Economic Data
(CN) CHINA FEB NON-MANUFACTURING PMI: 54.5 V 56.2 PRIOR (5-month low; 12TH STRAIGHT MONTH OF EXPANSION)
(AU) AUSTRALIA JAN BUILDING APPROVALS M/M: -2.4% V +2.8%E (2nd consecutive decline); Y/Y: 9.9% V 8.1%E
(AU) AUSTRALIA Q4 COMPANY OPERATING PROFIT Q/Q: -1.0% V -1.0%E (5th quarter of decline); INVENTORIES Q/Q: 0.2% V 0.6%e
(AU) AUSTRALIA FEB ANZ JOB ADS M/M: 3.0% V 0.6% PRIOR (2nd month of increase; biggest increase since Feb 2012)
(AU) AUSTRALIA FEB TD SECURITIES INFLATION M/M: 0.0% V 0.3% PRIOR (3-month low); Y/Y: 2.4% V 2.5% PRIOR
(NZ) NEW ZEALAND FEB ANZ COMMODITY PRICE: 1.0% V 0.3% PRIOR
(JP) JAPAN FEB MONETARY BASE Y/Y: 15.0% V 10.9% PRIOR (1-yr high)
(KR) SOUTH KOREA FEB CONSUMER PRICE INDEX (CPI) M/M: 0.3% V 0.5%E; Y/Y: 1.4% V 1.6%E; CORE CONSUMER PRICE INDEX: 1.3% V 1.2% PRIOR
(KR) SOUTH KOREA FEB HSBC MANUFACTURING PMI: 50.9 V 49.9 PRIOR (9-month high)
(UK) UK FEB LLOYDS BUSINESS BAROMETER: 13 V 15 PRIOR (6-month low)
(UK) UK FEB HOMETRACK HOUSING SURVEY M/M: 0.1% V 0.0% PRIOR (9-month high); Y/Y: -0.1% V -0.3% PRIOR (smallest decline since Aug 2010)
Markets Snapshot (as of 05:30 GMT)
Nikkei225 +0.2%
S&P/ASX -1.5%
Kospi -0.5%
Shanghai Composite -2.9%
Hang Seng -1.5%
Mar S&P500 -0.4% at 1,510
Apr gold flat at $1,576/oz
Apr Crude Oil -0.2% at $90.47/brl
Notes/Observations:
Shanghai Composite down sharply in the wake of property curbs announced late on Friday. State council said it would enforce 20% tax on home sale profits, increase downpayments for second homes and raise interest rates on mortgages. China vanke limit down -10%; Shanghai property index -9%.
China non-manufacturing PMI released over the weekend at 54.5; 5-month lows.
China property curbs weighing on all risk-on trades. The AUD, already under pressure after weak building approvals, took out 8-month lows below $1.0150, accelerating declines below $1.0120. SP500 futures down 8 handles at one point. Crude below $90.50; Copper below $3.50.
PBoC Dep Gov Yi: China prepared for currency war, monitoring global central banks.
BOJ Gov Nominee Kuroda testified before parliament in confirmation hearings. He hinted at the purchase of more and longer-dated JGBs, and pushing forward the start of the unlimited asset purchase program unveiled by BOJ in January. He stated that he will refrain from buying foreign bonds.
The Euro is holding steady above $1.30 despite threat of a euro referendum from Italy's Grillo and more popular discontent from Portugal. The Troika is back in Greece for week-long inspections.
Speakers/Political/In the Papers
(CN) China PBoC Dep Gov Yi Gang: China is "fully prepared" for currency war but would rather abide by G20 conventions - Chinese press.
(CN) PBoC adviser Song Guoqing: Pressure on PBoC to tighten policy and controls is abating; Inflation to be "relatively low" in March due to slowing increase in food price - financial press.
(JP) China Dagong cuts Japan Credit Rating one notch to A from A+
(JP) Opposition party (DPJ) will approve Kuroda as BoJ Gov - Japanese press.
(JP) BOJ said to shift its focus from controlling interest rates to expanding its balance sheet under the new leadership - NYTimes
(JP) EU Pres Van Rompuy and EC head Barroso to visit Tokyo at the end of March to launch free trade talks (FTA) with Japan
(AU) AUD/USD: Citi currency strategist Elmer expects RBA to hold rates at 3% this week, but sees scope for more easing in the next 6 months - financial press.
