PBOC expected to cut loan prime rates on Thursday

Asia Market Update: Asian indices trade generally higher after losses on prior session, US markets closed off of session lows; Shanghai trades near the 3,000 level, PBOC expected to cut loan prime rates on Thursday.

General Trend:

- Apple suppliers trade generally higher in Asia after losses on prior session

- Early gainers in Shanghai include IT companies and financials

- HK gaming companies move generally higher in early trading, Macau has said casinos can reopen on Thursday (Feb 20th) but the process could also be delayed

- Commonwealth Bank’s ex-dividend weighs on financial sector in Australia; Consumer Discretionary index outperforms amid earnings from Wesfarmers

- Gainers in Japan include electronics and drug companies

- Japan’s Jan exports had the slowest decline since July

- PBOC set the yuan weaker than the ‘7’ level against the USD for the first time since Dec 25th

- Aussie Q4 wage data was in line with expectations, public sector wage growth was the lowest since the commencement of the index in 1997; Aussie Jan jobs data due on Thursday

Headlines/Economic Data

Australia/New Zealand

- ASX 200 opened -0.1%

- (NZ) Reserve Bank of New Zealand (RBNZ) Gov Orr: Economy and policy are in a good position especially employment and inflation it at the midpoint; ORC while low is still higher than other countries - speaking at parliament

- CTX.AU Receives A$3.9B cash and share offer from EG Group (A$15.62/shr and 1 share in Ampol for every Caltex share held) for convenience retail business

- FMG.AU Reports H1 Net $2.45B v $644M y/y, underlying EBITDA 4.23B v 1.63B y/y; Rev $6.49B v $3.54B y/y

- WES.AU Reports H1 (A$) adj Net 1.13B v 1.1B y/y; adj EBIT 1.73B v 1.6B y/y; Rev 15.3B v 14.4B y/y (post AASB 16)

- WBC.AU Gives Q1 update: CET1 capital ratio 10.8% v 10.7% q/q; Guides FY20 Expect to incur additional expenses associated with work in regards to regulatory investigation

- (AU) AUSTRALIA Q4 WAGE PRICE INDEX Q/Q: 0.5% V 0.5%E; Y/Y: 2.2% V 2.2%E

- (AU) Australia prices A$2.0B in May 21 2.75% 2041 bonds through syndication, yield to maturity 1.535%, bid to cover: 3.05x

Japan

- Nikkei 225 opened +0.6%

- (JP) Japan Govt expected to maintain assessment that the economy is recovering in its monthly report Thursday may make slight tweaks to language to describe the economy as "recovering moderately despite continued weakness in exports" - press

- (JP) JAPAN DEC CORE MACHINE ORDERS M/M: -12.5% V -8.9%E; Y/Y: -3.5% V -0.7%E

- (JP) JAPAN JAN TRADE BALANCE: -¥1.31T V -¥1.68TE (14th consecutive trade deficit); ADJ TRADE BALANCE: -¥224.1B V -¥550BE; Exports Y/Y: -2.6% v -7.0%e (best reading since July)

- 2802.JP Targeting to keep dividend payout ratio ~40% or raise in the future; see max ¥600M in costs if China plants remain closed for 3-months

Korea

- Kospi opened +0.6%

- (KR) South Korea Fin Min Hong: will provide liquidity to exporters impacted by virus; planning to announce prelim stimulus measures by the end of Feb - Yonhap

China/Hong Kong

- Hang Seng opened -0.2%; Shanghai Composite opened -0.2%

- (CN) China govt policy adviser Zhang Yansheng: China may adjust 2020 GDP growth target due to coronavirus [in line with prior speculation] – SCMP

- (CN) US State Dept imposes restrictions and new requirements on 5 Chinese media outlets operating in the US including Xinhua and the China Daily

- (CN) China Hubei province coronavirus update for Feb 18th: 1.7K additional cases v 1.8K prior, Additional deaths 132 v 93 prior

- (CN) China National Health Commission Coronavirus Update for Feb 18th: 1.7K additional cases v 1.9K prior; Additional death 136 v 98 prior

- (CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations for the 2nd consecutive time, Net drain CNY0B v drains CNY220B prior

- (CN) China PBOC sets Yuan Reference Rate: 7.0012 v 6.9826 prior (First setting above 7 since Dec 25th)

- (CN) China considering using cash injections and mergers in order to support airlines

- (CN) China sets first batch of 2020 rare earth mining quota at 66.0K metric tonne v 60K y/y

Other

- (SG) Singapore Fin Min Heng: Global impact of coronavirus remains unclear; must prepare for economic impact that could be worse than expected; To introduce two special packages valued at SG$5.6B to support jobs and cost of living - budget speech

- (SG) Singapore Fin Min Heng: We have enough firepower to tackle impact of coronavirus

North America

- BA Plans to inspect undelivered 737 MAX aircraft for 'foreign object debris' – CNBC

- (US) DEC NET LONG-TERM TIC FLOWS: $85.6B V $22.9B PRIOR TOTAL NET TIC FLOWS: $78.2B V $73.1B PRIOR

- A Reports Q1 $0.81 v $0.81e, Rev $1.28B v $1.35Be; Affirms FY guidance

- (US) Attorney General (AG) Barr said to have considered quitting over Trump tweets about ongoing cases - Washington Post

Europe

- (NL) Netherlands Foreign Investment Agency: 140 companies have moved to the Netherlands since Brexit - UK press

Levels as of 12:15ET

- Hang Seng +0.3%; Shanghai Composite +0.2%; Kospi -0.2%; Nikkei225 +1.0%; ASX 200 +0.4%

- Equity Futures: S&P500 +0.3%; Nasdaq100 +0.3%, Dax +0.3%; FTSE100 +0.3%

- EUR 1.0804-1.0791; JPY 110.09-109.86; AUD 0.6702-0.6683; NZD 0.6401-0.6385

- Commodity Futures: Gold +0.1% at $1,605/oz; Crude Oil +0.9% at $52.77/brl; Copper +0.3% at $2.62/lb