General Trend:
- Sectors trading generally lower include Materials, Financials, Energy and Auto [similar sector performance was seen during earlier NY session]
- Japanese financials decline amid recent focus on US bank earnings and lower Treasury yields
- Shanghai Property index outperforms, new home prices slowed y/y in March
- Automaker BAIC declines over 4% in HK, guided Q1 net -95% y/y
- Cathay Pacific reports March passenger traffic down 90% y/y
- Australian quarterly production updates in focus (Woodside Petroleum, Whitehaven Coal)
- Rio Tinto is expected to issue Q1 production update on Friday (April 17th)
- NZD/USD declines in Asia; RBNZ Gov said the central bank has not ruled out negative rates, ‘shadow’ official cash rate is significantly negative
- South Korea proposes KRW7.6T second extra budget, reiterated will not issue bonds to finance extra budget
- Bank of Korea announces the nominees for its monetary policy board
- Representatives of US Casinos said to be discussing possible ways to reopen the Las Vegas strip (US financial press)
- Taiwan Semi expected to report Q1 results today
- US companies expected to report earnings during the NY morning include Abbott Labs, Bank of NY, BlackRock, Morgan Stanley and Rite Aid.
- US weekly initial jobless claims due later on Thursday (expected at 5.5M vs 6.6M prior)
- Trump is due to speak with US Governors on Thursday about reopening the economy
- G7 expected to hold video conference on Thursday (April 16th)
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -0.6%
- (AU) AUSTRALIA MAR EMPLOYMENT CHANGE: +5.9K V -30.0KE; UNEMPLOYMENT RATE: 5.2% V 5.4%E
- (AU) AUSTRALIA APR CONSUMER INFLATION EXPECTATION: 4.6% V 4.0% PRIOR
- WPL.AU Reports Q1 production 24.2 MMBOE v 25.7 q/q, +12% y/y; Rev $1.08B v $1.22B y/y; Affirms FY20 production
- SPL.AU Announces SPL7013 shows significant activity against coronavirus
- (AU) Reserve Bank of Australia (RBA): Excess cash at exchange settlement (ES) accounts at A$87.0B v A$83.5B prior
- VAH.AU Trading halted; Not currently in position to make announcement on financial position or restructuring talks remain ongoing
- (AU) Reserve Bank of Australia (RBA) adds A$333M to banking system through repos v A$1.55B prior
- (NZ) Reserve Bank of New Zealand (RBNZ) purchases NZ$140M in LGFA Bonds v NZ$150M sought in QE operations
- (NZ) Reserve Bank of New Zealand (RBNZ) Deputy Gov Bascand: Planning additional stress tests for banks, banks will face pressure in worst case scenario
- (NZ) Reserve Bank of New Zealand (RBNZ) Gov Orr: This economic shock is a fiscal policy challenge; monetary policy is a support to fiscal; Have NOT ruled out negative rates, shadow OCR is significantly negative – speaking to parliament
- (NZ) Reserve Bank of New Zealand (RBNZ) Assistant Gov Hawkesby: Monetary policy cannot offset virus impact but can soften the blow – speaking to parliament
- (AU) Reserve Bank of Australia (RBA) offers to buy total of A$1.0B in bonds v A$1.5B prior
Japan
- Nikkei 225 opened -1.2%
- (JP) Japan April economic assessment expected to be described as “worsening sharply” from March reports “severe” – Nikkei
- (JP) Japan Investors Net Buying of Foreign Bonds: -¥201.3B v -¥1.05T prior week; Foreign Net Buying of Japan Stocks: -¥15.5B v +¥324.2B prior week
- (JP) Senior IMF official: Bank of Japan (BOJ) rate cuts will have limited effect in stimulating economy, may hurt the financial sector; encourages use of swap lines
- 7203.JP To halt production at all domestic plants May 1st and May 11th and stop production at 5 Japan plants from May 12th and onward
- (JP) Japan Chief Cabinet Sec Suga: It is important to compile extra budget quickly for economic measures
- 6758.JP Said to be planning only limited production of Playstation 5 in first year (5-6M units); release still on track for end of the year – press
Korea
- Kospi opened -1.0%
- (KR) South Korea ruling Democratic Party wins majority of parliament seats , 180 seats (1st time in 16-years), will not have to form coalition
- (KR) Bank of Korea (BOK) reported to name 4 new Policy members – Korea press
- (KR) South Korea Finance Ministry: Proposes KRW7.6T extra budget (prior planned for KRW7.1T) , reiterates will not issue bonds to finance extra budget
China/Hong Kong
- Hang Seng opened -0.5%; Shanghai Composite opened -0.5%
- (CN) According to a US State Dept report China may be secretly conducting nuclear tests with very low explosive power; there is no proof, but there is a series of activities that “raise concerns” – press
- (CN) CHINA MAR NEW HOMES PRICES M/M: 0.1% V 0.0% PRIOR; Y/Y: 5.3% V 5.8% PRIOR
- (HK) Hong Kong Financial Sec Chan: Hong Kong likely to revise 2020 GDP outlook lower – press
- (CN) China National Health Commission Coronavirus Update for April 15th: 46 additional cases (34 imported) v 46 prior; Additional deaths: 0 v 1 prior; Additional Asymptomatic cases 64 v 57 prior
- (CN) China Mar Foreign Direct Investment (FDI) CNY81.8B, -14.1% y/y
- (CN) China PBOC sets Yuan reference rate: 7.0714 v 7.0402 prior
- (CN) China PBoC Open Market Operation (OMO): Skips Reserve Repo Operations for the 11th consecutive session; Net CNY0B v CNY0B prior
- (CN) China PBoC said to soon run simulations for some commercial lenders to run trials of its digital currency in Suzhou, Xiong’an, Chengdu and Shenzhen – financial press
North America
- (US) President Trump: Data suggests US has suggested peak on new cases; To unveil new guidelines tomorrow – daily coronavirus press conference
- (US) US, Nevada Casino Representatives talking about how to reopen Las Vegas casino Strip – press
- (MX) Fitch cuts Mexico sovereign rating to lowest level of investment grade; cuts rating to BBB-; outlook Stable
- UAL CEO: Redesigned network to be -90% capacity while complying with cares act; this weekend to further reduce capacity by 10% of what had been planned for May, and expect similar move for June – letter to employees
Europe
- (DE) German Chancellor Merkel: have agreed on gradual reopening of schools starting May 4th; Retail spaces under 800 sq meters may reopen; Will ban large public events until at least Aug 31st
- (UK) MAR BRC SALES LFL Y/Y: -3.5% V -5.5%E
- (IE) Ireland Apr Consumer Confidence: 42.6 v 77.3 prior (largest m/m decline on record)
Levels as of 1:15ET
- Hang Seng -0.9%; Shanghai Composite +0.0%; Kospi -0.2%; Nikkei225 -1.6%; ASX 200 -1.4%
- Equity Futures: S&P500 -0.5%; Nasdaq100 -0.5%, Dax +0.1%; FTSE100 -0.2%
- EUR 1.0913-1.0865; JPY 108.08-107.36; AUD 0.6323-0.6265; NZD 0.6002-0.5942
- Commodity Futures: Gold +0.2% at $1,743/oz; Crude Oil +0.1% at $19.88/brl; Copper -0.1% at $2.29/lb