US equity FUTs and USD lag in Asia – UST yields decline

Asia market update: US equity FUTs and USD lag in Asia; UST yields decline; traders search for specific catalysts; Recent US growth concerns in focus; CN deflation fears remain; Tariff concerns will also not go away; USD and equity FUTS later pare losses.

General trend

- US President Trump will not predict whether recession could result from tariffs, said the economy faces 'transition'; cites comments made on Fox News' Sunday Morning Futures – financial press.

- Asian equities trade mixed overall; Hang Seng underperforms.

- JGB yields remain higher amid bond auction results.

- USTR to hold meeting on March 11th regarding China's efforts to dominate the semiconductor industry.

- Japan Trade Min reportedly plans US visit as soon as Mar 10th - press.

- China NPC is due to end on Mar 11th [Tues].

- Taiwan Semi monthly sales due later today.

- China Feb bank lending data also in focus.

- US CPI data is due on Mar 12th.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens flat at 7,951.

-Australia PM Albanese plans to hold national vote [elections] in May, confirms to announce the budget later in Mar – US financial press [**Reminder: Election must be held by May, 2025].

-Rio Tinto [RIO.AU]: Said to cancel plans for share sale for up to $5B following pushback from investors - press.

China/Hong Kong

- Hang Seng opens -0.5% at 24,115.

- Shanghai Composite opens flat at 3,373.

- China Feb CPI Y/Y: -0.7% v -0.5%e [largest decline since Jan 2024]; PPI Y/Y: -2.2% v -2.1%e v -2.3% prior (29th month of negative readings).

- (CN) Pres Xi: Will make good use of local resources for military [Mar 7th].

- China Housing Minister reiterated to step up lending for 'White List' projects - Press.

- China Feb Foreign reserves: $3.227T V $3.229TE [Mar 7th].

- China PBOC sets Yuan reference rate: 7.1733 v 7.1705 prior.

- China PBOC Open Market Operation (OMO): Injects CNY96.5B in 7-day reverse repos; Net drains CNY0.5B v drains CNY100B prior.

-  China MOF auctions 1-month deposits at 2.08%.

- China MOFCOM: Will impose tariffs on some imports from Canada in retaliation for Canadian tariffs on Chinese goods; Effective March 20th.

- CN) Reminder: China retaliatory tariffs on US farm goods take effect on Mon (Mar 10th) [Mar 4th: (CN) CHINA ANNOUNCED TRADE COUNTERMEASURES ON THE US (as expected); To impose up to 10% and 15% tariffs on some US goods and place more US companies on entity and export control lists; To take effect Mar 10th].

Japan

- Nikkei 225 opens +0.2% at 37,003.

- Japan Jan labor cash earnings Y/Y: 2.8% V 3.0%E; Real Cash Earnings Y/Y:-1.8% v -1.6%e; Scheduled Full-Time Pay - Same Base Y/Y: 3.0% v 2.8% prior.

- Japan Feb Bank Lending Y/Y: 3.1% v 3.0% prior.

- Japan sells ¥2.3T VS. ¥2.3T indicated in 1.100% 5-year JGB bonds; AVG yield: 1.1570% V 0.9820% prior; Bid-to-cover: 3.17X V 3.52X prior [lowest BTC since Jun 2022].

- Japan 10-year JGB yield rises to 1.565% [highest since Oct 2008].

- Japan Jan Current Account: -¥257.6B v -¥230.5Be [first deficit in 2 years]; Adjusted Current Account +¥1.94T v +¥1.987Te.

- Japan Jan Preliminary Leading Index CI: 108.0 v 108.2e; Coincident Index: 116.2 v 116.3e.

- Mizuho Financial [8411.JP]: To raise long-term prime rate by 15bps to 2.35%.

- More press reports that BoJ leans to rate pause at March meeting; wants to monitor effect of January rate hike - Press [Mar 7th].

Korea

- Kospi opens -0.3% at 2,555

- South Korea acting President Choi: Reiterates to consult with the US about cooperation in shipbuilding and energy sectors; To review non-tariff measures related to US reciprocal tariffs.

- KDI: South Korea economy faces increasing downside risks amid construction slump and trade tariffs.

- North Korea unveils nuclear powered submarine under construction for the first time; Appears capable of carrying 10 missiles - Nikkei.

Other Asia

- Foxconn [2317.TW]: Hon Hai Research Institute launches traditional Chinese LLM - US financial press; Notes the Chinese large language model has 'reasoning capability'.

North America

- US equity FUTS open lower: Nasdaq FUTs -0.7%, S&P 500 FUTs -0.5%.

- US President Trump will not predict whether recession could result from tariffs, said the economy faces 'transition'; cites comments made on Fox News' Sunday Morning Futures – financial press.

- (US) President Trump: US government funding 'lapse' probably will NOT happen; confirms looking at 'a lot' of things in regards to Russia tariffs; dealing with 4 different groups on TikTok.

- President Trump to sign executive orders on Mon at 3 pm ET; to hold roundtable with Tech CEO council at 2 pm ET on Mon.

- US Commerce Sec Lutnick affirmed President Trump is sticking to aluminum-steel tariff timeline – US financial press.

- (US) Fed Chair Powell: Tariffs driving near-term inflation expectations higher; Fed can maintain policy restraint for longer if inflation progress stalls, or if labor market unexpectedly weakens of inflation falls more than expected - speech text [Mar 7th].

- (US) DOJ begins probe into potential egg price fixing – Press.

- (US) Feb change in Nonfarm Payrolls: +151K V +160KE [Mar 7th].

- (US) Feb unemployment rate: 4.1% V 4.0%E [Mar 7th].

- Google [GOOGL]: DOJ drops proposal to force Alphabet's Google to divest its investments in AI companies in antitrust case over online search dominance - press.

- (US) OCC rescinds prior guidance, says banks can now engage in certain crypto-asset activities; intended to reduce burden, encourage responsible innovation, and enhance transparency [Mar 7th].

- Checkpoint Therapeutics [CKPT]: Sun Pharmaceuticals: To acquire Checkpoint Therapeutics at $4.10/share upfront payment totaling $355M [~66% premium vs prior closing price].

- (CA) Mark Carney wins race to become next Canada PM (as expected), he is expected to be sworn in as PM 'within days'.

Europe

- US ends waiver allowing Iraq to buy electricity from Iran - Press.

Levels as of 01:20 ET

- Nikkei 225, +0.3%, ASX 200 +0.2% , Hang Seng -2.4%; Shanghai Composite -0.8% ; Kospi +0.4%.

- Equity S&P500 Futures: -0.5%; Nasdaq100 -0.6%, Dax +0.5%; FTSE100 -0.3%.

- EUR 1.0871-1.0818 ; JPY 148.05-147.09 ; AUD 0.6320-0.6295 ;NZD 0.5728-0.5697.

- Gold +0.1% at $2,916/oz; Crude Oil -0.6% at $66.65/brl; Copper -0.7% at $4.6788/lb.