HK indices lose big for 2nd day, ID stocks new lows

Asia Market Update: HK indices lose big for 2nd day; ID stocks new lows; Flight to JP long-yields as USD regains ground against JPY.

General trend

- Hang Seng Tech -3%, Hang Seng under-performed Asia -2.1%, coincidentally on a day that saw Hong Kong court winding-up orders rise +83% y/y to a 15-year high. Of further note the Hang Seng's premium over mainland China equities is close to the widest since 2020.

- A big move last week by foreigners out of Japanese stocks and short-term securities and into Japanese long-term bonds, with ¥3.40T purchased of long-term securities being the 2nd largest week of purchases ever. Noteworthy within this was the size of the rush out of short-term securities at -¥2.3T.

- Japanese national CPI figures for Feb were slightly higher than expectations. Nevertheless post-release USD/JPY continued to gain back 2/3 of yesterday's steep losses (¥150 to ¥148) to be back at ¥149.40. [Note that at +132K contracts last week, CFTC long-positions on the Yen are extremely long.].

- Despite the weak Aussie job numbers yesterday, expectations of a rate cut by the RBA in April only rose to 10% from 8% before the release. AUD kept falling overnight down well into the 62 handle.

- Indonesia stocks fell another -2.6% after yesterday’s 2% bounce-back, with a lawmaker calling for the Indonesia Central Bank to be 'strengthened' (with extra tools). [** Note: Tuesday saw a 6% free-fall in stocks forcing a trading halt on the Indonesia bourse and causing widespread panic. Equity selling came amid the highest levels of Indonesian bond selling by global funds in 6 years.].

- US equity FUTs -0.1% during Asian trading (were slightly positive until just prior to publication).

Looking ahead (Asian time zone)

- Fri Mar 21st N/A.

Holidays in Asia this week

- Thu Mar 20th Japan.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens -0.1% at 7,916.

- Australia sells A$700M vs. A$700M indicated in 2.75% Nov 2029 bonds; Avg Yield: 3.8551% v 3.8409% prior; bid-to-cover: 4.13x v 3.79x prior.

- New Zealand Feb Trade Balance (NZD): +0.51B v -0.5B prior.

China/Hong Kong

- Hang Seng opens -0.5% at 24,109; Shanghai Composite opens -0.2% at 3,401.

- Hong Kong court winding up orders +83% y/y, to 15 year high - financial press.

- Elon Musk said to receive access to 'top secret' US plans on China – NYT (later denied by Pres Trump).

- China to add cobalt and copper to State Metal Reserves - financial press.

- China Premier Li Qiang: Foreign trade situation is complicated and grim; China must expand its opening up and continuously improve ability to weather international headwinds [overnight update].

- Hong Kong Feb CPI Composite Y/Y: 1.4% v 1.9%e.

- China PBOC reiterates to drive coordination of fiscal and money polices - comments from 2025 Treasury Work meeting [overnight update].

- China issues 'guidance' related to 'illegal' stake reductions, focused on listed cos' shareholders who transfer stakes to other parties - Chinese press [overnight update].

- Hang Seng premium over mainland China equities is close to the widest since 2020 - US financial press.

- Hong Kong Feb CPI Composite Y/Y: 1.4% v 1.9%e [overnight update].

- China PBOC sets Yuan reference rate: 7.1760 v 7.1754 prior.

- China PBOC Open Market Operation (OMO): Injects CNY93B in 7-day reverse repos; Net drains CNY88B v injects CNY233B prior.

Japan

- Nikkei 225 reopens -0.4% at 37,619.

- JAPAN FEB NATIONAL CPI Y/Y: 3.7% V 3.5%E; CPI (EX FRESH FOOD) Y/Y: 3.0% V 2.9%E.

- Japan releases weekly flows data [period ended Mar 7th]: Foreign buying of Japan equities: -¥1.81T v -¥219.6B prior; Japan buying of foreign bonds: -¥87.6B v -¥353.7B prior; - Foreign buying of Japan bonds [long-term debt securities]: ¥3.40T v ¥686.3B prior.

- BOJ: Japan end of Dec Household Assets at ¥2,230T [record high], +4% y/y; cash and deposits +0.6% to ¥1,134T - Quarterly Flow of Funds report.

- Follow Up: Japan Chief Cabinet Sec Hayashi: No change in US-Japan (defense) alliance capability - financial press.

- Japan Fin Min Kato: Will continue discussions for next FY budget - financial press.

- Nikkei Japan households are still buying more rice despite historically high prices - financial price.

- Nearly 80% of Japanese firms expect JPY/USD to trade 140-150 during FY25-26 - financial press survey.

