Trump recaps five weeks; Focus on US Feb ISM services

Asia market update: Much news but little price action in Asia; CN NPC targets inline; Trump recaps 5 weeks; Focus on US Feb ISM Services.

General trend

- Lots of news in Asia session, but the majority of volatility took place in the prior US trading session where stocks whipsawed down and up, and JPY gave back much of its gains in recent days, as much as 3 Big Handles against the Euro.

- After the NY cash close but before the Asian open US Commerce Sec Lutnick said he believed Trump will meet Mexico and Canada “in the middle on tariffs”, however, other reporting indicated Trump’s basic stance on tariffs is not changing.

- Equity FUTS pared gains pre -Trump address to Congress (NASDAQ FUTS up >0.8% earlier, then back to >0.4%).

- US Pres Trump's address to Congress saw a medley of Greatest Hits as retold by the President for the first 5 weeks of his Administration. Reiterated reciprocal tariffs to come from Apr 2nd.

- China annual National People’s Congress (NPC) confirmed to again aim for ~5% GDP growth, with target CPI of ~2% (as expected) and 2025 budget deficit at 4% of GDP (as expected). Various support for sectors such as AI, NEVs and other new technologies, as well as property sector (Mainland Properties +2%).

- China extended the US agriculture and food products retaliatory tariffs announced late in the Asia session yesterday to also include the halting of US lumber imports.

- Trump-led geopolitics combined with business to see Chinese influence over the Panama Canal significantly reduced as CK Hutchison’s (HK) port holdings will sell 90% of its stake to Blackrock, bringing the key ports on both sides of the canal under American control.

- RBNZ Gov Orr unexpectedly tendered his resignation (effective Mar 31st); NZ 10 yields up +12bps and kiwi dollar -0.2%.

- Japan BOJ Gov Ueda and Dep Gov Uchida both spoke, but added no new color to the overall projection of the likely interest rate path for BOJ this year. JPY stabilized in the Asia session, and prior to the speeches JP yields gained another 2-3bps, with JP 10-yrs 1.45%.

- Australia focuses on approaching Tropical cyclone Alfred, which may make landfall in Brisbane around Thursday or Friday in what could be the strongest cyclone to hit the area in 35 years. Brisbane is home to >2.5M residents.

- South Korea and Australia Q4 GDP figures were inline with expectations.

- China Feb Caixin PMI Services saw its 25th consecutive expansion.

- US equity FUTs +0.6% to +0.7% during Asian trading.

Looking ahead (Asian time zone)

- Wed Mar 5th (Wed night US Feb ISM Services + Fed Beige Book).

- Thu Mar 6th KR Feb CPI , CN NPC continues, (Thu night EU rate decision.

- Fri Mar 7th CN Jan-Feb Trade Bal, (Fri night US Feb NFP).

Holidays in Asia this week

- Mon Mar 3rd South Korea.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens -0.3% at 8,172.

- Australia Q4 GDP Q/Q: 0.6% V 0.6%E; Y/Y: 1.3% V 1.3%E.

- Australia Feb Final PMI Services: 50.8 v 51.4 prelim (confirms 13th month of expansion).

- RBA Dep Gov Hauser: Board does not see a string of cuts as likely; Board to keep taking decisions meeting by mee.

- Australia Foreign Min Wong: US tariffs on Australian Steel, Aluminum are not 'inevitable'.

- Australia Treasurer Chalmers: Working toward delivering a March 25th budget (ahead of Federal elections, TBD).

- Insurance Australia: Tropical cyclone Alfred currently expected to make landfall between Brisbane and Sunshine Coast; Brisbane is home to >2.5M residents).

- Australia sells A$800M v A$800M indicated in 4.25% Mar 2036 bonds, Avg Yield: 4.4074%, bid to cover 3.37x [first offering in this series].

- New Zealand Feb ANZ Commodity Price M/M: 3.0% v 1.8% prior.

- RBNZ GOV ORR said to resign - US financial press.

