RBA to extend QE program, AUD eases lower

Asia Market Update: Asia rises after gain on Wall Street, less volatility has been seen thus far; RBA to extend QE program, AUD eases lower; USD trades generally weaker, US politicians to continue stimulus talks.

General Trend

- Asia opened mostly higher, indices have generally extended gains; Tech firms trade generally higher after rise on the Nasdaq; Markets are currently off of the highs

- Australian Energy, Financial, Consumer Discretionary and Resources firms move higher, Consumer Staples lag

- Hang Seng TECH index tracks gain in the Nasdaq, Property index lags

- Alibaba to report results after the market close

- Consumer and Industrial firms were among the early gainers in Shanghai; Financials lagged

- Gainers in Japan include Iron/Steel, Auto, Marine Transportation, Electric Appliances and Information/Communication firms; Brokerage and Pharma cos. lag

- Japanese companies expected to report earnings include SMFG, Panasonic, Mitsubishi Motors, Konica Minolta; Sharp may also report results; Fast Retailing is due to report Jan Sales

- Silver FUTs decline by over 3% in Asia after prior gain

- RBA Gov Lowe is due to speak on Feb 3rd at 1:30 GMT (Wed)

- Companies expected to report during the NY morning include ConocoPhillips, Emerson Electric, Eaton Corp, W.W. Grainger, HCA, Harley Davidson, Manpower, McKesson, Marathon Petroleum, Pitney Bowes, Pfizer, Sirius XM, Sysco Corp, UPS, Exxon

Headlines/Economic Data

Australia/New Zealand

- ASX 200 opened 0.0%

- (AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 0.10%, AS EXPECTED; MAINTAINS 3-YEAR YIELD TARGET AT 0.10%; MAINTAINS A$100B BOND BUYING PROGRAM AND WILL PURCHASE ADDITIONAL A$100B IN BONDS WHEN CURRENT PROGRAM EXPIRES

- CCP.AU Reports H1 (A$) Net 42.3M v 38.6M y/y; Rev 188.0M v 190.9M y/y; All segments either met or exceeded expectations; Guides FY21 Net 85-90M (prior 70-85M); PDL acquisitions 310-330M (prior 270-330M)

- (AU) Australia total payroll jobs change for Jan 2-16th: +1.3% v -5.5% prior; Wages +1.3% v -7.7% prior

- TAH.AU Confirms have received approaches on Wagering and Media Business

Japan

- Nikkei 225 opened +0.4%

- (JP) Japan Chief Cabinet Sec Kato: Length of state of emergency will be determined based on expert opinion and infection situation

- (JP) Japan Fin Min Aso: Extending state of emergency could lead to more Govt spending

- 7974.JP Reports 9M Net ¥376.7B v ¥196.4B y/y; Op ¥521.1B v ¥262.9B y/y; Rev ¥1.40% v ¥1.02T y/y; raises all guidance

- (JP) Japan Fin Min Aso: Extending state of emergency could lead to more Govt spending

- (JP) Japan MoF sells ¥2.6T v ¥2.6T indicated in 0.1% 10-year JGBs; avg yield 0.0530% v 0.019% prior; bid to cover: 3.42x v 3.40x prior

- (JP) Former Bank of Japan (BOJ) deputy Gov Iwata: Expect that the BOJ will allow long term rates to move in a wider band around 0% target and cut purchases of super long bonds in order to steepen yield curve - Japan press

Korea

- Kospi opened +0.3%

- (KR) SOUTH KOREA JAN CPI M/M: 0.8% V 0.3%E; Y/Y: 0.6% V 0.5%E; CPI Core Y/Y: 0.9% v 0.8%e (4th month below 1%)

- (KR) South Korea Vice Fin Min Kim: To closely monitor markets due to potential volatility increase

- (KR) South Korea Ruling Party Chief Lee: Confirms preparing 4th cash handout for all South Korea citizens

China/Hong Kong

- Hang Seng opened +1.7%; Shanghai Composite opened %

- (CN) China Top Diplomat Yang: China has made strategic process on economy and COVID fight, US, China relations stand at a key moment, must restore ties to predictable and constructive, China is prepared to work with the US to move ties forward

- (CN) China said to be considering additional real estate curbs in first tier cities - Chinese press

- (CN) China PBOC Open Market Operation (OMO): Injects CNY80B in 7-day reverse repos v CNY100B in 7-day reverse repos prior; Net injects CNY78B v Net injects CNY98B prior

- (CN) China PBOC sets Yuan reference rate: 6.4736 v 6.4623 prior

North America

- (US) Republican Senator Collins: With other Republican senators had a productive and cordial meeting with President Biden, talks on package to remain ongoing at staff level

- ROBINHOOD.IPO CEO Tenev expected to testify before the the House Financial Services Committee on Feb 18th – press

- (US) Treasury Sec Yellen to meet with Senate Democrats tomorrow, Feb 2nd

- (US) White House Press Sec: US President Biden has productive discussions with Republican Senators on COVID relief; there are many areas where their [GOP] proposal does not address urgent issues

Europe

- (UK) PM Johnson reportedly pushing to reopen schools on March 8th amid declining COVID cases - UK press

- (UK) UK will need to install electric vehicle (EV) charging points 5x faster than current rate this decade to prepare for ban on sale of new gasoline vehicles starting in 2030 – press

- (DE) Germany Chancellor Merkel: concerned the virus might become more aggressive

Levels as of 12:15ET

- Hang Seng +1.2%; Shanghai Composite +0.7%; Kospi +1.4%; Nikkei225 +0.8%; ASX 200 +1.5%

- Equity Futures: S&P500 +0.5%; Nasdaq100 +0.6%, Dax +0.2%; FTSE100 +0.6%

- EUR 1.2088-1.2058; JPY 105.00-104.83 ;AUD 0.7662-0.7620; NZD 0.7179-0.7149

- Commodity Futures: Gold -0.4% at $1,856/oz; Crude Oil +1.1% at $54.12/brl; Copper -0.1% at $3.55/lb