Thu, May 26, 2022 @ 18:18 GMT
HomeContributorsFundamental AnalysisMarket Update - Asian Session: Australia CPI Returns To RBA Target Range

Market Update – Asian Session: Australia CPI Returns To RBA Target Range

Asia Mid-Session Market Update: Australia CPI returns to RBA target range; Risk-on flows continue on earnings and Trump tax cut speculation

US Session Highlights

(US) Apr Philadelphia Fed Non-Manufacturing General Regional Business Conditions: 30.1 v 35.4 prior

(CO) Colombia Central Bank Gov Echavarria: Sees room to cut interest rates – financial press

(US) Weekly Redbook Sales w/e Apr 22nd +1.7% y/y; Apr MTD +1.2% m/m; Apr MTD +1.9% y/y


(US) MAR NEW HOME SALES: 621K V 584KE (strongest level since July)

(US) APR CONSUMER CONFIDENCE: 120.3 V 122.5E (outlook for jobs market was also less upbeat)

Stock markets continue to extend the rally that started the week on renewed confidence in Euro area stability and strong earnings data expectations. S&P profits were estimated to have risen 11% in Q1, the most since 2011. Talk of a new tax deal also helped the Dow break 21,000 and the NASDAQ pierce the 6,000 ceiling for the first time.

US markets on close: Dow 1.1%, S&P500 0.6%, Nasdaq 0.7%

Best Sector in S&P500: Materials

Worst Sector in S&P500: Telecommunication

Biggest gainers: CAT +7.9%; FCX +7.1%; WAT +6.9%; NFLX +5.8%

Biggest losers: R -13.8%; ESRX -10.7%; TROW -4.2%; LH -3.9%

At the close: VIX 10.8 (-0.1pts); Treasuries: 2-yr 1.28% (+5bps), 10-yr 2.33% (+5bps), 30-yr 2.98% (+5bps)

US movers afterhours

IRBT Reports Q1 $0.58 v $0.26e, R$168.5M v $151Me; +9.9% afterhours

EW Reports Q1 $0.94 v $0.82e, R$884M v $777Me- Guides Q2 $0.82-0.92 v $0.86e, R$810-850M v $817Me – Raises FY17 $3.43-3.55 v $3.40e; +8.5% afterhours

DECK Announces review of strategic alternatives; +5.7% afterhours

CMG Reports Q1 $1.60 v $1.28e, R$1.07B v $1.05Be; Discloses recent incident of unauthorized activity on its payment network; +2.9% afterhours

COF Reports Q1 $1.75 v $1.93e, R$6.5B v $6.59Be; -3.3% afterhours

DFS Reports Q1 $1.43 v $1.42e, R$1.89B v $1.81Be; Provision for loan losses $586M v $424M y/y; -3.5% afterhours

CREE Reports Q3 $0.11 v $0.14e, R$341.5M v $325Me; to form JV with China’s San’an Optoelectronics Co; -7.5% afterhours

X Reports Q1 -$0.83 v +$0.30e, R$2.73B v $2.92Be; Cuts FY17 adjusted EBITDA $1.1B v $510M y/y (prior FY17 adjusted EBITDA $1.3B); -16.9% afterhours

Key economic data

(AU) AUSTRALIA Q1 CONSUMER PRICES (CPI) Q/Q: 0.5% V 0.6%E; Y/Y: 2.1% (highest since Q2 of 2014) V 2.2%E; TRIMMED MEAN Q/Q: 0.5% V 0.5%E ; Y/Y: 1.9% (5-quarter high) V 1.8%E


(NZ) New Zealand Mar Net Migration: 6.1K v 6.0K prior


(US) Kelley Blue Book: New-car sales to fall 3% to 1.45M units in April 2017; 2017 forecast calls for 16.8-17.3M in sales, first y/y decline after 7 years of increases

Asia Session Notable Observations, Speakers and Press

Asian equity indices remain bid, tracking 2nd straight day of strong gains on Wall St. Optimism from weekend French election has been displaced by expectation of pro-business tax reform announcement from the White House on Wednesday. One press report anticipates the plan to feature tax cuts for small pass-through businesses to 15% from 39.6%, along with a 10% levy on US companies offshore profits. Treasury Sec Mnuchin and EA Cohn have met with Congressional leaders Tues evening, and White House suggests "everyone is on the same page". The tax plan will also reportedly not contain House Speaker Ryan’s border-adjustment proposal.

