Trump dominates news, delays reciprocal tariffs

Asia Market Update: Trump dominates news; delays reciprocal tariffs; US-IN agreement; calls for RU, CN, IN to come together; Focus on Jan US Retail Sales.

- Pres Trump unveiled an outline of his much anticipated reciprocal tariffs plan. However, it was relatively short on details and will not take effect until April 1st, giving time for Commerce Sec Lutnick to address each country, one by one. The pause may allow markets’ focus to shift back to the developing momentum seen in global rates and equity markets.

- Currencies continued to gain v USD.

- Trump signed a high level agreement with Indian Pres Modi across defense, energy and trade routes, with a full agreement looking to be signed over next 7-8 months. Trump said there would be a 'great' trade route to run from India, Israel, Italy, and that the US deficit with India can be made up with sale of oil and gas, as well as SMR nuclear reactors, as India indicated purchases of US energy could go up to $25B ‘very soon’. The two sides also expressed interest in finding a way forward on tariffs. Modi himself said the target would be to double bilateral trade to $500B by 2030.

- Trump also continued to stamp his mark on a developing new epoch in international geopolitics by stating his hope that Russia, China, India "can all get along" and reemphasized that Europe has not carried its weight in terms of money. In a noticeable nod from a previously dismissive Europe during Trump’s first term, French President Macron endorsed Trump Admin's position that it was Europe's responsibility to ensure Ukraine's security, and in general described Trump's return as "a jolt to push the EU to invest in its own defense, economic and technological revival".

- Hang Seng outperformed Asia +2.4%, with Nikkei underperforming -0.8%.

- Japan BOJ on its way to replacing a dovish member with another potential hawk with academic Junko Koeda in line for final confirmation next Wed to assume board position Mar 26th.

- A former Reserve Bank of Australia manager said that the probability of a 25bps cut at the RBA's policy meeting next week is much less than the near-90% currently priced by markets.

- New Zealand 10-yrs +10bps 24 hours, against the trend of falling rates today in nearly all other developed nations. Yield rise was pared somewhat later. The rise was later justified by the NZ Jan Manufacturing PMI, which registered the first positive result in nearly two years and coming in 6 Big Figures higher than the prior month. NZ Food prices in January also increased markedly.

- US equity FUTs +0.1% during Asian trading.

Looking ahead (Asian time zone)

- Fri Feb 14th, (Fri night Jan US Retail Sales).

Holidays in Asia this week

- Tue 11th Japan.

- Wed 12th Thailand.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.1% at 8,549.

- Former RBA manager [unnamed]: RBA has a credible case to either cut or hold; More likely to cut, but could be hawkish cut - financial press.

- Australia BOM: Cyclone Zelia has made landfall as a category 5 system (as expected).

- New Zealand Jan Manufacturing PMI: 51.4 v 46.2 prior (1st month of expansion in 23 months).

- New Zealand Jan Food Prices M/M: 1.9% v 0.1% prior.

China/Hong Kong

- Hang Seng opens +1.0% at 22,027; Shanghai Composite opens -0.1% at 3,328.

- China PBOC balance sheet reduction does not mean tightening - Chinese press.

- China MOF sells 1-year, 10-year and 50-year Bonds.

- China Foreign Minister comments after meeting with the UK Foreign Sec: Both sides to seek cooperation in financial services, clean energy and AI.

- (UK) PM Starmer told China's Wang he wants consistent and respectful relations and deepen trade relations with China.

- China reportedly considers setting up national data group - press.

- China PBOC Q4 Monetary Policy Implementation Report: Will implement 'appropriately loose' monetary policy (**Note: prior language was 'moderately loose'); To keep interest rates and exchange rates in balance.

- China PBOC sets Yuan reference rate: 7.1706 v 7.1719 prior.

- China PBOC Open Market Operation (OMO): Injects CNY99B in 7-day reverse repos; Net drains CNY85B v prior drains CNY150B.

Japan

- Nikkei opens -0.1% at 39,419.

- Japan Lower House approves Junko Koeda (potential hawk) as BOJ board member; Awaits full endorsement in the legislature; To replace Seiji Adachi (dove) from Mar 26th, 2025.

- Japan Chief Cabinet Sec Hayashi: Will examine details of US reciprocal tariffs and respond appropriately.

- Japan releases weekly flows data [period ended Feb 7th]: Foreign buying of Japan equities: -¥384.4B v -¥315.2B prior; Japan buying of foreign bonds: +¥1.75T v -¥1.46T prior.

- Japan Economic Revitalization Min Akazawa: Will respond appropriately to US reciprocal tariffs - financial press.

- Japan sells ¥4.5T vs. ¥4.5T indicated in 3-Month Bills; Avg Yield: 0.3098% v 0.3110% prior; bid-to-cover: 2.91x v 3.13x prior.

- JAPAN SELLS ¥2.3TVS. ¥2.3T INDICATED IN 5-YEAR JGB BONDS; AVG YIELD: 0.9820% V 0.8760% PRIOR; BID-TO-COVER: 3.52X V 3.82X PRIOR.

Korea

- Kospi opens +0.2% at 2.588.

- South Korea Jan Import Price Index M/M: 2.3% v 2.3% prior; Y/Y: 6.6% v 6.8% prior.

- South Korea Jan Unemployment Rate: 2.9% v 3.2%e.

