Crude Oil FUTS Continue to Rise, Evergrande Extends Trading Halt

Asian Market Update: Stocks generally trade higher despite losses on Wall St.; BABA announced a huge share buyback; Focus on the Fed’s hawkish comments [Powell]; USD/JPY Climbs Above ¥120; UST rates extend their rise in Asia [led by 2-yr]; FUTS on Crude Oil Continue to Rise; Evergrande extends trading halt.

General trend

– The USD is generally trading firmer amid Fed speeches; Tokyo markets are back from vacation; USD/JPY Trades High Since Feb 2016; EUR tests below 1.10.

– No comments Kuroda seen linked to the Yen.

– Japanese officials continue to rule out a stimulus “package” for now.

– Said Japan is looking for >¥10T stimulus [Japanese press].

– Japanese Prime Minister Kishida: Russia’s halt in peace talks (with Ukraine) is unfair and unacceptable.

– Cos of Japan. commentary on the crisis of power.

– NZ Q1 Westpac Consumer Confidence: the lowest since the global financial crisis of 2008.

– IMF Rhee: not approached for BOK Gov work; BOK may face temporary government absence [commented on press speculation].

– CN/HK property developers continue to delay full year results.

– US equity FUTs extended declines in Asia.

– Nike increases in after-hours trading after earnings [related firms also trade higher in Hong Kong].

– Energy and financial companies are generally trading higher in Asia.

– Nikkei 225 outperforms after the holidays; Exporters supported by weak yen; Japanese financials supported by rising US yields.

– Hang Seng saw modest gains [limited volatility seen thus far]; TECH Index Rises Amid Alibaba Share Buyback Announcement; The Mainland Properties index continues to fall; Evergrande will host an investor call later today amid an investigation and financial delays.

– Xiaomi will publish its results after market close.

– Shanghai Composite was generally flat during morning trading.

– S&P ASX 200 has extended gain [Energy, Financial and Resources firms rise].

– New Zealand Prime Minister Ardern will announce changes to coronavirus restrictions on Wednesday, March 23.

Securities/Economic data

Australia/New Zealand

The ASX 200 opened +0.5%.

– (AU) Australia sells A$100m vs. A$100m shown in September 2030 2.50% indexed bond; Average yield: 0.0775%; bid to cover: 2.48x.

– (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence: 91.2 vs. 95.8 previously.

– (NZ) New Zealand Q1 Westpac Consumer Confidence: 92.1 vs. 99.1 before.

– (AU) Reserve Bank of Australia (RBA) Gov Lowe: Watching the labor market for labor cost signals, how pervasive the change in the psychology of inflation is.

– Attributable contracted sales that have not been recognized ~ HK$8.6 billion.

– (NZ) New Zealand Transport Minister: he will reduce road charges by 36% at the end of April [response to energy crisis].

Japan

Nikkei 225 opened +1.0%.

– (JP) Japanese Prime Minister Kishida: Russia’s halt in the peace talks (with Ukraine) is unjust and unacceptable.

– (JP) Japan Trade Min Hagiuda: Supply shortage in Tokyo will be severe today (March 22).

USD/JPY is trading above ¥120.

– (JP) Bank of Japan (BOJ) Gov Kuroda: Inflation in Japan is cost inflation; Negative for profits and revenues, cost inflation weighs on the economy in the longer term.

9506.JP Japan Grid Coordinator Orders Power Sharing for Tohoku; Hokkaido Electric ordered to supply up to 610K KW.

– (JP) Ministry of Industry of Japan: may require additional efforts to save energy; Demand from Tokyo and surrounding areas is expected to exceed supply in the evening.

– (JP) Said shut down power plants in Japan could take ‘months’ to restore service – Press.

– (JP) Japan crude steel production in February 7.3 Mt vs. 7.76 Mt previously, -5.9% m/m, -2.3% y/y – Industry body, Japan Iron and Steel Federation steel.

Korea

-Kospi opened flat.

– (KR) South Korea’s President-elect Yoon: Calls for a quick supplementary budget plan.

China/Hong Kong

Hang Seng opened +0.5%; Shanghai Composite opened -0.1%.

– (CN) China PBOC Open Market Operation (OMO): sells CNY 20 billion in 7-day reverse repos against CNY 30 billion previously; Net injection CNY10B v Net injection CNY20B before.

– (CN) The Chinese PBOC sets the reference rate for the yuan: 6.3664 against 6.3677 previously.

– (CN) China Securities Journal: China could cut the prime lending rate (LPR) in the second quarter.

– (CN) China will temporarily include rapid antigen tests for insurance.

– (CN) The United States has extended the travel ban linked to Chinese officials; concerns the repression of ethnic and religious minorities – press.

(HK) Ronshine China [3301.HK]: appoints Elite Partners CPA as new statutory auditor, replacing PwC.

– (CN) Lower installments in China will support housing demand – Financial News backed by PBOC.

(HK) Zhenro Properties [6158.HK] to issue 1.59 billion yuan in 2023 of bonds after bond swap.

– Evergrande 3333.HK To delay FY21 results; Stop the negotiation to extend, to engage with a legal adviser.

– Monitoring of Evergrande’s real estate services: trading suspended until further notice; Security deposits of 13.4 billion yuan have been applied by the banks concerned.

Other

– IMF Rhee: inflation spike in Asia in H2; higher borrowing costs could slow the economic recovery in Asia.

– (ID) Indonesia Fin Min: Indonesia aims to reduce 2022 bond issuance by at least IDR 100T.

North America

– (United States) President Biden: Ukraine is fighting valiantly and using American equipment; CEOs need to protect companies from cyberattacks; Putin’s back is against the wall, he talks about new false flags such as biological weapons.

(US) Fed Chair Powell: The Fed can hike more than 25 basis points in a meeting or meetings if needed; The Fed is ready to raise rates above neutral if warranted.

– (US) Fed Chairman Powell: We are NOT expecting near-term progress on inflation; Asked what would prevent a move of 50 basis points in May, answers “Nothing”.

– (United States) IMF Rhee: high inflation in the United States due to higher demand; The United States has the option of raising its rates.

(US) Goldman Sachs expects US Fed rate hike of 50 basis points in May and June, then 25 basis points over the course of the year [2022]; expects the Fed to announce a reduction in its balance sheet starting in May 2022.

Europe

– (RU) Russian coupon for sovereign bond maturing in 2029 reportedly handled by JP Morgan – press.

Levels starting at 1:20 a.m. ET

– Nikkei 225, +1.4%, ASX 200 +1%, Hang Seng +0.9%; Shanghai Composite +0.1%; Kospi +0.6%.

– S&P500 equity futures: -0.2%; Nasdaq100 -0.5%, Dax -0.3%; FTSE100 -0.1%.

– €1.1025-1.0981; JPY 120.46-119.43; AU$0.7409-0.7375; NZ$0.6893-0.6864.

– Gold +0.4% to $1,937/oz; Crude Oil +2.4% to $112.64/bl; Copper -0.2% to $4.6920/lb.

About Meredith Campagna

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