Indices trade mixed after recent losses on Wall St
|Asia Market Update: Indices trade mixed after recent losses on Wall St; Bank dividends remain in focus; US weekly jobless claims are expected to remain in the millions.
General Trend:
- Australian equities underperform, financials decline after RBNZ said banks agreed to freeze their dividends in order to support financial stability
- Aussie banks pare some of the losses as Australia said no plan to restrict dividends at this time
- Sectors moving lower in Japan include financials and transports
- Kospi outperforms, Samsung rises on plan by South Korea to halt the stock weighting cap rule; BOK conducts first ever weekly ‘QE’ operation
- Telecom Services and IT sectors rise in early trading in Shanghai, Consumer Discretionary firms lag
- JGB Futures rose after Japan sold 10-year bonds at the highest bid to cover since 2019, the avg yield for the auction was also positive
- Japan’s gov’t continues to reiterate that there is no need to declare an emergency related to coronavirus at the current time
- Tokyo Gov: Japan govt will announce additional economic measures on April 7th (Tuesday)
- County located in central China announced a partial lockdown amid concerns about the potential for a second wave related to coronavirus cases (HK press); Yunnan province (southwest China) said to also ban its citizens from leaving China
- Trump reiterated domestic travel restrictions are possible, confirmed to meet with oil executives on Friday
- RBNZ announced a new term lending facility (TLF), the measure is aimed at ensuring access to funding for banks at low interest rates for up to 3 years duration (which is longer than the central bank’s other liquidity facilities)
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -0.6%
- (NZ) Reserve Bank of New Zealand (RBNZ): to unveil a term lending facility; plans for a longer-term funding scheme for the banking system; will launch first TLF operation in May
- (AU) Australia APRA Spokesperson: Decisions on dividends are up to bank board for time being, currently engaging with banks on their approach to dividends
- (NZ) Reserve Bank of New Zealand (RBNZ) calls on banks to freeze dividends amid coronavirus
- (AU) Australia putting together a commercial landlord relief package in time for National Cabinet meeting Friday, will allow for the part-deferral and part-waiver of commercial rents – AFR
- (AU) Australia PM Morrison: Australia is slowing the spread of the coronavirus; Does not know when social restrictions will be eased; Cutting bank dividends not necessary at this point
- (AU) Reserve Bank of Australia (RBA): Excess cash at exchange settlement (ES) accounts at A$75.1B v A$72.2B prior
- (AU) Reserve Bank of Australia (RBA) adds A$0.2B to banking system through repos v A$1.35B prior
- (AU) Australia sells A$2.5B v A$2.5B indicated in Jul 2020, Sept 2020 and Dec 2020 notes
- (AU) Reserve Bank of Australia (RBA) offers to buy total of A$2.0B in bonds (purchases A$2.0B) v A$3.0B prior
- (AU) Australia Q1 NAB Business Confidence: -11 v -2 prior (lowest level since Q1 2009); Conditions: -3 v +6 prior
- (AU) Australia Feb Job Vacancies: -0.1% v 1.2% prior
- (NZ) New Zealand sells NZ$800M v NZ$800M indicated in bonds due April 2023, April 2029 and April 2037
Japan
- Nikkei 225 opened -0.7%
- WE Reportedly Softbank will abandon Wework investor deal and allow deal to expire - press
- (JP) Japan reported to allow certain companies defer tax payments due to coronavirus - Japan press
- (JP) Japan Investors Net Buying of Foreign Bonds: -¥1.7B v -¥65.7B prior week; Foreign Net Buying of Japan Stocks: -¥1.4T v -¥1.5T prior week
- (JP) Japan Chief Cabinet Sec Suga: Japan is doing coronavirus tests on everyone it is deemed needed for; Japan has capacity of 9.0K tests/day
- (JP) Japan PM Abe: Working with local govt in Japan to deal with coronavirus, holding off on need for emergency declaration
- (JP) Tokyo, Japan Gov Koeki: Japan will announce additional economic measures April 7th
- (JP) Japan MoF sells ¥2.0T v ¥2.0T indicated in 0.10% 2-year JGBs, avg yield: +0.023% v -0.125% prior, bid to cover: 4.19x v 4.28x prior (btc highest since May 2019)
Korea
- Kospi opened +0.5%
- (KR) SOUTH KOREA MAR CPI M/M: -0.2% V -0.4%E; Y/Y: 1.0% V 0.8%E; CPI Core Y/Y: 0.7% v 0.6%e
- (KR) South Korea March Loans extended by five major banks to households +KRW19.8T (largest m/m gain since Sept 2015) – Yonhap
- (KR) Bank of Korea (BOK) provides KRW5.25T in liquidity via repo operations (1st weekly op)
- (KR) South Korea reports 89 additional coronavirus cases v 101 prior; Additional deaths 4 v 3 prior
- 005930.KR Korea exchange seeks to halt Samsung stock weighting cap rule
China/Hong Kong
- Hang Seng opened -1.1%; Shanghai Composite opened -0.5%
- (CN) China interbank market regulator: Will increase number of "quality" bond issuers, China used 83.5% of allocated 2020 local govt bond quota in Q1; Will relax rules for issuance of short term bills and medium term notes
- (CN) China military scientists hope to test coronavirus vaccine overseas, first-stage clinical trial will be published this month - SCMP
- (CN) Moody's affirms China A1 sovereign rating
- (CN) Yunnan Province, China to bar citizens from leaving China in order to prevent coronavirus from spreading - Chinese Press
- (CN) China said to consider reduction in subsidies related to electric vehicles (that is just announced) - US financial press
- (CN) China PBOC sets Yuan reference rate: 7.0995 v 7.0771 prior
- (CN) China PBoC Open Market Operation (OMO): Skips Reserve Repo Operations (2nd consecutive session); Net CNY0B v CNY0B prior
- (HK) Hong Kong Monetary Authority (HKMA): No need for banks to cancel dividend payouts
North America
- (US) Fed announces temporary change to supplementary leverage ratio rule to ease strains in the Treasury market resulting from the coronavirus and increase banking organizations’ ability to provide credit to households and businesses
- (US) Dept of Energy (DOE) Chief: Calls on saudi Arabia and Russia to work together to calm markets, Boosting output at a time of demand loss is frustrating
- WE Confirms Softbank will not complete offer, will review all legal options including litigation – email
- BA Expected to announce buyouts and early retirement packages to employees as soon as Thursday - financial press
Europe
- (UK) According to a poll from CIPD more than 50% of UK companies are planning to furlough staff due to coronavirus; which is likely going to exceed the UK Treasury cost expectations – FT
- (RU) Senior Gulf Official: Saudi Arabia supports cooperation among oil producers to stabilize oil markets; Oil market turmoil caused by Russia opposition to proposed OPEC+ cuts at meeting in early March
Levels as of 1:15ET
- Hang Seng -0.5%; Shanghai Composite +0.1%; Kospi +0.6%; Nikkei225 -1.6%; ASX 200 -2.0%
- Equity Futures: S&P500 +0.9%; Nasdaq100 +0.8%, Dax +1.4%; FTSE100 -0.4%
- EUR 1.0969-1.0939; JPY 107.57-107.06; AUD 0.6094-0.6063; NZD 0.5939-0.5906
- Commodity Futures: Gold +0.4% at $1,597/oz; Crude Oil +5.3% at $21.39/brl; Copper +0.3% at $2.18/lb
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.