Most of Asia traded to the upside; however, Japan gave back earlier gains. Sectors were mostly higher with IT and real estate better by more than 1%. Telcos fell by c. 0.5% and industrials were also red.
Japan reopened from its three day weekend to the upside. However, a strengthening ¥ weighed upon exporters which dragged the indices lower. The currency rose when PM Abe told Parliament he had not officially renominated BoJ Gov. Kuroda to retain his current position. This was a surprise given recent reports he had done so. Mr. Kuroda is still expected to retain his post. Gov. Kuroda did speak to parliament essentially saying current policy to remain in place. A worry to current policy are polls showing PM Abe’s approval rating is at an all-time low.
Other snippets include:
- While continuing to refrain from OMOs, the PBoC injected CNY 393b via a 1 yr. medium term lending facility. The central bank also asked banks to defer loans until after the new year.
- Tencent +3.1% has slightly increased it holding in Tesla and now possesses a 4.97% passive stake.
- Both Pioneer -10.0% and Renesas Elec. -4.0% disclosed disappointing outlooks while NTT’s -4.4% NI missed.
- Carl Icahn urged Xerox shareholders to reject Fujifilm’s -3.2% takeover attempt.
- Lotte Group Chairman Shin was sentenced to 30 months in prison for corruption charges.
Europe started to the upside but quickly turned red and the region has remained lower with U.S. futures also to the downside. One of the factors weighing this morning is currency concerns. DXY is off about 0.5%. Most sectors trade lower but travel and leisure gains, as does materials. Those two sectors have helped the FTSE hold steady and outperform the other indices.
To underscore the aforementioned currency concerns, Michelin -1.6% noted FX headwinds coupled with rising input costs will erode margins. Operationally, their commentary was rather upbeat.
TUI +4.0% has provided the boost for the travel & leisure sector. The travel booking company reports strong Q1 sales and summer reservations have had a solid start.
The IEA declared the OPEC led coalition has almost cleared the global oil surplus. However, it tempered the statement by indicating the rise in prices and corresponding surge in shale output could result in rising inventories again. Crude is currently down small.
On our side of the pond, plenty of earnings out this morning and the WSJ reported Walgreens Boots Alliance is conducting initial talks to acquire AmerisourceBergan.
Brazil remains closed for Carnival.
Market Levels and Macro Data
|SK||Import Price Index YoY||Jan||—||-2.40%||-1.00%||-0.90%|
|SK||Import Price Index MoM||Jan||—||0.70%||-0.80%||-0.70%|
|SK||Export Price Index YoY||Jan||—||-3.50%||-2.10%||-2.00%|
|SK||Export Price Index MoM||Jan||—||-0.40%||-1.60%||-1.50%|
|AU||ANZ Roy Morgan Weekly Consumer Confidence Index||11-Feb||—||119.5||122.7||—|
|AU||NAB Business Conditions||Jan||—||19||13||—|
|AU||NAB Business Confidence||Jan||—||12||11||10|
|SK||Money Supply L SA MoM||Dec||—||0.30%||0.40%||—|
|SK||Money Supply M2 SA MoM||Dec||—||0.40%||0.20%||—|
|JN||Machine Tool Orders YoY||Jan P||—||48.80%||48.30%||—|
|FR||Wages QoQ||4Q P||0.20%||0.10%||0.30%||—|
|FR||Private Sector Payrolls QoQ||4Q P||0.30%||0.30%||0.30%||—|
|SP||House transactions YoY||Dec||—||9.20%||18.10%||—|
|UK||CPI Core YoY||Jan||2.60%||2.70%||2.50%||—|
|UK||Retail Price Index||Jan||276.2||276||278.1||—|
|UK||RPI Ex Mort Int.Payments (YoY)||Jan||4.10%||4.00%||4.20%||—|
|UK||PPI Input NSA MoM||Jan||0.60%||0.70%||0.10%||0.60%|
|UK||PPI Input NSA YoY||Jan||4.10%||4.70%||4.90%||5.40%|
|UK||PPI Output NSA MoM||Jan||0.20%||0.10%||0.40%||—|
|UK||PPI Output NSA YoY||Jan||3.00%||2.80%||3.30%||—|
|UK||PPI Output Core NSA MoM||Jan||0.20%||0.30%||0.30%||0.20%|
|UK||PPI Output Core NSA YoY||Jan||2.30%||2.20%||2.50%||2.40%|
|UK||House Price Index YoY||Dec||4.90%||5.20%||5.10%||5.00%|
|US||NFIB Small Business Optimism||Jan||105.3||106.9||104.9||—|