Asia Mid-Session Market Update: New Zealand unemployment rate matches multi-year lows, but wage growth stays suppressed; AUD, ASX200 slide on lower iron ore prices
US Session Highlights
(US) Pres Trump tweets: "Our country needs a good ‘shutdown’ in September to fix mess!"
(US) House Freedom Caucus Chair Meadows (R-NC): GOP still a handful of votes short in the House on AHCA healthcare bill – press
(US) April ISM New York: 55.8 v 56.5 prior
Stock markets traded sideways for the most part on poor auto sales numbers and few other data points. At close, Blue Chips and the broader market managed to post small gains. The best performing sector of S&P were the Industrials +0.5%, worst sector, Consumer Staples -0.7%. Bonds opened lower, sending yield to 2.34% as the reflation trade seemed to gain traction. Eventually FI markets rallied, sending yield back down to 2.28%.
US markets on close: Dow +0.2%, S&P500 +0.1%, Nasdaq +0.1%
Best Sector in S&P500: Industrials
Worst Sector in S&P500: Consumer Staples and Energy
Biggest gainers: COH +11.4%; MLM +7.6%; CMI +6.1%
Biggest losers: ADM -8.9%; MOS -7.2%; NRG -5.4%
At the close: VIX 10.59 (+0.5pts); Treasuries: 2-yr 1.26% (flat), 10-yr 2.29% (-3bps), 30-yr 2.98% (-3bps)
US movers afterhours
ETSY Reports Q1 $0.00 v $0.00e, R$96.9M v $98.6Me; names Josh Silverman as CEO; +15.7% afterhours
OB To Be Acquired By Intact Financial Corporation for $18.10/shr in cash, valued at $1.7B; +15.3% afterhours
FEYE Reports Q1 -$0.09 v -$0.26e, R$173.7M v $164Me; Expects to be profitable from 2018 on, incl Q417; +14.7% afterhours
WTW Reports Q1 +$0.16 v -$0.05e, R$329M v $323Me; 13.7% afterhours
FSLR Reports Q1 +$0.25 v -$0.13e, R892M v $699Me; +8.3% afterhours
MDLZ Reports Q1 $0.53 v $0.50e, R$6.41B v $6.37Be; +2.8% afterhours
AAPL Reports Q2 $2.10 v $2.02e, R$52.9B v $52.6Be; raises dividend 10.5% to $0.63 from $0.57 (indicated yield 1.71%); increases buyback program by $35B (4.4% of market cap) to $210B; iPhone shipments 50.8M v 51.2M y/y (v 52Me); -1.8% afterhours
APC Reports Q1 -$0.60 adj v -$0.23e (unclear if comp), R$3.77B v $2.66Be; -2.5% afterhours
TWLO Reports Q1 -$0.04 v -$0.07e, R$87.4M v $83.5Me; Guides Q2 -$0.11 to -$0.11 v -$0.08e, R$85.5-87.5M v $87.6Me; -29% afterhours
Following extended session:
PRGO: Discloses DOJ investigation related to drug pricing
CTXS: Said to be working with Goldman on a possible sale – press
Key economic data
(NZ) NEW ZEALAND Q1 UNEMPLOYMENT RATE: 4.9% (matches lowest rate since Q4 of 2008) V 5.1%E; EMPLOYMENT CHANGE Q/Q: 1.2% V 0.8%E; Y/Y:5.7% V 5.3%E
(AU) AUSTRALIA APR AIG PERF OF SERVICES INDEX:53.0 V 51.7 PRIOR; 2nd straight expansion and 3-month high
(UK) APR BRC SHOP PRICE INDEX Y/Y: -0.5% V -0.5%E; 48th consecutive decline
(VN) Vietnam Feb PMI Manufacturing: 54.1 v 54.6 prior
Asia Session Notable Observations, Speakers and Press
Asian equities trading mixed in the wake of modest gains on Wall St, though volatility is also compressed ahead of tomorrow’s FOMC decision and Japan and Korea closed for holiday. S&P futures are modestly lower, while Nasdaq futures are weighed down by disappointing earnings from Apple after market close. Oil futures were up over 1% on larger than expected draw in API inventories.
In FX, NZD/USD spiked up some 30pips on the release of lower than expected New Zealand unemployment rate as it matched the lows not seen since late 2008, however half of those gains were erased in later Asian hours as traders noted low wage growth and limited expectations of altering RBNZ policy path. AUD/USD also came under some pressure late in the day, testing below $0.75 handle, just as ASX200 index fell to a 1-week low below 5,900, with weakness in the metals sector attributed to a steep 6% drop in Dalian iron ore prices.
China
(CN) Out of 1.1K publicly traded companies in China to post results so far, about 60% project rising profits or reversal from loss to profit for H1 period – Chinese press
(CN) China CBRC said to approve CCB and Agbank’s debt to equity swap units – Chinese Press
Australia
(AU) Australia Trade Min Ciobo: TPP is still possible without US involvement
Korea
(KR) According to 38 North, North Korea appears to continue activity at its nuclear test site – press
Asian Equity Indices/Futures (00:30ET)
Nikkei closed, Hang Seng +0.3%, Shanghai Composite -0.3%, ASX200 -1.1%, Kospi closed
Equity Futures: S&P500 -0.1%; Nasdaq -0.3%, Dax -0.1%, FTSE100 -0.2%
FX ranges/Commodities/Fixed Income (03:00ET)
EUR 1.0920-1.0935; JPY 111.95-112.07; AUD 0.7500-0.7545; NZD 0.6930-0.6970
June Gold flat at 1,256/oz; June Crude Oil +0.6% at $47.94/brl; July Copper -1.1% at $2.61/lb
iShares Silver Trust ETF daily holdings rise to 10,417 tonnes from 10,308 tonnes prior
(US) Weekly API Oil Inventories: Crude: -4.2M v +0.9M prior; (largest draw since Jan 18th 2017)
(RU) Russia govt reportedly favors extension of OPEC deal by six months – press
USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.8892 V 6.8956 PRIOR
(CN) PBOC to inject combined CNY200B v skipped prior in 7-day, 14-day and 28-day reverse repos
(CN) China MOF sells 1-yr bonds at 3.32% v 3.18%e, bid-to-cover 1.47x; Sells 10-yr bonds at 3.52% v 3.49%e, bid-to-cover 2.20x
(AU) Australia MoF (AOFM) sells A$600M in 2.75% 2028 Bonds; avg yield: 2.7213%; bid-to-cover: 4.69x
Asia equities notable movers
NZME, NZM.NZ,-11.2%; NZCC denies merger with Fairfax
Vocus Communications, VOC.AU, -27%, cuts FY17 guidance
Nufarm NUF.AU -1.5%, guidance
Star Entertainment SGR.AU 4.0%, trading update
Woolworths WOW.au -2.0%, Macquarie cut
Melbourne IT, MLB.AU, +7.8%, resumes trading, entitlement offering
Epistar, 2448.TW, +3.3%, San Shing Fastech may make an offer
MediaTek, 2454.TW, -1.8%, may have negative outlook