(AU) Fitch: Australia banks face softer environment in 2013, unlikely to result in negative rating action.
(AU) Australian analysts say extensive cost cutting by companies will lead to downgrades of 2014 earnings forecasts - AFR.
(NZ) New Zealand Treasury Monthly Report for February: GDP growth increasing, boosted by housing market, Q4 GDP expected to be particularly strong.
(IR) Iran atomic chief: Planning to install 3K new generation centrifuges at one of Iran's nuclear plants.
(IT) Italy 5 Star Party leader Grillo: Italy may have to abandon the euro and return to the lire if conditions do not change; need to renegotiate Italy's debt - German press
(PT) Eurozone fin mins to meet in Brussels on Monday to discuss Portugal's request for more time in repaying its loans - Financial press
(GR) Greece has started negotiations with the Troika this weekend, as inspectors return to Athens for a week-long review of progress toward implementing austerity steps - Financial press.
(FR) France Fin Min Moscovici: Confident France can reach deficit below 3% of GDP in 2014; will not implement more austerity this year - Financial press
(EU) ESM chief Regling: Reservations in some European states may eventually stop the use of ESM for bank recapitalization - German press
(US) Fed chairman Bernanke: ending easy monetary policy too soon would be costly to economy, and may undermine financial stability - update as of Mar 1.
(US) House speaker Boehner: Held talks with President Obama regarding sequester spending this weekend; Made no progress to shut off budget cuts.
Currencies
Asian currencies were under pressure all session, as negative European news over the weekend and the introduction of additional China property cooling measures set an early negative tone. The AUD/USD pair opened close to the 1.02 handle early but quickly fell 15pips to 1.0180, following the release of worse than expected January Building Approvals. Equity market openings in Australia, Korea, and Japan were muted; the AUD/USD and NZD/USD pared some of their early session declines. The NZD/USD pair was buoyed by a positive report from the New Zealand Treasury that retail sales and housing remained strong. The AUD failed to find its footing and the AUD/NZD cross quickly fell after the report to 1.2360. The USD/JPY pair rose to a 93.70 high as BoJ Nominee Kuroda began his confirmation hearing in Japan parliament; his dovish statements on bond buying and meeting the 2% inflation target proved negative for the JPY. The EUR/JPY pair reached a high of 121.97, as the EUR/USD found footing above the 1.30 handle. The opening of China stocks shook the currency market as all China equity indices suffered heavy losses led by homebuilders, as investors digested the negative effects of the new China property cooling measures. The USD/JPY pair quickly reversed, and hit 93.27 low, while the AUD/USD and NZD/USD pairs followed the decline in equity indices to slide further to 1.0115 and 0.8200 - 8 and 2 month lows respectively. The USD/SGD pair hit a 6-month high of 1.2460 and the USD/KRW traded in the 1090 levels as the session took a decidedly risk off tone. The USD/CNY reference rate was also slightly weaker at 6.2822 from 6.2798 prior.
Fixed Income/Commodities
(CN) China Stats Bureau: China late-Feb pork prices decline by around 4.8% - Chinese press/
(AU) Macquarie analyst: Iron ore most likely overpriced at today's levels - Financial press/
GLD: SPDR Gold Trust ETF daily holdings fall by 0.6 tons to 1,253.9 ton (lowest since 1,251.9 on Aug 2nd; 9th consecutive session of decline) - update as of Mar 1.
SLV: iShares Silver Trust ETF daily holdings rise to 10,650 tons from 10,638 tons prior (highest since 10,690 on Jan 23rd) - update as of Mar 1.
Equities
Kia 000270.KR: Reports Feb vehicle sales -15% y/y to 205.4K units
SNE: US financial press comments on high expectations of new Xperia Z smartphone
RIO.AU: China H1 expected to be strong, will moderate in H2, iron ore supply vulnerable to downside shocks - company presentation.
Lynas LYC.AU: Eric Noyerz will become new CEO effective Mar 31, 2013; Nicholas Curtis will remain on Board as non-executive Chairman.
Rusal 486.HK: Reports Q4 Adj EBITDA $221M v $207.6Me, Rev $2.6B -6.5% y/y; FY12 Adj EBITDA $915M v $847.6Me, Rev $10.9B -11.4% y/y; will reduce primary aluminium production at the less efficient aluminium smelters by 300,000 tonnes by year-end (7% reduction)
LVS: Said to have admitted that it may have violated US laws against bribing foreign officials - US press