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Currencies And Equities Higher After Comments

General Trend:

  • Equity markets rise as China President Xi strikes conciliatory tone; makes no reference to possible countermeasures on trade
  • China President Xi pledges to open up auto sector and reduce auto-related import tariffs; follows reported request by Trump Administration officials.
  • Regional auto names higher after China President Xi noted he would open up auto sector to allow increased % of foreign ownership and lower auto import tariffs; Chinese auto makers lower
  • Nasdaq Futures rise over 1.5%
  • Aluminum producers rise as prices increase amid US sanctions on Russian elites
  • Aussie outperforms on comments from China’s Xi
  • Australia March NAB business confidence declines for 2nd straight month
  • Fed’s Kaplan sees ‘little bit’ flatter interest rate path likely in 2019; watching yield curve very carefully
  • China March CPI and PPI expected on Wednesday’s session

Headlines/Economic Data

Japan

  • Nikkei 225 opened -0.4%; closed +0.5%
  • TOPIX Iron & Steel index +1.8%, Electric Appliances +1.3%
  • Japanese automakers gain after comments by China President Xi; Honda up over 2%
  • (JP) BOJ Gov Kuroda: Will continue to implement powerful easing – inauguration press conference (overnight)
  • (JP) Japan Fin Min Aso: will work to restore trust in finance ministry, was a mistake to ask school officials to lie about Moritomo

Korea

  • Kospi opened -0.2%
  • (KR) Concerns are growing over the negative impact of the strengthening won on Korea’s exports – Korean press
  • (KR) South Korea Fin Min Kim Dong-Yeon: Seeking cooperation from smaller firms to create quality jobs to reduce the country’s high youth unemployment rate

China/Hong Kong

  • Hang Seng opened -0.1%, Shanghai Composite +0.2%
  • Hang Seng Materials index +2.8%, Info Tech +1.6%, Property/Construction +1.5%, Energy +1.1%, Financials +1.1%, Services +1.1%
  • Shanghai Composite Property sub-index rises over 1%
  • (CN) China President Xi: China GDP has grown on avg 9.5% over last 40-yrs; China reform and opening will definitely succeed; Cold war mentality is out of place, its a zero sum game, isolationism will hit walls; China to lower auto import tariff later this year – remarks at Boao conference
  • (CN) Unigroup plans to invest $100B on chip making in 10 years – Chinese Press
  • (CN) China PBoC Open Market Operation (OMO): Skips v injects CNY10B in 7-day reserve repos prior; Net: CNY30B drain v CNY30B drain prior
  • (CN) China PBoC sets yuan reference rate at 6.3071 v 6.3114 prior
  • (CN) China Agricultural Ministry: Expects imports of soybeans to be ‘basically normal’ in the short-term
  • (CN) China Vice Commerce Min Qian Keming: Still hopes to negotiate with US on trade issues; won’t back down should a trade war break out

Australia/New Zealand

  • ASX 200 opened -0.2%
  • ASX 200 Resources index +1.4%, Telecom +1.3%, Financials +1.1%, Energy +0.8%
  • (NZ) NEW ZEALAND Q1 NZIER BUSINESS CONFIDENCE: -11 V -12 PRIOR; ADJ BUSINESS CONFIDENCE: -9 V -11 PRIOR
  • ResApp, [-6%], RAP.AU Reports positive preliminary results from clinical proof-of-concept studies in obstructive sleep apnea
  • (AU) Australia sells A$150M v A$150M indicated in Nov 21 2027 index bonds, avg yield 0.7075%, bid to cover 2.73x
  • (AU) Australia Mar NAB Business Confidence: 7 v 9 prior; Conditions: 14 v 20 prior
  • Godfreys, [+43%], GFY.AU Co-founder launches takeover bid at A$0.32/shr
  • (AU) Banks in Australia said to be noting the need to raise mortgage rates to offset rise in wholesale funding costs – Australian Press

Other Asia

  • (MY) Malaysia: Sets May 9th as date for general election

North America

  • US equity markets ended higher: Dow +0.2%, S&P500 +0.3%, Nasdaq +0.5%, Russell 2000 +0.1%
  • S&P500 Health Care +1%, Technology +0.8%
  • (US) FBI raids office of Trump’s longtime personal lawyer Michael Cohen; search doesn’t appear to be directly related to Mr. Mueller’s investigation – New York Times
  • (MX) Mexico to review all forms of cooperation with the United States, including efforts to combat powerful drug cartels – financial press
  • (US) Fed’s Kaplan: China and US might be well served ‘to lower heat on trade rhetoric’
  • Monsanto [MON]: Dept of Justice reportedly will approve Bayer/Monsanto deal in exchange for additional concessions – press

Europe

  • (EU) ECB’s Coeure: growth outlook doesn’t warrant change in monetary policy stance – radio interview
  • (EU) ECB’s Praet: inflation developments have stayed subdued
  • (UK) Mar BRC Sales LFL y/y: +1.4% v -0.3%e; Retail Spending y/y: 2.0% v 3.8% prior (smallest increase since April 2016); Total Retail Sales y/y: 2.3% v 1.6% prior (highest since April 2017)
  • LVMH [MC.FR]: Reports Q1 Rev €10.9B v €10.6Be
  • De La Rue [DLAR.UK]: Reportedly activist investor Crystal Amber Fund is building a stake – Sky News

Levels as of 02:00ET

  • Hang Seng +1.5%; Shanghai Composite +0.6%; Kospi +0.3%; ASX +0.8%
  • Equity Futures: S&P500 +1.2%; Nasdaq100 +1.6%, Dax +1.0%; FTSE100 +0.6%
  • EUR 1.2328-1.2307; JPY 107.24-106.62; AUD 0.7738-0.7693;NZD 0.7332-0.7304
  • Jun Gold -0.3% at $1,335/oz; May Crude Oil +0.6% at $63.81/brl; May Copper +0.9% at $3.10/lb
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