- Fonterra Global Dairy Trade Auction Dairy Trade price index: -0.5% v -0.6% prior [overnight update].

China/Hong Kong

- Hang Seng opens +1.1% at 23,200; Shanghai Composite opens flat at 3,324.

- *(CN) Ccina National  Peoples' Congress (NPC): Sets 2025 GDP growth target "~5.0%" (V ~5.0% in 2024); seta 2025 CPI target at ~2.0% (V ~3.0% IN 2024).

- China FEB CAIXIN PMI services: 51.4 V 50.7E (25th month of expansion).

- (US) Kevin Hassett Dir of White House National Economic Council: If Fentanyl emergency were ended, so would the tariffs.

- China Education Min Huai Jinpeng: To issue AI education white paper in 2025.

- (US) China releases white paper on controlling fentanyl-related substances: To monitor production, imports and exports of fentanyl – press [overnight update].

- China customs: China halts imports of US lumber; effective immediately; also suspends imports of soybeans from three US firms [overnight update].

- 1.HK BlackRock acquires 90% stake in CK Hutchison port holdings on both sides of the Panama Canal for $14B at EV of $23B; The deal would bring the key ports under American corporate ownership, from Hong Kong-based CK Hutchison. [overnight update].

- China Commerce Ministry (MOFCOM) launches anti-circumvention investigation on some US single-mode fibre optic products – press [overnight update].

- China PBOC sets Yuan reference rate: 7.1714 v 7.1739 prior.

Japan

- Nikkei 225 opens +0.2% at 37,416.

- Japan Feb Final PMI Services: 53.7 v 53.1 prelim (confirms 4th month of expansion).

- Bank of Japan (BOJ) Dep Gov Uchida: Reiterates to adjust rates if outlook is realised - speech.

- BOJ Gov Ueda: Resilience of Asia emerging market economies to be test by rising geopolitical tensions.

- Japan Industrial Union [UA Zensen]: Member unions’ average wage demand request in this year's wage negotiations stands at 6.11% - US financial press.

- Japan PM Ishiba: Stable energy supply from the US will benefit Japan - Japanese press.

- Japan Fin Min Kato: Reiterates has spoken about FX with US counterpart - financial press.

- Japan Trade Min Yoji Muto reportedly plans US visit as soon as Mar 10th – press [overnight update].

- Japan Lower House said to approve revised budget for FY25 - financial press [overnight update].

- Uniqlo: Reports Feb domestic Uniqlo SSS: +12.2% y/y [overnight update].

- Bank of Japan (BOJ) announcement related to outright bond buying operations: <1 Year; 1-3 Years; 3-5 Years; 10-25 Years (Reduced purchase amounts inline with Dec guidance).

Korea

- Kospi opens +0.8% at 2,548.

- SOUTH KOREA Q4 PRELIMINARY GDP Q/Q: 0.1% V 0.1%E; Y/Y: 1.2% V 1.2%E.

- South Korea announces KRW50T fund for national strategic industries - financial press.

Other Asia

- Hong Kong Feb PMI (whole economy): 49.0 v 51.0 prior.

- Singapore Feb PMI (whole economy): 51. 0 v 49.9 prior.

- Singapore Feb Purchasing Managers Index (PMI): 50.7 v 50.9 prior (17th month of expansion) [overnight update].

- (TW) US official: Taiwan should increase defense spending ~10% of GDP to deter Chinese invasion – press [overnight update].

- (ID) Indonesia Central Bank (BI): Renews bilateral FX swap agreement with the RBA [overnight update].

North America

- (US) Pres Trump's address to Congress: "America is back!"; China, India and South Korea tariffs are 'high'; reiterates reciprocal tariffs on Apr 2nd.

- (US) Energy Sec Chris Wright: Should see drift downwards in oil prices - comments after Trump address to Congress.

- (US) Trump Admin said to be ready to bolster US shipbuilders with Exec Order, and also 'punish' China - WSJ.