- Japan sells ¥4.5T vs. ¥4.5T indicated in 3-Month Bills; Avg Yield: 0.2898% v 0.3070% prior; bid-to-cover: 3.28x v 3.49x prior.

Korea

- Kospi opens -0.1% at 2,633.

- South Korea Feb PPI Y/Y: 1.5% v 1.8% prior.

- Follow Up: South Korea opposition party [DP] confirms to impeach acting Pres Choi, as expected - Yonhap.

- South Korea Court reportedly has not yet decided ruling date on impeached Pres Yoon – press [overnight update].

Other Asia

- Indonesia Senior Lawmaker: Role of Indonesia Central Bank (BI) must be 'strengthened' - financial press.

- TAIWAN CENTRAL BANK (CBC) LEAVES BENCHMARK INTEREST RATE UNCHANGED AT 2.00%; AS EXPECTED [overnight update].

- TAIWAN FEB EXPORT ORDERS Y/Y: 31.1% V 24.3%E [overnight update].

North America

- (UR) Follow up: US seeks to reopen terms of Ukraine minerals deal - FT.

- (CA) Canada Feb CFIB Business Barometer: 25.0 v 49.8 prior.

- (BR) Brazil Fin Min Haddad: Fiscal and inflation targets are demanding but need to achieve them.

- (US) Q4 CURRENT ACCOUNT: -$303.9B V -$330.0BE.

- (US) MAR PHILADELPHIA FED BUSINESS OUTLOOK: 12.5 V 9.0E; New Orders: 8.7 v 21.9 prior; Prices Paid: 48.3 v 40.5 prior.

- (US) INITIAL JOBLESS CLAIMS: 223K V 224KE; CONTINUING CLAIMS: 1.892M V 1.89ME.

- (US) FEB EXISTING HOME SALES: 4.26M V 3.95ME.

- (US) FEB LEADING INDEX: -0.3% V -0.2%E.

- (US) Weekly EIA Natural Gas Inventories: +9BCF v -3BCF indicated.

- (CA) Canada PM: Cutting the 5% Goods and Services Tax (GST) on homes up to C$1M for first time buyers.

- (US) Doubleline's Gundlach: FOMC word of the day was certainly uncertainty; Not seeing any inkling of tightening; Inertia means no move is better than a bad move so probably don't see rate cut in May, June or July more likely - CNBC.

- (CA) Bank of Canada (BOC) Gov Macklem: The Canadian economy managed a soft landing; Unfortunately, we're not going to stay on the tarmac for long; We now face a new economic crisis; We must stop the initial terror fueled price hike from spreading.

Europe

- (UK) Fire at Heathrow airport electrical substation causes power outage; Airport to be closed on Mar 21st - financial press.

- (UK) Mar GfK Consumer Confidence: -19 v -20e.

- (EU) NATO reportedly to ask the EU and Canada for 30% boost in 'military capacity' - US financial press.

- (FR) France Pres Macron: 'Buy European' principle is a major doctrine change in Europe and will make Europe.

- (EU) Commission Pres Von der Leyen: [Follow up comments]: Impact of postponed counter-measures to US tariffs 'will not change' - financial press.

- (US) EU TRADE COMMISSIONER SEFCOVIC REPORTEDLY MULLS DELAYING FIRST SET OF COUNTER-TARIFFS AGAINST US TO MID-APRIL - PRESS.

- (EU) ECB's Muller (Estonia): Economy expected to gradually improve; upside risks to inflation due to tariffs.

- (UK) BANK OF ENGLAND (BOE) LEAVES BANK RATE UNCHANGED AT 4.50%; AS EXPECTED.

- (UK) BOE MAR MINUTES: VOTE WAS 8-1 (Dhingra voted for 25bps rate cut).

- (ZA) SOUTH AFRICA CENTRAL BANK (SARB) LEAVES INTEREST RATES UNCHANGED AT 7.50%; AS EXPECTED.

- (UR) Pres Zelenskiy: Russian strikes on energy have not stopped, despite Putin's claims about readiness to halt such attacks.

- (UK) Citi/Yougov Feb 12-month inflation expectations: 3.9% v 3.5% m/m.

Levels as of 00:20 ET

- Nikkei 225 -0.1%, ASX 200 +0.2%, Hang Seng -2.1%; Shanghai Composite -1.0%; Kospi +0.4%.

- Equity S&P500 Futures 10.1%; Nasdaq100 -0.1%; Dax -0.1%; FTSE100 -0.2%.

- EUR 1.0827-1.0859; JPY 148.59-149.52; AUD 0.6286-0.6307; NZD 0.5747-0.5766.

- Gold -0.3% at $3,035/oz; Crude Oil +0.3% at $68.28/brl; Copper -0.2% at $5.1025/lb.