Modest equity gains generally seen in Asia

Asia Market Update: Modest equity gains generally seen in Asia; Is again avoiding a government shutdown a reason to celebrate amid tariff risks?; BOJ decision due next week [Mar 19th].

General trend

- (US) Vice President Vance: Fundamentals of the economy are 'quite strong right now' [**Reminder Mar 9th: US President Trump said 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].

- On the lookout for any weekend press speculation ahead of BOJ meeting; Quiet session for JGBs.

-Technical bounce for the Hang Seng?

- Spot Gold trades at fresh record high of $2,990.09/oz; gold miners rise in Australia.

- Potential China Feb New Yuan Loan, Financing and M2 data expected in upcoming sessions (no set time).

- South Korea Constitutional Court in focus [Reminder Feb 25th 2025: (KR) South Korea Constitutional Court to hold final hearing of Yoon impeachment trial on Tues [Feb 25th]; the hearing is due to open at 2 pm local time; some expect the court to deliver a verdict within 2 weeks after today’s hearing – Press].

- South Korea Trade Min Cheong plans to visit the US Mar 13-14th in order to discuss tariffs and cooperation.

Headlines/economic data

Australia/New Zealand

-ASX 200 opens +0.1% at 7,753.

- RBA: Australia Quarterly Statement by the Council of Financial Regulators; Reassessing the Case for Central Clearing of Bonds and Repos in Australia.

- RBNZ: Closes Apr 2025 bond repurchase program; to start Sept 2025 bond repurchase program (**Reminder Apr 29th 2024: (NZ) Reserve Bank of New Zealand. (RBNZ): Closed repurchase of May 2024 government bond [**Reminder Nov 13th 2023 (NZ) Reserve Bank of New Zealand (RBNZ) to begin repurchasing May 2024 New Zealand government bonds; cited liquidity management purposes]).

-New Zealand Feb Manufacturing PMI: 53.9 v 51.7 prior (2nd month of expansion).

-New Zealand Feb Food Prices M/M: -0.5% v 1.9% prior.

China/Hong Kong

- Hang Seng opens +0.8% at 23,653.

- Shanghai Composite opens at +0.1% at 3,361.

- DeepSeek: Said to focus on research over revenue - FT; May find limited access to Nvidia's new generation of more advanced chips [**Reminder Feb 24th: H20 chip orders said to 'jump' amid demand from China related to DeepSeek model adoption; companies mentioned included Tencent, Alibaba and ByteDance [no financial details disclosed] - financial press].

-China PBOC Open Market Operation (OMO): Injects CNY180.7B in 7-day reverse repos; Net drains CNY4.3B.

-China PBOC sets Yuan reference rate: 7.1738 v 7.1728 prior.

-China PBOC reiterates stance of 'moderately loose' monetary policy; to create sound monetary conditions fir the economy - Post NPC meeting.

-China NFRA: Reiterates vows financial support to increase consumption; Encourages banks to issue personal consumption loans.

-China MOF sells 30-year bonds: Avg Yield: 2.0629% v 1.7993% prior.

-(US) New Senator bill seeks to restrict outbound investment to counter China - press.

-China Financial Regulator: To make good use of real estate financing coordination mechanism; Will expand and enhance efficiency of 'White List' projects.

-CK Hutchison [1.HK]: HKMAO website said to republish commentary urging CKH to reconsider the sale of Panama Canal Port assets - Press.

-Rusal [486.HK]: Reports FY24 Adj Net $983M v $73M y/y, Recurring Net $1.33B v $0.70B y/y, Rev $12.1B v $12.2B y/y.

-Walmart: Walmart toy suppler MGA Entertainment plans to raise prices to offset Trump's 20% China tariffs and will look to accelerate plans to pull its manufacturing out of China - press.

-Nvidia: Reportedly Tencent has recently purchased a batch of new chips from Nvidia for "billions of yuan", and in order to deliver orders to Tencent on time, Nvidia H20 chips are in short supply in the short term - Chinese press.

Japan

-Nikkei 225 opens -0.3% at 36,637.

-Japan Fin Min Kato: Inflation is behind the 'recent protests' against the Finance Ministry; to aim for both economic growth and fiscal consolidation (**Note: The next BOJ rate decision is scheduled for Mar 19th [Wed]).

-Japanese Bankers Association Chairman: Market views on BOJ's terminal rate rose more than expected.

- Japan Chief Cabinet Sec Hayashi: PM Ishida vouchers did not violate fund and election laws; US and Japan cost-sharing on stationed troops is appropriate.

