexit - Sky News

Looking Ahead: Swiss National Bank (SNB) due to hold rate decision, IEA expected to release monthly report

Levels as of 01:00ET

- Hang Seng -0.1%; Shanghai Composite -0.5%; Kospi +0.3%

- Equity Futures: S&P500 +0.1%; Nasdaq100 +0.1%, Dax +0.2%; FTSE100 +0.1%

- EUR 1.2383-1.2365; JPY 106.36-105.78; AUD 0.7885-0.7863;NZD 0.73-0.73

- Apr Gold +0.1% at $1,326/oz; Apr Crude Oil 0.0% at $60.97/brl; May Copper -0.2% at $3.14/lb