- Top diplomats from the US, Japan and South Korea plan to hold talks in Munich on Feb 15th [Sat] - US financial press.

- South Korea Acting Pres Choi: Sees limited impact from US reciprocal tariffs due to Free Trade pact; Will thoroughly prepare tariff responses by assessing vulnerabilities - press.

Other Asia

- Taiwan Pres Lai after meeting with senior officials: Working to ensure Taiwan remains an integral part of global supply chains; The US is Taiwan's most reliable trade partner - financial press.

- Malaysia Final Q4 GDP Q/Q: -1.1% v -1.3%e; Y/Y: 5.0% v 4.8%e
(US) Pres Trump: Announcement with India PM Modi on trade; India will be purchasing US oil and gas; Set target to double bilateral trade to $500B by 2030.

- Singapore Q1 Final GDP Q/Q: 0.5% v 0.8%e; Y/Y: 5.0% v 5.0%e.

- Philippines Central Bank (BSP) Gov: Would have cut rates if not for new factor of uncertainty we are facing.

- PHILIPPINES CENTRAL BANK (BSP) LEAVES OVERNIGHT BORROWING RATE UNCHANGED AT 5.75%; NOT EXPECTED.

- Philippine Central Bank (BSP) Gov Remolona: To consider keeping policy steady at the next meeting; any cut would be only 25bps - post rate decision press conference.

North America

- (US) Judge orders the Trump administration to restore funds for foreign aid programs - Politico.

- MCD Newly confirmed US HHS Sec Kennedy: McDonald's should be incentivized to use beef tallow - Fox news interview.

- (US) Treasury Secretary Bessent: If tariffs create inflation it would be a 'one-time' increase - media interview.

- (US) US Vice President Vance wields 'threat' of sanctions and military action to push Russia Putin into Ukraine deal - WSJ.

- (US) House Republicans reportedly strike deal on budget resolution ahead of committee vote; The agreement has to be approved by the Budget Committee as a manager’s amendment, but if it does then the House Freedom Caucus will back the resolution. - press (update).

- (US) President Trump: We will have reciprocal tariffs; VAT will be considered a tariff; Provisions will be made for non-monetary barriers, like FX and subsidies too; Commerce Sec Lutnick will address each country, one by one with studies to be done by April 1st.

- (US) CNBC's Javers: There will be some sort of time delay in reciprocal tariffs to be announced today; Will also be new details on potential exemptions.

- (US) JAN PPI FINAL DEMAND M/M: 0.4% V 0.3%E; Y/Y: 3.5% V 3.3%E; PPI (Ex Food and Energy) M/M: 0.3% v 0.3%e; Y/Y: 3.6% v 3.3%e.

- (US) INITIAL JOBLESS CLAIMS: 213K V 216KE; CONTINUING CLAIMS: 1.850M V 1.882ME.

- (CO) Colombia Central Bank Gov Villar: 3% inflation target allows for sustainable growth; Policy rate highly restrictive in recent years - speech text.

- (IN) US Trump Admin Official: Trump meeting with India's Modi aims to build on defense sales to ensure priority is on American tech; Aim to move forward signing a new India-US defense framework.

- (MX) Mexico's President Sheinbaum: Will file a civil suit against Google for changing 'Gulf of Mexico' name change, if necessary.

- (US) WEEKLY EIA NATURAL GAS INVENTORIES: -100 BCF VS. -94 BCF TO -96 BCF INDICATED RANGE.

- (US) (US) New York Fed Household Debt & Credit report: Q4 Household debt $18T, +0.5% q/q.

- (US) TREASURY $25B 30-YEAR BOND AUCTION DRAWS 4.748% V 4.6087% PRIOR; BID TO COVER 2.33 V 2.64 PRIOR AND 2.44 OVER THE LAST FOUR AUCTIONS.

- (US) Former Fed Pres Mester: No reason for Fed to move rates down at this point, and recent inflation data confirmed that - CNBC.

- (US) Reportedly White House to renegotiate the chips act awards; Payments to be delayed – press.

Europe

- (CH) Swiss National Bank (SNB) board member Tschudin: Maintaining price stability is SNB's most important task - financial press.

- (FR) France Pres Macron said to have described Trump's return as "a jolt to push the EU to invest in its own defense, economic and technological revival"; Endorses Trump Admin's position that it was Europe's responsibility to ensure Ukraine's security - FT.

- (EU) Foreign Policy Commissioner Kallas: Will continue to back Ukraine, any deal done will not be behind our backs.

- (UR) Ukraine Pres Zelenskiy: Ukraine will not accept any agreements that are reached between Russia and US without Ukraine.

- (UR) NATO Sec Gen Rutte: Never promised Kyiv NATO membership as part of peace deal.

Levels as of 00:20 ET

- Nikkei 225 -0.8%, ASX 200 +0.2%, Hang Seng +2.4%; Shanghai Composite +0.3%; Kospi +0.9%.

- Equity S&P500 Futures +0.1%; Nasdaq100 +0.1%; Dax +0.1%; FTSE100 -0.7%.

- EUR 1.0451-1.0471; JPY 154.45-153.15; AUD 0.6310-0.6328; NZD 0.5667-0.56495.

- Gold +0.4% at $2,956/oz; Crude Oil +0.2% at $71.44/brl; Copper +0.4% at $4.8040/lb.