Asia Market Update: Asian indices rise after US gains on Tuesday; US equity FUTs pare losses amid report Senate reached agreement on stimulus plan; RBNZ started bond purchases under QE program.


General Trend:

- Japanese REIT, Marine Transportation, Iron & Steel, Securities and Insurance indices are all moving higher by over 5%

- Automakers in Japan track the earlier strength seen in the US auto sector

- Nikkei-weighed Softbank rises by over 6%, adds to the gains seen on Monday and Tuesday’s sessions

- Shanghai Composite Consumer Discretionary index rises over 2.5% in early trading, most other sectors also move higher

- Sectors moving higher in Australia include Resources, Financial and Energy; Consumer Staples and Telecom sectors decline in Australia

- South Korea to ease the FX liquidity coverage ratios for banks, the move is seen as another attempt to reduce the shortage of foreign currency

- CME to launch new gold futures contract with expanded delivery; London Bullion Market Association (LBMA) is said to have offered support to the CME to facilitate the physical delivery of gold in NY


Headlines/Economic Data

Australia/New Zealand

- ASX 200 opened +1.8%

- VAH.AU Cuts domestic capcity by 90%, grounding additional 125 planes; keeping 10% domestic capacity for transportation of essential services, critical freight and logistics; to stand down 80% of workforce

- (NZ) Reserve Bank of New Zealand (RBNZ) proposes buying NZ$250M in govt bonds as part of QE

- (AU) Reserve Bank of Australia (RBA) offers to buy total of A$2.0B in bonds (target of A$2.0B) v A$4.0B prior

- (NZ) New Zealand Feb Trade Balance (NZ$): 0.6B v 0.5Be

- NUF.AU Reports H1 continued operations (A$) underlying net -114.5M v -50.7M y/y; underlying EBITDA -5.6M v +48.6M y/y; Rev 901.1M v 1.0B y/y

- (AU) Reserve Bank of Australia (RBA): Excess cash at exchange settlement (ES) accounts at A$53.6B v A$43.6B prior

- (AU) Reserve Bank of Australia (RBA) adds A$2.43B to banking system through repos v A$6.88B prior

- (NZ) Reserve Bank of New Zealand (RBNZ) purchases NZ$250M in bonds v NZ$250M sought (1st QE operations)

- (AU) Australia PM Morrison: Appointing Nev Power to lead coronavirus commission; National Cabinet to meet again Wednesday night, no press conference planned after

- (AU) Reserve Bank of Australia (RBA) to offer $10B in 84-day USD repo operation on March 26th


- Nikkei 225 opened +2.0%

- (JP) Bank of Japan (BOJ Summary of Opinions from March 16th emergency policy meeting: Appropriate for the Bank to enhance monetary easing, with a view to doing its utmost to ensure smooth corporate financing and maintaining stability in financial markets, thereby preventing firms' and households' sentiment from deteriorating


- 1605.JP To review investment plans and reduce costs due to coronavirus, do not know how long it will affect oil prices

- (JP) Japan Ruling Party (LDP) Senior Official: Desirable to have size of economic steps more than ¥56.8T in project base at the time of Lehman shock

- (JP) Japan Government Pension Fund (GPIF) said to make allocation changes to portfolio; including raising foreign bond allocation - financial press

- (JP) Bank of Japan (BOJ): Offers to sell ¥2.0T in JGBs in repo agreement that begins on March 31st; offers to sell ¥400B in JGBs in repo agreement that begins on March 26th


- Kospi opened +3.6%

- (KR) South Korea reports 100 additional coronavirus cases in the last 24-hours v 76 prior; Total 9,137 v 9.037 prior; total deaths 126 v 120 prior

- (KR) South Korea Fin Min Kim: Fair to say budget surplus achieved in 2019 has already been used up; Govt to relax liquidity coverage ratio rule for banks temporarily; govt will prepare various layers of tools to inject FX liquidity into the market

- 020560.KR Makes 10.5K employees take 15-days unpaid leave in April in response to coronavirus – Yonhap

- (KR) South Korea Fin Min Kim: Fair to say budget surplus achieved in 2019 has already been used up; Govt to relax liquidity coverage ratio rule, levy on currency borrowing for banks temporarily; govt will prepare various layers of tools to inject FX liquidity into the market

- (KR) Bank of Korea (BOK) to supply USD liquidity next week via swap line with US - press

China/Hong Kong

- Hang Seng opened +2.6%; Shanghai Composite opened +1.9%

- (CN) China National Health Commission Coronavirus Update for March 24th: 47 additional cases (all imported) v 78 prior; Additional deaths: 4 v 7 prior; Hubei: 0 additional cases v 1 prior; additional deaths: 3 v 7 prior

- (CN) China President Xi to participate virtual G20 summit on March 26th

- (CN) China PBOC sets Yuan reference rate: 7.0742 v 7.0999 prior

- (CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations for the 26th consecutive session, Net CNY0B v CNY0B prior

- (CN) China PBOC to conduct CNY5.0B central bank bill swap (CBS) operation on today's session v CNY5.0B prior at 2.35% v 2.35% prior

- (CN) China NDRC: Encourages China local govts to stockpile poultry and aquaculture products temporarily

- (CN) China PBOC in talks to cut rate that banks pay on savings accounts - FT

North America

- (US) Weekly API Crude Oil Inventories: -1.3M v -0.4M prior

- (US) President Trump: Reiterates would be great to open by Easter, looking at data - coronavirus update; won't hesitate to invoke Defense Production Act

- (US) White House economic adviser Kudlow: Stimulus bill would be the single largest main street assistance package in the history of the US

- (US) President Trump considering a 90-day deferral of tariffs on all imported goods from "around the world" - US Financial Press

- BA Said to plan to restart 737 Max production by May - financial press

- (US) TTN March 24th Avg Traffic Intensity Index in Select US cities y/y: 9.0% v 8.8% prior (1st increase in 9 days)


- (IT) Italy PM Conte: denies reports that lockdown will be extended to July 31st; lockdown will be lifted well before then; Hope very soon to be able to loosen lockdown restrictions

- TKA.DE Reaches agreement with union, IG Metall, to cut 3,000 jobs at its steel unit due to coronavirus


Levels as of 1:15ET

- Hang Seng +1.6%; Shanghai Composite +1.4%; Kospi +3.5%; Nikkei225 +6.4%; ASX 200 +5.5%

- Equity Futures: S&P500 -1.5%; Nasdaq100 -1.9%, Dax -0.7%; FTSE100 +0.4%

- EUR 1.0824-1.0761; JPY 111.56-110.75 ;AUD 0.6035-0.5937; NZD 0.5884-0.5795

- Commodity Futures: Gold +0.5% at $1,668/oz; Crude Oil+3.3 % at $24.77/brl; Copper -0.9% at $2.18/lb

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