A mix across the region as investors digest the implications of the latest Brexit vote. More on this in the European section. Reports the U.S. is telling China it must keep tariffs “on the table” in trade talks didn’t help. Most core markets traded lower while peripherals advanced. Worth noting, many exchanges saw light volume. Korean data indicates the lowest turnover since Christmas Eve. There is a fair amount of Chinese data due tonight which may have prompted cautious trading.
The majority of major sectors traded to the downside. IT was more than 1.5% with industrials and consumer discretionary off c. 1%. Real estate managed to advance about 0.5%.
The “Aussie” moved lower as macro economic data continues to show weakness. The Westpac March Consumer Confidence Index slipped from the prior reading. The -4.8% m/m decline is the largest since 2015. S. Korea’s unemployment rate for February is below expectations. Japan’s February PPI is a touch higher than expected while January Core Machinery Orders fall more than consensus.
- Ping An +1.6% responded well to the earnings we highlighted yesterday. The company will also implement a share buyback up to CNY 10b.
- ZTE’s -7.6% parent (Zhongxingxin Telecom) is reducing its stake in the company. Zhongxingxin will exchange the holding for a broad A share ETF holding.
- Chinese defense sector names gained with Pres. Xi pressing for military project goals to be met.
- Corporate Travel Management -1.0% confirms it is holding talks with Capita Plc %. CTM has interest in Capita’s events units.
- The HKMA once again defended its currency band.
- The BoJ maintained it current bond purchase targets ahead of its two day meeting which commences tomorrow.
Similar to yesterday, Brexit dominates the headlines. PM May has suffered yet another defeat. This time the result is 391 against vs. 242 in support of her latest draft. Today, Parliament will vote yes or no to a “no-deal” Brexit.
The equity markets have traded in a very narrow range and are currently up small, as a group. That is largely due to underperformance in the U.K. and Germany. The day has also seen plenty of earnings which is driving sector performance.
Most sectors are to the upside. Financials, energy, basic resources, travel/leisure, autos and banks are higher by 0.5% or more. Retail is lower by 0.5% followed by utilities.
The currency markets see the £ advancing and above the 1.31 level. The debt markets have the U.K. 10 yr. gilt yield higher by .
- Sales at Adidas -3.0% rose 5% during Q4 which is below consensus of 6-8%. Also, the company warns sales growth for FY19 will be up to 3%. That is considerable reduction from FY18’s total growth of 8%.
- Despite a dividend increase, Inditex -4.3% is lower due to slowing sales growth. Sales in local currency rose 7% during FY18 which lags its historical rate. EBIT is also below projections. Additionally, the company is projecting LFLs of 4-6% for FY19.
- Balfour Beatty’s +0.9% revenues are inline but both OP and EPS beat the top end of the range. The order book is strong and the company is increasing its year end dividend by a hefty 33.0.
On Our Side of the Pond
- Despite the raft of national bans on the Boeing 737-8 Max, the FAA sees “no basis” to ground the aircraft.
- U.S. PPI and Durable Goods due.
Markets and Macro
|SK||Unemployment rate SA||Feb||4.20%||3.70%||4.40%||—|
|AU||Westpac Consumer Conf Index||Mar||—||98.8||103.8||—|
|AU||Westpac Consumer Conf SA MoM||Mar||—||-4.80%||4.30%||—|
|JN||Core Machine Orders MoM||Jan||-1.50%||-5.40%||-0.10%||—|
|JN||Core Machine Orders YoY||Jan||-2.10%||-2.90%||0.90%||—|
|SK||Money Supply L SA MoM||Jan||—||0.70%||0.50%||0.60%|
|SK||Money Supply M2 SA MoM||Jan||—||1.10%||0.30%||—|
|SK||Bank Lending To Household Total||Feb||—||KR831.2t||KR828.7t||—|
|SK||Bloomberg March South Korea Economic Survey (Table)|
|JN||Tertiary Industry Index MoM||Jan||-0.30%||0.40%||-0.30%||-0.50%|
|SP||CPI Core MoM||Feb||—||0.10%||-1.50%||—|
|SP||CPI Core YoY||Feb||0.80%||0.70%||0.80%||—|
|SP||CPI MoM||Feb F||0.20%||0.20%||0.20%||—|
|SP||CPI YoY||Feb F||1.10%||1.10%||1.10%||—|
|SP||CPI EU Harmonised MoM||Feb F||0.20%||0.20%||0.20%||—|
|SP||CPI EU Harmonised YoY||Feb F||1.10%||1.10%||1.10%||—|
|IT||Unemployment Rate Quarterly||4Q||10.50%||10.60%||10.20%||10.30%|
|EC||Industrial Production SA MoM||Jan||1.00%||1.40%||-0.90%||—|
|EC||Industrial Production WDA YoY||Jan||-2.10%||-1.10%||-4.20%||—|
|US||MBA Mortgage Applications||8-Mar||—||—||-2.50%||—|
|CA||Teranet/National Bank HPI MoM||Feb||—||—||-0.10%||—|
|CA||Teranet/National Bank HP Index||Feb||—||—||223.96||—|
|CA||Teranet/National Bank HPI YoY||Feb||—||—||2.20%||—|
|US||PPI Final Demand MoM||Feb||0.20%||—||-0.10%||—|
|US||PPI Ex Food and Energy MoM||Feb||0.20%||—||0.30%||—|
|US||PPI Ex Food, Energy, Trade MoM||Feb||0.20%||—||0.20%||—|
|US||PPI Final Demand YoY||Feb||1.90%||—||2.00%||—|
|US||PPI Ex Food and Energy YoY||Feb||2.60%||—||2.60%||—|
|US||PPI Ex Food, Energy, Trade YoY||Feb||—||—||2.50%||—|
|US||Durable Goods Orders||Jan P||-0.40%||—||1.20%||—|
|US||Durables Ex Transportation||Jan P||0.10%||—||0.10%||—|
|US||Cap Goods Orders Nondef Ex Air||Jan P||0.20%||—||-1.00%||—|
|US||Cap Goods Ship Nondef Ex Air||Jan P||-0.20%||—||0.00%||—|
|US||Construction Spending MoM||Jan||0.50%||—||-0.60%||—|