HALISTER1: CHINA PREVIEW: FX Reserves Continue Falling, But at Slower Pace

CHINA PREVIEW: FX Reserves Continue Falling, But at Slower Pace

(Bloomberg) -- Shrinkage of China’s FX reserves likely to have slowed in Feb. thanks to stabilization of yuan, better sentiment on the currency and valuation effect, analysts say.
  • Reserves likely fell $44b to $3.18t in Feb., according to average est. in Bloomberg survey; would be fourth monthly drop in row, though pace moderating from Jan.; data due March 7
  • USD/CNY down 0.34% to 6.5540 last month
  • Average CNH-CNY spread at 1 pip last month vs 417 pips in Jan.
  • Dollar Index dropped 1.4% to 98.211 in Feb.
  • UBS economists including Ning Zhang:
    • Capital outflows likely eased with more stable exchange rate, reflected by drop in onshore yuan spot trading volume: $245b in Feb. from $456b in Jan.
    • Exchange-rate movements likely resulted in positive valuation effect of more than $15b
    • Perhaps some downward pressure on reserves from surge in overseas tourism during Lunar New Year holidays
    • Forecasts $30-40b drop in reserves
  • Zhou Hao, Singapore-based economist at Commerzbank:
    • Yuan stabilization suggests FX reserves likely less changed than previous months
    • Not so much FX purchasing activities last month, cushioning reserves and reducing capital outflows
    • Fewer working days in Feb. due to Lunar New Year holiday
    • Forecasts Feb. reserves at $3.2t
  • CICC said in note last month FX reserves may rise for first time since Oct. on dollar weakness, lower trading volume and capital control measures
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Ning Zhang (UBS Global Asset Management Japan Ltd)

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HALISTER1: TAIWAN PREVIEW: Exports Seen Declining for 13th Straight Month

TAIWAN PREVIEW: Exports Seen Declining for 13th Straight Month

(Bloomberg) -- Weak global demand means Taiwan’s exports declined for 13th month in a row in Feb., economists’ forecasts suggest, marking longest stretch since period to Oct. 2009.
  • Exports fell 12.5% y/y following 13.0% decline in Jan., according to median est. in Bloomberg survey; ests. range from -14.7% to -10.0%; data due at 4pm local time on March 7
  • Related data may show imports fell 9.3% y/y and trade surplus widened to $3.7b from $3.5b in Jan.: separate surveys
  • Finance Minister Chang said yesterday Feb. exports fell more than 10% y/y; cited Lunar New Year holidays and Peace Memorial Day long weekend
  • Taiwan’s export orders fell 12.4% y/y in Jan., worse than 10.5% decline est. in Bloomberg survey
  • South Korea’s exports declined 12.2% y/y last month, extending run of negative prints to 14 months, data released March 1 showed
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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HALISTER1: INSIDE ASIA: Yuan Rises; PBOC Says Currency Not Strictly Pegged

INSIDE ASIA: Yuan Rises; PBOC Says Currency Not Strictly Pegged

(Bloomberg) -- Yuan rises for fourth day; People’s Bank of China Deputy Governor Yi says it isn’t “strictly” pegged to the basket of currencies used as a reference, Shanghai Securities News reports.
  • China has allocated more than 3.2t yuan ($490b) in quotas for local-government bond swap program at beginning of this year, 21st Century Business Herald reports; also says the country faces an urgent task to prevent home prices from steep drop
  • Aussie snaps four-day rally after data showed retail sales increased 0.3% in January from month earlier, less than median estimate of a 0.4% gain
  • Won rises for sixth day; South Korea’s foreign reserves fell for fourth straight month to $365.76b in February; Bank of Korea begins process to select 4 members for policy board: Yonhap
  • Yen advances versus dollar; Bank of Japan Governor Kuroda says he’s not considering lowering negative interest rates further at this time, but will use “three dimensions” of qualitative and quantitative easing and negative rates as necessary to ensure price goal is met soon
    • Cash earnings gained 0.4% in January from year earlier, matching median estimate
    • Prime Minister Abe likely to call a general election this year, Hakubun Shimomura, his aide says
    • Abe nominates Makoto Sakurai to the Bank of Japan’s divided board to fill the seat of Sayuri Shirai, who recently voted against expanding monetary stimulus
  • U.S. Treasuries steady, with yield on 10-year bonds at 1.832%; data today may show employers in the world’s largest economy added 195k jobs in February compared with 151k prior month: Bloomberg survey
  • Ringgit snaps six-day decline; Malaysia’s exports probably rose 2.5% in January on year while imports gained 4.9%, leaving trade surplus of 7.6b ringgit ($1.8b), according to Bloomberg survey before data today
  • Peso advances; Philippine consumer prices rose 0.9% in February on year, less than forecast 1.3% increase; banks’ non-performing loans at 1.75% of total at end-November, improving from 1.77% at end-October
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
PBCZ CH (People's Bank Of China)
8301 JP (Bank of Japan)
1206Z KS (Bank of Korea/The)

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HALISTER: Goldman, BofA Dismiss Traders After Getting Taste of ’16 Markets

Goldman, BofA Dismiss Traders After Getting Taste of ’16 Markets

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
GS US (Goldman Sachs Group Inc/The)
BAC US (Bank of America Corp)
JPM US (JPMorgan Chase & Co)
MS US (Morgan Stanley)

People
Daniel Pinto (JPMorgan Chase & Co)
Lloyd Blankfein (Goldman Sachs Group Inc/The)
Thomas Montag (Bank of America Corp)

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HALISTER1: Abe Aide Sees 90% Chance of Japan General Election This Year

Abe Aide Sees 90% Chance of Japan General Election This Year

(Bloomberg) -- Japanese Prime Minister Shinzo Abe is likely to call a general election this year, an aide said, as speculation swirls over whether the prime minister will combine a mandated upper house vote with a poll for the lower house.
  • Hakubun Shimomura, 61, said in an interview Thursday there was a 90 percent chance parliament would be dissolved for an election by year-end.
  • Shimomura previously aired this opinion in a TV interview last month
  • Abe doesn’t have to hold a general election until late 2018
  • See original story here
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Shinzo Abe (Japan)
Hakubun Shimomura (Japan)

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