Asian currencies trade broadly lower as yuan weakens

Asia Market Update: Concerns about spread of Chinese virus continue to weigh on Asian tourism-related companies, global equity futures decline led by Hang Seng Futures; Asian currencies trade broadly lower as yuan weakens.

 

General Trend:

- Equity markets in Hong Kong and Shanghai underperform amid concerns about coronavirus spread on the upcoming Lunar New Year Holiday

- Gaming firms, airlines, financials and property companies weigh on the Hang Seng; Telecoms drop after gains on Monday

- L’Occitane expected to release Q3 trading statement later today

- Property, Consumer and Financial firms are among the biggest decliners in Shanghai, healthcare index rises over 1%

- Chinese electric vehicle maker BYD declines over 3% after recent gains, Aussie lithium-related companies also trade generally lower; Chinese official commented on NEV subsidies on Monday

- Energy and Resource companies are among the decliners in Australia

- BHP declines less than 1% after quarterly production update and FY guidance, noted energy coal production was impacted by bushfires in Australia

- Japanese equities decline amid the rise in the Yen, sectors moving lower include Marine/Transportation and Iron/Steel

- Tokyo Steel is expected to report its earnings after the market close

- Bank of Japan (BOJ) raised its growth forecasts (as speculated), noted overseas downside risks have decreased somewhat

 

Headlines/Economic Data

Australia/New Zealand

- ASX 200 opened -0.1%

- BHP.AU Reports Q2 Waio iron ore production: 68.0Mt v 66Mt y/y, attributable iron ore production 60.4Mt v 57.8Mt y/y; Affirms all FY20 guidance

- (NZ) New Zealand Dec Performance of Services Index: 51.9 v 52.9 prior (lowest reading since Sept 2012)

- (AU) Australia Treasurer Frydenberg: Will not provide running commentary on budget

Japan

- Nikkei 225 opened 0.0%

- 6104.JP Murakami Fund offers ¥3,456/share in tender offer for 44% stake - Japanese press

- (JP) BANK OF JAPAN (BOJ) LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%; AS EXPECTED

- (JP) Bank of Japan (BOJ) Quarterly Outlook for Economic Activity and Prices: Maintains assessment of economy, cuts all CPI outlooks, raises all GDP outlooks

Korea

- Kospi opened -0.1%

- (KR) South Korea Dec PPI Y/Y: 0.7% v -0.1% prior (biggest jump since Dec 2018)

- (KR) South Korea Jan 20-day Exports y/y: -0.2% v -2.0% prior; Imports y/y: +3.0% v -16.7% prior; Chip Exports y/y: +8.7% v -16.7% prior

- 005930.KR South Korea Exchange considering Samsung stock weighting cap in Feb - Korean press

China/Hong Kong

- Hang Seng opened -1.2%; Shanghai Composite opened -0.3%

- (CN) Former PBOC Dep Gov Min Zhu said China is 'well placed' for growth in 2020, reiterates 'very reasonable' for China GDP to grow at 6% per year - financial press update

- (CN) China PBOC sets Yuan Reference Rate: 6.8606 v 6.8664 prior (strongest fix since July 1, 2019)

- (CN) China PBoC Open Market Operation (OMO): Injects CNY100B via 14-day reverse repos v injects CNY250B in 14-day prior; Net injection CNY100B v injects CNY250B prior

- SNP Reports FY19 Crude production 284.22Mboe, -1.5% y/y; Natural gas production 1,047.8bcf, +7.2% y/y

- (HK) Moody's cuts Hong Kong sovereign rating one notch from Aa2 to Aa3; Outlook to stable

- (CN) China 2019 Foreign Direct Investment (FDI) Yuan Terms: CNY941.5B, +5.8% y/y

- (CN) China Ministry of Commerce (MOFCOM): China welcomes high quality competitive US goods; hope US creates favorable conditions for exports; will increase imports from US based on market demand and WTO rules

North America

- (US) President Trump and France President Macron said to have agreed to continue discussions regrading digital tax through the remainder of 2020

Europe

- BA Reportedly in discussions with banks for up to $10B+ in new borrowings – CNBC

- (NO) Norway Finance Min Jensen and her Progress Party to resign from government - financial press

 

Levels as of 12:15ET

- Hang Seng -2.3%; Shanghai Composite -1.2%; Kospi -0.9%; Nikkei225 -0.9%; ASX 200 -0.2%

- Equity Futures: S&P500 -0.4%; Nasdaq100 -0.5%, Dax -0.5%; FTSE100 -0.5%

- EUR 1.1099-1.1088; JPY 110.22-109.90; AUD 0.6881-0.6853; NZD 0.6613-0.6595

- Commodity Futures: Gold +0.4% at $1,566/oz; Crude Oil -0.3% at $58.39/brl; Copper -1.3% at $2.81/lb