Economic Data
(AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH TARGET RATE UNCHANGED AT 3.00%, AS EXPECTED.
(AU) AUSTRALIA FEB AIG PERFORMANCE OF SERVICE INDEX: 48.5 V 45.4 PRIOR (8-month high; 13th month of contraction)
(AU) AUSTRALIA Q4 CURRENT ACCOUNT BALANCE (AUD): -14.7B V -15.3BE; NET EXPORTS OF GDP: 0.6% v 5%E
(AU) AUSTRALIA JAN RETAIL SALES M/M: 0.9% V 0.4%E (7-month high)
(CN) CHINA FEB HSBC SERVICES PMI: 52.1 V 54.0 PRIOR.
(HK) HONG KONG FEB PURCHASING MANAGERS INDEX (PMI): 51.2 V 52.5 PRIOR (3-month low)
(JP) JAPAN JAN LABOR CASH EARNINGS Y/Y: +0.7% V -0.3%E (first rise in in 9 months)
(PH) PHILIPPINES FEB CONSUMER PRICE INDEX (CPI) M/M: 0.3% V 0.3%E; Y/Y: 3.4% V 3.3%E; CORE CPI Y/Y: 3.8% V 3.7%E
(TW) TAIWAN FEB CPI Y/Y: 2.97% V 2.8%E; WPI Y/Y: -2.2% V -3.9%E
(UK) UK FEB BRC SHOP PRICE INDEX Y/Y: 2.7% V 1.0%E
Markets Snapshot (as of 05:00 GMT)
Nikkei225 +0.2%
S&P/ASX +1.2%
Kospi +0.5%
Shanghai Composite +1.1%
Hang Seng +0.3%
Mar S&P500 flat at 1,526
Apr gold +0.4 at $1,579/oz
Apr Crude Oil flat at $90.36/brl
Notes/Observations
China National Development and Reform Commission (NDRC) announces 2013 GDP target at 7.5% (unchanged from 2012), CPI at 3.5% (from 4.0% in 2012)and Budget Deficit at 2% of GDP, from 1.5% in 2012.
China Finance Ministry set to maintain "proactive fiscal policy"; PBoC set to keep "prudent monetary policy" in 2013.
China outgoing Premier Wen delivers opening address at NPC, warns inflation pressure is large, monetary policy in developed economies will export inflation.
Shanghai Composite recovers some overnight losses but property names remain in the red.
In Japan, BOJ Deputy Governor candidates Nakaso and Iwata testify to parliament; reiterate Kuroda's overnight position to be prepared to do everything short of buying foreign bonds; DPJ official says will not support Iwata; BOJ decision later this week.
The USD/JPY is down for second session below ¥93 late in the day.
RBA stays on hold at 3.00% as widely expected and reiterates prior sentiment on policy and inflation; Slightly more upbeat on global recovery; Swaps still pricing in much higher chance of steady policy next month; Q4 GDP on tap tomorrow after better than expected CA.
AUD/USD approaching 1.0250 in the wake of RBA, up about 30 pips; EUR/AUD down over 50 pips below 1.2720.
Speakers/Political/In the Papers
(JP) Japan Deputy Governor nominee Nakaso: Will do everything to support the BoJ Gov if selected - confirmation hearings.
(JP) Japan Deputy Governor nominee Iwata: Japan has faced prolonged deflation due to deflationary expectations; Should meet the 2% inflation target in 2 years - confirmation hearings.
(JP) Japan DPJ (opposition) Tsumura: Cannot accept Iwata as the next BoJ Deputy Governor - Financial press.
(JP) Japan Econ Min Amari: Hopes BoJ will achieve 2% inflation target in 2 years - press.
(JP) Japan Center for Economic Research (JCER): Japan's Real JAN GDP estimated at +0.2% m/m v +0.8% prior; 2nd consecutive increase - Nikkei News.
(CN) China Premier Wen: inflationary pressure is large, monetary policy in developed economies will export inflation.
(CN) Former PBoC advisor Li Daokui: 7.5% 2013 GDP target is fairly conservative; China facing large inflation pressure - Financial press.
(AU) Australia Bureau of Agricultural and Resource (ABARES): AUD will remain strong, average US$1.04 in 2013-14 - AFR.
(AU) Poll shows 29% of Australians believe Mineral Rent Resource Tax (MRRT) should be increased, 28% believe it should be eliminated - Australia press.
(NZ) Westpac analyst: Macroprudential measures discussed by the RBNZ are unlikely to be used unless housing affordability deteriorates sharply - New Zealand press.
(KR) HSBC economist: Bank of Korea (BOK) less likely to ease policy in the near term following rebound in new export orders - Korean press.
Currencies
In a choppy price action during the Asian session, the AUD/USD pair rose from the 1.0115 overnight lows toward the 1.02 handle at the start of trade. A strong open from the ASX index buoyed positive sentiment, and the pair broke through the 1.02 level rising over 20 pips through 1.0215 following better than expected January Retail Sales data, eventually reaching a high above 1.0220. While the RBA surprised no one by leaving the cash target rate unchanged at 3.00%, the glowing outlook for global and domestic growth fueled the AUD/USD to new session highs above $1.0240 late in the day.
The USD/JPY was fairly muted throughout U.S. session and the first portion of Asis trade, eventually rising to 93.50 on comments from BoJ Deputy Governor nominee Iwata, showing strong commitment to the 2% inflation target and expressing optimism it could be achieved in 2 years. The USD/JPY dropped about 10 pips after Iwata seemed lukewarm to foreign bond buying, saying there was no need to purchase foreign bonds but it was an option on the table. The USD/JPY continued to decline to 93.35 levels as stock markets indices pared early gains and S&P futures turned negative.
Onshore KRW, TWD, PHP, and MYR, were mixed to unchanged with little direction and remaining stuck in narrow ranges. The USD/CNY reference rate was slightly lower at 6.2797 v 6.2822, as China stock indices pared some of its losses from yesterday's session and the National People's Congress released their annual report on growth targets.
Fixed Income/Commodities
SLV: iShares Silver Trust ETF daily holdings fall to 10,646 tons from 10,650 tons prior (first decline since February 5)
GLD: SPDR Gold Trust ETF daily holdings fall by 0.6 tons to 1,253.3 ton (lowest since 1,251.9 on Aug 2nd; 10th consecutive session of decline)
JGB: (JP) Japan MoF sells ¥2.189T in 0.6% (0.8% prior) 10-yr notes; Avg yield: 0.636% v 0.795% prior; Bid to cover: 2.37x v 2.75x prior (lowest since Jul 2009)
(AU) Australia Newcastle weekly coal exports for week ended Mar 4th: +20.8% w/w
Equities
Hyundai 005380.KR: Hyundai/Kia group decide to end night-shift production at South Korea plants to improve the quality of life of their workers - Korean press.
HMC: Develops method to recycle rare earth minerals - Yomiuri News.
JCP: Aftermarket weakness attributed to chatter of a 10M share secondary offering (4.5% of shares outstanding); -2.0% afterhours
ASNA: Reports Q2 $0.26 v $0.24e, R$1.24B v $1.24Be; +16.2% afterhours