Markets tepid on Ukraine tensions, Japan GDP weaker than expected

Asia Market Update: Markets tepid on Ukraine tensions, Japan GDP weaker than expected, PBOC uses MLF to add liquidity.

General trend

- US futures continued to gain in the session, markets generally weaker with the exception of China after latest PBOC cash injection. Geopolitical tensions between Russia and Ukraine continue to boost gold, as Russian troops said to have moved into position for a possible invasion.

- China PBOC continues to show its willingness to add liquidity to support its economy, injecting CNY300B v CNY200B maturing in its monthly MLF operations, analysts continue to expect another RRR in the coming months.

- Japan prelim Q4 GDP comes in weaker than expected, but 2021 GDP at 1.7%, shows its first increase in 3 years.

- RBA meeting minutes generally keep stance unchanged, reiterating not clear if CPI is in target range to stay and will await further confirmation, watching wage growth, but wording more upbeat, analysts continue to move up 1st rate hike expectations.

- Covid cases in Hong Kong climb (5.400 prelim cases and 1,510 daily cases), Lam notes the city is maxed out, will be using apartment complexes and hotels for isolation, but does not plan to lockdown and will keep elections for chief executive position.

- Leaders across the region continue to prepare for Ukraine, Russia conflict.

Headlines/Economic data

Australia/New Zealand

- ASX 200 opened 0.0%.

- BHP.AU Reports H1 underlying Net $9.7B (cont ops) v $6.0B y/y; Underlying EBITDA $14.6B v $14.7B y/y, Rev $30.5B (cont ops) v $25.6B y/y; CEO: Want to grow volumes of battery grade nickel; Won't be looking at capital management immediately after the Woodside deal - post earnings comments.

- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence: 103.2 v 99.9 prior.

- (AU) Reserve Bank of Australia (RBA) Feb Meeting Minutes: Board is prepared to be patient as it monitors how the various factors affecting inflation in Australia evolve; Reiterates won't raise cash rate until cpi sustainably in 2-3% target.

- (AU) Commonwealth Bank of Australia: Expects the RBA to conduct first rate hike in June instead of August.

Japan

- Nikkei 225 opened +0.4%.

- (JP) JAPAN Q4 PRELIMINARY GDP Q/Q: 1.3% V 1.5%E; GDP ANNUALIZED Q/Q: 5.4% V 6.0%E; Business Spending Q/Q: 0.4% v 0.5%e; 2021 real GDP 1.7% (1st growth in 3-years).

- (JP) Bank of Japan (BOJ) Gov Kuroda: Global economy is facing big challenges now; Domestic economy and price condition warrants keeping loose monetary policy.

- (JP) Japan Econ Min Yamagiwa: Need to pay close attention to downside risks to economy from infection trends, global supply constraints and surging raw material costs – post GDP comments.

- (JP) Japan Chief Cabinet Sec Matsuno: Must pay due attention to downside economic risks.

- (JP) BOJ said to purchase ¥70.1B of ETFs during its session on Monday (Feb 14th).

- (JP) Japan MoF sells ¥2.5T v ¥2.5T indicated in 0.005% 5-year JGBs; Avg Yield: +0.0440% v -0.0410% prior, bid-to-cover: 3.39x v 3.34x prior.

- 6502.JP Reports 9M Net ¥114.9B v ¥43.6B y/y, Op ¥87.7B v ¥24.0B y/y, Rev ¥2.36T v ¥2.10T y/y; CEO: May revise split plan if investors object in March vote - post earnings comments.

Korea

- Kospi opened +0.3%.

- (KR) According to South Korea weather agency, another natural earthquake struck near North Korea's nuclear test site again Tuesday (4th quake in 5 days).

- (KR) South Korea First Vice Finance Min Lee Eog-weon: To mobilize all policy means to minimize the economic fallout of the Ukraine crisis and reduce market volatility amid growing tensions between the United States and Russia over the region - Yonhap.

China/Hong Kong

- Hang Seng opened -0.4%; Shanghai Composite opened 0.0%.

- (CN) CHINA PBOC CONDUCTS CNY300B V CNY200B MATURING IN 1-YEAR MEDIUM-TERM LENDING FACILITY (MLF) AT 2.85% V 2.85% PRIOR.

- (CN) China PBOC Head of Digital Currency Mu: Digital Yuan (DCNY) has a small impact on the finance sector so far.

- (CN) In Jan China banks lent CNY600B to property sector (2x monthly avg from Q4) - press.

- (CN) China Sec Journal: PBOC may cut the RRR or interest rates 'later' this year (In line).

- (CN) China PBOC sets Yuan reference rate: 6.3605 v 6.3664 prior.

- 2202.HK Chairman Yu Liang: We are on our last legs, which means there are no other options. Many of us have not comprehensively understood the situation we find ourselves in; ncome this year will definitely drop significantly - annual staff meeting being cited by SCMP.

- (CN) China said to have strengthened its regulations on the Ride Hailing sector – press.

- (HK) Hong Kong Monetary Authority (HMKA): China PBOC to sell combined CNY25B in 3-month and 1-year bonds in Hong Kong.

Other

- ST.SG Reports Q3 (S$) underlying Net 473M v 477M y/y; Rev 3.9B v 4.2B y/y.

- (IN) India Central Bank (RBI) said to be seeking a ban of crypto - press.

North America

- WHR Raises Quarterly dividend 25% to $1.75 from $1.40 (indicated yield 3.56%); Authorizes $2B buyback (17% of market cap).

- (CA) Canada PM Trudeau: Confirms to invoke emergency powers in response to protesters; Will be time limited and restricted to certain regions.

- DIDI Said to be planning to cut 20% of jobs before Hong Kong IPO - US financial press.

Europe

- (EU) ECB chief Lagarde: Our target is an inflation rate of 2% over the medium term; To achieve this, we will take action at the right time.

Levels as of 00:15ET

- Hang Seng -1.2%; Shanghai Composite +0.1%; Kospi -1.3%; Nikkei225 -1.2%; ASX 200 -0.5%.

- Equity Futures: S&P500 +0.0%; Nasdaq100 +0.1%, Dax -0.3%; FTSE100 -0.4%.

- EUR 1.1323-1.1302; JPY 115.61-115.29; AUD 0.7140-0.7113; NZD 0.6631-0.6610.

- Commodity Futures: Gold +0.6% at $1,881/oz; Crude Oil -0.8% at $94.69/brl; Copper -0.2% at $4.48/lb.