• Asian stocks traded negatively with global risk appetite subdued by growth concerns and after trade-related fears resurfaced
• US President Trump said he will not meet Chinese President Xi before the March 1st deadline
• UK PM May has approached Labour MPs to table an amendment guaranteeing that the UK will match EU workers’ rights post-Brexit
• Looking ahead, highlights include German Trade Balance, Norwegian GDP, French & Italian Industrial Output, Canadian Employment Data, Fed's Daly Speaking
• EARNINGS: Hasbro, Exelon Corp, Ventas, Phillips 66

ASIA-PAC

Asian stocks traded negative with global risk appetite subdued by growth concerns and after trade-related fears resurfaced. ASX 200 (-0.3%) was led lower by underperformance in the energy sector following the recent drop in crude prices and with financials downbeat amid a management shake-up due to fraud allegations at NAB. Nikkei 225 (-1.8%) was pressured by a firmer currency and as individual stocks also reacted to earnings, while the Hang Seng (-0.4%) suffered a bout of post-holiday blues on return from the Lunar New Year celebrations, as hopes for a quick trade deal were dampened after US President Trump ruled out meeting with his Chinese counterpart prior to the tariff deadline. In addition, reports suggested that President Trump is likely to sign an order banning Chinese telecoms equipment next week which subsequently weighed on ZTE shares. Finally, 10yr JGBs were higher as the widespread risk averse tone underpinned safe-haven demand and BoJ presence in the market for nearly JPY 1.2tln of JGBs with maturities of up to 10yrs, which also coincided with declines in long-term yields with the 20yr, 30yr and 40yr yields at their lowest in more than 2 years.

US President Trump said he will not meet Chinese President Xi before the March 1st deadline, while it was separately reported that President Trump is likely to sign an order banning Chinese telecoms equipment next week. (Newswires)

UK/EU

UK PM May approached Labour MPs to table an amendment for the withdrawal motion and will guarantee the UK matches EU regarding workers’ rights post-Brexit following a deal with the Labour Party. (The Sun)

European Council President Tusk told UK PM May that UK opposition Labour Party leader Corbyn's Brexit plan could be a promising way out of the current impasse. Elsewhere, there were also comments from German Finance Minister Scholz that the ball is in UK Parliament’s court and that there will be no renegotiation of the Brexit deal. (BuzzFeed/Newswires)

ECB's Coeure (Neutral) said we do not have enough evidence to conclude that Eurozone is facing a lasting and serious slowdown, while he added that a no-deal Brexit is definitely a near term material risk. (Newswires)

FX

In FX markets, the greenback was slightly firmer after having rebounded from the prior day’s fluctuations, while its major counterparts EUR/USD and GBP/USD were steady as most major pairs struggled for direction overnight. Elsewhere, USD/JPY and JPY-crosses languished as the risk averse tone spurred flows into the JPY, while antipodeans once again took focus with AUD/USD the underperformer after the RBA Statement on Monetary Policy in which it reiterated the more evenly balanced view on rates and lowered its projections for economic growth and inflation through to 2020.

RBA Statement on Monetary Policy stated the probability of rate hike or cut is more evenly balanced than previous and that the board does not see a strong case for a near term adjustment in rates. RBA noted that higher rates would be appropriate at some point if progress is made but added that they might lower rates if there is sustained increase in unemployment and too low inflation, while it cut its GDP and inflation forecasts through to June 2020. (Newswires)

COMMODITIES

Commodities were kept subdued overnight in which WTI crude futures remained pressured following the prior day’s losses and brief slip to below the USD 52.00/bbl as prices were dragged by the risk averse tone and global growth concerns. Elsewhere, gold prices was uneventful as the greenback stayed range-bound and copper lacked demand amid the broad downbeat tone, as well as the week-long absence of its main buyer.
 

TransCanada is said to declare force majeure on Keystone crude shipments. (Newswires)

US senators introduced a bipartisan bill to combat OPEC price fixing. (Newswires)

GEOPOLITICS

US plans to withdraw all troops from Syria by the end of April. (WSJ)

US and South Korea will announce military exercise plan following the Trump-Kim summit according to sources, while there were also reports that US asked North Korea to dismantle all missiles. (Yonhap)
 

US

Treasuries caught a bid on Thursday, in line with their European counterparts, amid fear of a global slowdown after the EC downgraded Eurozone economic growth forecasts for 2019 and following a dovish BoE interest rate decision. The complex extended gains after NEC Director Kudlow announced that the US and Chinese leaders are unlikely to meet before the official March 1st deadline. Most of the action was concentrated in the belly of the curve where yields were lower by c.5bps at settlement. The US Treasury sold USD 19bln of 30-year bonds today in what could be considered a decent auction. Demand was evident with the auction coming in on the screws at 3.022%, the lowest yield since July 2018 and below the six-auction tail size average of 0.45bps. Spreads widened across the curve. Directs took 17%, their largest share since December 2014, however indirects took their smallest share since November 2016. US T-note futures (H9) settled 12+ ticks higher at 122-09.

Fed's Bullard (Voter, Dove) said FOMC has moved in a more dovish direction and needs to tread carefully moving forward amid weak inflation and other signals the economy is facing greater risks than had expected. Bullard also stated the Fed is likely to end up with a larger than anticipated balance sheet and that he considers current level of rates as restrictive, while he sees growth this year at 2.5% and considerably weaker than the prior year, with risks for an even sharper slowdown. (Newswires)