- (US) Trump said to have 'signaled' privately that he is going to 'stick with tariffs' – NYT.

- Canada and US officials reported to be in talks to possibly roll back Trump's tariffs - WSJ.

- (CA) Canada Fin Min: Federal government will soon announce initial package of supports to mitigate impact of US tariffs.

- (US) Commerce Sec Lutnick: Believe Trump will meet Mexico and Canada in the middle on tariffs; Tariffs compromise announcement will likely come tomorrow - Fox Business interview.

- (US) Treasury Sec Bessent: US to become major exporter of energy; We are set on bringing interest rates down.

- (MX) Mexico Pres Sheinbaum: Will announce countermeasures on Sunday, Mar 9th; No reason or justification for US tariff decision; US also needs to take responsibility for opioid crisis; Will likely talk to US Pres Trump on Thurs (March 6th).

- (US) Commerce Sec Lutnick: Current tariff policy is predicated on bringing down opioid deaths; April 2nd will be a trade reset and the two sets of tariffs should be thought of separately - CNBC.

- (CA) Canada PM Trudeau: To impose 25% tariffs on another C$125B of US imports in 21 days' time; Canada will challenge US tariffs via WTO and USMCA; Has tried to speak with Pres Trump in past few days, expects to talk in coming days.

- (US) Fed's Williams (voter): Details of tariffs are key to understanding; There's still a lot of uncertainty over how tariffs will play out; Will see some inflation impact from tariffs; Beginning to factor in tariff impact on prices.

- Canada PM Trudeau: To impose 25% tariffs on another C$125B of US imports in 21 days' time; Canada will challenge US tariffs via WTO and USMCA; Has tried to speak with Pres Trump in past few days, expects to talk in coming days.

- (UR) US Sec Bessent: 'There's no signing planned' for minerals deal with Ukraine - press.

- (UR) US and Ukraine said to plan to sign minerals deal; US Pres Trump reportedly told advisers he wants to announce successful Ukraine minerals deal during Tues speech to Congress – press.

- Google reportedly pushes Trump's DOJ to reverse course on breaking up company.

Europe

- (IE) Ireland Feb PMI Services: 53.2 v 53.4 prior (47th month of expansion).

- (UR) Ukraine PM Shmyhal: Will continue 'calm' work with US to secure peace and we are ready to sign minerals deal; Will continue diplomatic work with US via all available channels.

- (PL) Poland Defense Min Kosiniak: Hope US pause on Ukraine aid does not last long.

- (IR) Reportedly US Pres Trump tapped Russia Pres Putin to broker Iran Nuclear talks; Russia agreed to assist - press.

- (DE) Bundesbank: Germany structural deficit could be 1.4% of GDP in new plan as long as debt is <60% of GDP (prior: 0.35%); Debt brake proposal attempts to facilitate investment; Plan may allow for €220B of extra spending through 2030.

- (UK) Chancellor Reeves: We're not naive, it won't be easy to secure a US trade deal, but every reason to be hopeful.

- (UR) Pres Zelenskiy: Ready to work under US Pres Trump's leadership to bring peace; Ready to sign minerals and security deal in "any time and convenient format"; Ready to work fast to end the war.

- (DE) Germany CDU Party Leader Merz: First results have been reached in talks with SPD; Govt plans reform of debt brake to allow for more defense funds; Special €500B fund to be presented next week.

Levels as of 00:20 ET

- Nikkei 225 +0.3%, ASX 200 -0.7%, Hang Seng +0.8%; Shanghai Composite +0.1%; Kospi +0.9%.

- Equity S&P500 Futures +0.6%; Nasdaq100 +0.7%; Dax -0.1%; FTSE100 -0.5%.

- EUR 1.0602-1.0638; JPY 149.58-150.18; AUD 0.6234-0.6280; NZD 0.5638-0.5669.

- Gold +0.1% at $2,921/oz; Crude Oil -0.8% at $67.75/brl; Copper +1.0% at $4.6265/lb.