-Japan MOF sells ¥500B v ¥500B indicated in JGBs in liquidity enhancement auction; bid-to-cover: 3.90x.

-Japan sells ¥4.5T vs. ¥4.5T indicated in 3-Month Bills; Avg Yield: 0.3070% v 0.3404% prior; bid-to-cover: 3.49x v 3.27x prior.

-Saxo Bank said Yen carry unwind may mean more 'pain' for US Tech stocks - US financial press.

Korea

- Kospi opens -0.3% at 2,565.

-South Korea Feb Import Price Index M/M: -0.8% v 2.3% prior; Y/Y: 6.3% v 6.6% prior;

-Samsung SDI [006400.KR]: Plans to sell KRW2.0T in new shares [11.8M shares]; To use the proceeds on investing in US jv with GM.

-South Korea Acting President Choi: Zero tolerance for any acts challenging public authority; ahead of Yoon impeachment ruling it is essential to respect and accept any decision; To mobilize 'all' possible police resources to areas in Seoul around the constitutional court.

- South Korea sells KRW600B vs. KRW600B indicated in 50-year Bonds; Avg Yield: 2.440% v 2.570% prior.

-Bank of Korea (BOK) Gov Rhee said to 'warn' of fertility crisis leading to the rise of populism - Press.

Other Asia

- Vietnam PM told US Ambassador that Vietnam is reviewing duties on US goods [including LNG, farm, high-tech products] to increase imports - Press.

North America

-(US) US Senator Schumer: A shutdown would be worse than a GOP stopgap bill; Will vote to advance stopgap bill.

-(US) Follow Up: House Democratic Leaders: Confirm ready to vote for 4-week CR.

-(US) Senate Majority Leader Thune (R-SD): President Trump reiterated interest in making tax cuts permanent; No decision has been made on debt ceiling.

-(US) Reportedly White House is working on a plan to cut spending without Congress after a govt shutdown is averted - Fox News.

-Canada Fin Min: Confirms agreed to continue talks in meeting with US Commerce Sec Lutnick; there is a mutual understanding that there is an impact on both sides of the border from tariffs.

-(US) Treasury Sec Bessent: I am not concerned about a little market volatility over three weeks; Our policies will lay the ground word for real income gains
(US) Treasury Sec Bessent: Hopefully we do not get a recursive 'Biden-flation'; we are very vigilant, it could happen again.

- President Trump is planning to sign executive orders on Fri at 12 PM ET.

-(US) TREASURY $22B 30-YEAR BOND REOPENING DRAWS 4.623% V 4.913% PRIOR; BID TO COVER 2.37 V 2.52 PRIOR AND 2.43 OVER LAST 8 REOPENINGS.

-Tesla [TSLA]: Tesla warns Trump administration it is exposed to retaliatory tariffs and US exporters are exposed to disproportionate impacts when other countries put on retaliatory tariffs - press.

-Tesla [TSLA]: Said to plan version of Model Y costing at least 20% less to produce than refreshed version - US financial press.

-OpenAI: Asks the US for 'relief' from AI rules to compete with firms in China - SCMP [update]

Europe

-*(US) PRES TRUMP: THREATENS THE EU WITH 200% TARIFFS ON WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES, IF 50% TARIFF ON US WHISKY NOT REMOVED.

- (RU) US to place more sanctions on Russian oil, gas and banking by further restricting Russian access to US payment systems; Trump Admin did not extend Russian oil waiver - CBS News.

-(RU) Russian Pres Putin: Thanks US Pres Trump for attention to Russia, Ukraine conflict; We agree to stop fighting in Ukraine, but it should lead to long-standing peace; Ukraine would benefit from 30-day ceasefire under current circumstances.

-ECB President Lagarde: Reiterates Trump decisions are a cause for concern; any trade war is going to hurt the global economy.

-EU Foreign Policy Chief Kallas: 'Quite optimistic' G7 can reach accord on joint communique.

Levels as of 01:20 ET

- Nikkei 225, +0.9%, ASX 200 +0.5% , Hang Seng +2%; Shanghai Composite +1.6% ; Kospi -0.2%.

- Equity S&P500 Futures: +0.8%; Nasdaq100 +1.1%, Dax +0.7%; FTSE100 +0.1%.

- EUR 1.0858-1.0834 ; JPY 148.59-147.75 ; AUD 0.6295-0.6278 ;NZD 0.5713-0.5691.

- Gold +0.2% at $2,998/oz; Crude Oil +0.7% at $67.02/brl; Copper +0.4% at $4.9365/lb.