KRW: USD/KRW Uptrend Intact, Local Equities Struggle

• MNI: AUSTRALIA Q4 BIZ INDICATORS INVENTORIES +0.1%
• AUSTRALIA Q4 BIZ INDICATORS GROSS OP PROFITS +5.9%

Natural gas prices were lower on Friday. European gas fell 1.9% to EUR 44.30 to be down 16.6% in February as hopes rose of more flexible EU refilling regulations ahead of next winter and the weather warmed. There were also nascent hopes of a peace deal for Ukraine that would allow Russian gas flows through Ukraine again. Prices troughed late in February at EUR 41.09.

• The argument between the White House and President Zelensky makes a peace deal for Ukraine less likely, but the meeting between the latter and the EU appears to have been tentatively more promising with plans to increase Ukraine’s defences and for a month-long ceasefire at sea and in the air. UK PM Starmer has said he will discuss the results with US President Trump. Zelensky has also said he’s prepared to sign the natural resources deal with the US, which includes energy.
• US gas fell 2.9% to $3.82 on Friday but was still over 24% higher last month. It reached a peak of $4.35 on February 20 and trended lower to month end. Prices had been supported by increased heating demand from a cold snap but the forecast for much of the US is showing above-average temperatures in the second week of March, while the West Coast is likely to see cooler weather, according to Maxar.
• US lower-48 gas production rose 2.9% y/y on Friday while demand fell 10.7% y/y.
• North Asian gas demand has been robust due to colder weather after a mild start to the heating season.

In Tokyo morning trade, JGB futures are weaker and near session lows, -25 compared to settlement levels.

• Cash US tsys are 2-3bps cheaper in today’s Asia-Pac session after an emergency security summit in London on Sunday raised bets of increased European debt supply for defence spending. UK Prime Minister Keir Starmer convened the summit, including France’s Emmanuel Macron, as well as delegations from Canada, Germany, Norway and Turkey, in a bid to strengthen Ukraine’s position, secure a “lasting peace” and plan for security guarantees. (per BBG)
• Cash JGBs are 1-2bps cheaper across benchmarks. The benchmark 10-year yield is 2.0bps higher at 1.399% versus the cycle high of 1.466%.
• Swap rates are 1-2bps higher. Swap spreads are mixed.