General Trend:
- Trump commented on Tuesday morning: Trade talks with China have not collapsed; we continue to have dialogue going with China
- Chinese equities rise amid focus on trade; bond yields decline after weaker April data, previously announced targeted RRR cut partially takes effect
- Nissan Motor and Takeda decline on outlooks, weigh on Nikkei
- Japan megabank earnings seen after the close
- Taiwan’s Hon Hai declines on weaker than expected earnings
- Aussie y/y wages hold steady in Q1
- BoJ Gov Kuroda: Not considering additional easing now
- Korean Won (KRW) weakens amid disappointing jobs data
- China Tech earnings in focus: Tencent and Alibaba are due to report later today
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.1%
- (AU) AUSTRALIA Q1 WAGE PRICE INDEX Q/Q: 0.5% V 0.6%E; Y/Y: 2.3% V 2.3%E
- (AU) Australia May Westpac Consumer Confidence Index: 101.3 v 100.7 prior; m/m: 0.6% v 1.9% prior
- (AU) Australia sells A$900M v A$900M indicated in 2.75% April 2024 bonds, avg yield 1.3028%, bid to cover 2.84x
- VLW.AU Gives Q3 update: sales 783; Both carried forward sales and new sales are taking longer than anticipated to settle; Will not give guidance for FY19
- SBM.AU To acquire Canada’s Atlantic Gold Corp for C$802M; announces A$490M entitlement offering at A$2.89/share
Japan
- Nikkei 225 opened +0.2%
- (JP) BoJ Gov Kuroda: Reiterates BoJ commitment is vital to keep inflation stable, will consider additional easing if price momentum is lost (options include rates, asset purchases), not considering additional easing now
- 4568.JP FDA votes 12-3 in favor of Tenosynovial treatment of Giant Cell Tumor; Benefit of drug outweights the risks; FDA panel votes 3-8 against approval of quizartinib
- 6740.JP Said to consider cutting 1,000 jobs (20% of total workforce), expected to announce structural reforms and ¥70B impairment on Hakusan plant alongside full-year earnings today – Japanese Press
- 7201.JP Reports FY18/19 Net ¥746.9B adj v ¥319.1B y/y; Op ¥318.2B v ¥574.8B y/y; Rev ¥11.6T v ¥12.0T y/y; Issues investigation report on former Chairman Ghosn misconduct
- (JP) Japan Apr Money Supply M2 y/y: 2.6% v 2.3%e; M3 y/y: 2.2% v 2.1%e
- (JP) Japan Fin Min Aso: Sales tax increase to 10% in Oct needed for social security
Korea
- Kospi opened -0.1%
- (KR) South Korea Apr Unemployment Rate: 4.1% v 3.8%e
- (KR) South Korea Fin Min Hong: Reiterates will respond to any herd behavior in currency market if seen. FX market volatility are increasing
- (KR) South Korea sells 2-yr Monetary Stabilization Bonds (MSB), avg yield 1.725% v 1.76% prior
China/Hong Kong
- Hang Seng opened +0.2%; Shanghai Composite opened +0.7%
- (CN) CHINA APR INDUSTRIAL PRODUCTION Y/Y: 5.4% V 6.5%E; YTD Y/Y: 6.2% V 6.5%E
- (CN) China National Bureau of Statistics (NBS): Fluctuations in industrial production partially due to VAT reduction; To properly adopt countercyclical adjustment on economy – comments after April data releases
- (CN) CHINA APR RETAIL SALES Y/Y: 7.2% V 8.6%E (lowest level since May 2003); RETAIL SALES YTD Y/Y: 8.0% V 8.4%E
- (CN) China Apr Surveyed Jobless Rate: 5.0% v 5.2% prior
- (CN) China Foreign Ministry spokesperson Geng Shuang: US repeatedly tried to change the terms of the negotiations midway through the talks, tried to force China to increase the volume of goods it was willing to buy from the US as part of agreement, going against agreement made in Dec
- (CN) China PBoC: First phase of previously announced lower RRR adjustment is effective on Wed (May 15th), to release ~CNY100B in long-term funds
- (CN) China Global Times Editor-in-chief Hu Xijin: trade dispute may last longer than many think it will
- (CN) China PBoC Open Market Operation (OMO): Skips for 4th consecutive session: Net injection: CNY10B drain v CNY267.4B 1-yr targeted MLF prior
- (CN) China PBoC sets yuan reference rate: 6.8649 v 6.8365 prior (weakest fix since Dec 27 2018)
- (US) US President Trump suggests that China will ease to offset impact of trade war and if the Fed were to match it they would win – tweet
- (CN) China Apr YTD Fixed Urban Assets Y/Y: 6.1% v 6.4%e
- (CN) China Apr Property Investment YTD y/y: 11.9% v 11.8% prior
- (CN) China President Xi: International situation is more volatile and uncertain – speaking at Asian Civilizations Conference
Other Asia
- STEL.SG Reports Q4 (S$) net 773M v 770M y/y; EBITDA B v 1.24B y/y; Rev 4.34B v 4.26B y/y; Guides initial FY20 EBITDA stable y/y; Rev higher by mid single digits, FCF ~S$2.1B
- 2382.TW Exec: Moving operations out of China are not cheaper than facing tariffs, due to logistical costs and lack of supply chains – post earnings comments
North America
- (US) Weekly API Oil Inventories: Crude: +8.6M v +2.8M prior
- (US) Canada Foreign Minister Freeland’s scheduled visit tomorrow said to come after movement on steel and aluminum tariffs, but deal sill likely far off – press
- (US) Fed’s Daly (dove, non-voter): US economic recovery and expansion don’t look as sluggish in context of financial crisis and aging population
- (CN) US President Trump is expected to sign executive order this week which bans US companies from using telecom equipment that poses national security risks – US financial press
- (MX) Mexico Economy Min: Thinks officials are close to negotiating the lifting of US tariffs on steel and aluminum – financial press
Europe
- (UK) Labour Leader Corbyn reiterated to PM May today that Labour will not back her Brexit plan without concessions
- (UK) Govt confirms it will put Brexit bill to a vote in Parliament the week of June 3rd
Levels as of 1:20 ET
- Nikkei 225, +0.4%, ASX 200 +0.8%, Hang Seng +0.7%; Shanghai Composite +1.3%; Kospi +0.6%
- Equity Futures: S&P500 +0.2%; Nasdaq100 +0.3%, Dax +0.1%; FTSE100 +0.3%
- EUR 1.1211-1.1200 ; JPY 109.69-109.51 ; AUD 0.6949-0.6921 ;NZD 0.6579-0.6562
- Gold flat at $1,296/oz; Crude Oil -0.7% at $61.36/brl; Copper +0.5% at $2.736/lb