In FX, dollar majors were rangebound for much of the Asia session. USD/JPY tracked rick-on flows to the upside, regaining ¥111 handle to approach 111.50 for a 2-week high. AUD/USD was also volatile following mixed Q1 CPI data from Australia. While headline y/y moved back into RBA 2-3% target range for the first time in 2 years, it missed expectations, sending AUD down over 30pips toward $0.75 level. Analysts also noted that much of the price increase was in auto fuel and housing, ominously implying living costs are outpacing wage gains. Capital Economics said it no longer expects RBA rate cuts after the CPI data, but Barclays believes RBA will wait for CPI to be consistent above 2% before signalling policy shifts.


(CN) China Iron and Steel Association (CISA): Increase in domestic output and decline in export demand to weigh on prices – press

(CN) China NDRC: To monitor long term coal supply contract implementation

(CN) China’s monetary policy does not need to be too tight – Chinese press citing unidentified analysts


(JP) Japan Fin Min Aso: Regional economies are experiencing moderate recovery

Australia/New Zealand

(AU) Capital Economics: No longer expect RBA to cut rates further after today’s CPI data – SMH

(NZ) New Zealand’s Home Loan Affordability Reports sees prices in Auckland the least affordable on record (since 2004) – NZ press


(KR) US military reportedly starts moving THAAD anti-ballistic missile system into planned site in South Korea – Korea press

Asian Equity Indices/Futures (00:00ET)

Nikkei +0.7%, Hang Seng +0.6%, Shanghai Composite +0.4%, ASX200 +0.7%, Kospi +0.3%

Equity Futures: S&P500 flat; Nasdaq flat, Dax +0.1%, FTSE100 flat

FX ranges/Commodities/Fixed Income (00:00ET)

EUR 1.0920-1.0945; JPY 110.95-111.35; AUD 0.7505-0.7555; NZD 0.6920-0.6955

June Gold -0.1% at 1,266/oz; June Crude Oil -0.2% at $49.44/brl; July Copper -0.1% at $2.60/lb

(US) Weekly API Oil Inventories: Crude: +0.9M v -0.8M prior; first buld in 4 weeks

SLV iShares Silver Trust ETF daily holdings rise to 10,178 tonnes from 10,119 tonnes prior

GLD SPDR Gold Trust ETF daily holdings fall 5.9 tonnes to 854.3 tonnes


(CN) PBOC to inject combined CNY80B v CNY80B prior in 7-day, 14-day and 28-day reverse repos, 7th straight injection

(CN) China MoF sells 3-yr bonds; avg yield 3.23%; bid-to-cover 1.59x

Asia equities / Notables / movers by sector


A2 Milk (A2M) +6.7%; Harbour Asset Management announces notice of initial substantial holder with 5.1% stake

BHP (BHP) +0.7%; Q3 production

Beadell (BDR) -16.7%; Q3 production


Mitsui OSK (9104) +2.4%; FY17 earnings speculation

Hitachi (6501) +3.1%; May sell chip unit

Toshiba (6502) +2.7%; May change auditing firms

Asahi Kasei (3407) +1.4%; FY16/17 earnings speculation

Hong Kong

China Vanke (2202) -3.1%; suspected to sell property in 2 Xian projects illegally

Wynn Macau (1128) +4.8%; Q1 results

China CITIC (998) -0.8%; Q1 results

Trade The News
All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.

Featured Analysis

Learn Forex Trading