Asia Mid-Session Market Update: Sluggish China economic data signals possible slowdown; North Korea launches ballistic missile that lands near Russia
Friday US Session Highlights
(US) APR ADVANCE RETAIL SALES M/M: 0.4% V 0.6%E; RETAIL SALES EX AUTO M/M: 0.3% V 0.5%E
(US) APR CPI M/M: 0.2% V 0.2%E; CPI EX FOOD AND ENERGY M/M: 0.1% V 0.2%E; CPI INDEX NSA: 244.524 V 244.610E; core unrounded m/m increase was just 0.07%; ex food and Energy Y/Y: 1.9% v 2.0%e
(CN) China PBoC Q1 Monetary Policy Implementation Report: Reiterates to maintain its prudent but neutral approach
JC Penny and Nordstrom keep pressure on retailers
GE hits 15-month low on downgrade; Tidewater files for Chapter 11
G7 highlights from weekend
G7 discussed cybersecurity including Friday attack
ECB’s Weidmann (Germany): The strengthening economic development in the euro zone and the robust outlook make monetary policy normalization conceivable
German Fin Min Schaeuble: feeling more confident that euro zone members will come up with solution to dispute of reforms and debt by the next Euro Group meeting
US Treasury Sec Mnuchin: Preliminary talks with Mexico and Canada on NAFTA have been productive
Weekend US/EU Corporate Headlines
WHLR Announces Strategic Plan for Two Anchor Tenant Store Closures
ABE.ES Atlantia said to launch takeover bid for Abertis despite not having support from Abertis’ major shareholder Criteria – FT
(DE) Chancellor Merkel’s Christian Democrats (CDU) received 33% support in the North Rhine-Westphalia (NRW) elections
(US) House Speaker Paul Ryan: Conditions in place for tax reform by year-end, BAT seen as unlikely by G7
Key economic data:
(CN) CHINA APR INDUSTRIAL PRODUCTION Y/Y: 6.5% V 7.0%E; YTD Y/Y 6.7% V 6.9%E
(CN) CHINA APR RETAIL SALES Y/Y: 10.7% V 10.8%E; YTD Y/Y: 10.2% V 10.2%E
(CN) CHINA APR FIXED ASSETS EX RURAL YTD Y/Y: 8.9% V 9.1%E
(NZ) NEW ZEALAND MAR PERFORMANCE SERVICES INDEX:52.8 V 58.8 PRIOR
(AU) AUSTRALIA MAR HOME LOANS M/M: -0.5% V 0.0%E
(NZ) NEW ZEALAND Q1 RETAIL SALES (EX-INFLATION): 1.5% V 0.9%E
(JP) JAPAN APR PPI SERVICES (CGPI) M/M: 0.2% V -0.1%E; Y/Y: 2.1% V 1.8%E
(JP) Japan Mar Loans & Discounts Corp y/y: 3.2% v 3.4% prior
Asia Session Notable Observations, Speakers and Press
China
(CN) China President Xi pledges $124B (+$14.5B from prior) for new Silk Road as champion of globalization – (CN) PBOC Gov Zhou: greater use of local currencies under ‘Belt and Road’ initiative will help to reduce costs and increase financial stability
(CN) China President Xi: Belt and Road initiative needs to reject protectionism and avoid fragmentation
(CN) China National Bureau of Stats (NBS): Economic growth is still within a reasonable range
Korea
(KR) North Korea: Says test-fire of new ballistic rocket was “successful”; newly developed rocket is capable of carrying a large-size heavy nuclear warhead
Asian Equity Indices/Futures (00:30ET)
Nikkei -0.1%, Hang Seng +0.6%, Shanghai +0.3%, ASX200 -0.2%, Kospi +0.2%
Equity Futures: S&P500 +0.1%; Nasdaq +0.1%, Dax +0.2, FTSE100 +0.1%
FX ranges/Commodities/Fixed Income (00:30ET)
EUR 1.0935-1.0921; JPY 113.46-113.13; AUD 0.7403-0.73850; NZD 0.6879-0.6853; GBP 1.2903-1.2881
June Gold +0.3% at 1,224/oz; June Crude Oil +0.8% at $48.60/brl; July Copper flat at $2.52/lb
USD/CNY *(CN) PBOC SETS YUAN MID POINT AT 6.8852 V 6.8948 PRIOR (third straight firmer fix for the yuan, strongest fix for yuan since April 26th)
(CN) China PBoC skips reverse repo operations v skipped prior (2nd consecutive skip)
(KR) Bank of Korea sells KRW1.2T in 1-year monetary stabilization bonds at 1.44% v 1.49% prior
(KR) South Korea MoF sells 5-yr bonds at 1.925%
(SA) Saudi Oil Min Al-Falih: Russia and Saudi Arabia said to be in favor of extending OPEC deal for 9-months to March 2018; decision to be made May 25th – financial press
(MY) Malaysia sells MYR3.0B in 2027 bonds; avg yield 3.899%; bid-to-cover ratio 3.34x
Asia equities/Notables/movers
Australia
FXJ.AU Receives increased proposal from TPG worth A$1.20/share in cash, ~26% above prior proposal of A$0.95/share (implied value is A$2.76B, ~12% premium to prior close); +7.5%
FFT.AU Guides FY17 EBITDA loss A$6.0-9.0M; -25%
SGH.AU Received notice requiring production of documents from UK Serious Fraud Office in relation to Watchstone Group +9.5%
Hong Kong
2688.HK, ENN Energy and other sector names weaker on gas sector move, -9.2%
2018.HK Comments on claims by Gotham City Research: Says considers the report’s suggestion "groundless" and "misleading", -5%
Japan
6502.JP Guides FY16/17 Net loss ¥950B v loss ¥483B y/y; Op ¥270B v loss ¥719B y/y; Rev ¥4.87T v ¥5.67T y/y; +3.8%
8604.JP Said to be in talks to sell a stake in real estate unit to Japan Post – financial press ; +0.5%
