Asia Mid-Session Market Update: RBA minutes concerned with rising unemployment and overheating housing market; Risk sentiment briefly dented by reports of Trump intelligence gaffe with Russian diplomats
US Session Highlights
(US) MAY EMPIRE MANUFACTURING: -1.0 V +7.3E; new orders -4.4 v +7 m/m
(US) MAY NAHB HOUSING MARKET INDEX: 70 V 68E (second-highest reading since financial downturn)
Stocks opened the week upbeat on higher commodity and oil prices, with the S&P touching a new all-time high, before closing lower, but up on the day. Indices were led by mining and energy stocks. The two outperforming sectors of the S&P were Energy and Materials, gaining 0.8% and 0.9% respectively.
US markets on close: Dow +0.4%, S&P500 +0.5%, Nasdaq +0.5%
Best Sector in S&P500: Materials
Worst Sector in S&P500: Telecom
Biggest gainers: FTR +6.6%; QRVO +5.5%; NVDA +5.0%
Biggest losers: SWN -4.3%; URBN -3.1%; VIAB -2.5%
At the close: VIX 10.4 (flat); Treasuries: 2-yr 1.30% (flat), 10-yr 2.34% (flat), 30-yr 3.01% (+1bps)
US movers afterhours
AKBA Akebia and Vifor Pharma announce license agreement to provide Vadadustat to Fresenius Medical Care in the U.S. Upon FDA Approval; Vifor makes $50M investment in AKBA at $14/shr ; +16.2% afterhours
VOXX Reports Q4 $0.00 v $0.06e, R$167.4M v $167.7M y/y -9.8% afterhours
TEAR Reports Q1 -$0.82 v -$0.75e, R$6.7M v $7.0Me; -15.0% afterhours
Key economic data
(AU) AUSTRALIA APR NEW MOTOR VEHICLE SALES M/M: 0.3% V 1.9% PRIOR; Y/Y: 0.1% V -3.0% PRIOR
Asia Session Notable Observations, Speakers and Press
Asian equities mixed despite the more pronounced gains on Wall St as political risk in the shape of a Trump intelligence gaffe during his meeting with Russian diplomats last week sparked calls for Congressional inquiry. JPY traded slightly firmer and US equity futures slightly softer in early Asian hours. Australia miners and AUD faring better as precipitous decline in iron ore appears to have abated in spite of more disappointing economic data out of China this weekend. Economic calendar and FX volatility otherwise compressed. RBA policy meeting minutes produced a very minor upside ripple, reiterating concern over inflation but also inserting property price sensitivity and risk into its analysis.
Politics
(RU) Pres Trump reportedly revealed highly classified intelligence information on ISIS threat to Russian Foreign Min last week that intelligence agency partners had not given permission to share – press
China
(CN) China MoF 5-yr bond suspended from trading after abnormal fluctuations
(CN) Fitch: China economy to remain stable this year – press
Australia/New Zealand
(AU) Reserve Bank of Australia (RBA) May 2nd Meeting Minutes:
Maintaining the current accommodative stance of monetary policy would be consistent with achieving sustainable growth and the inflation target over time
Developments in the labor and housing markets warrant careful monitoring. Recently announced supervisory measures designed to help mitigate household credit risks, and recent mortgage rate increases, will take some time to fully assess their impact.
(AU) Australia Trade Min Ciobo: FTA talks with Hong Kong may boost service exports
Q1 inflation data had generally increased confidence that underlying inflation would pick up to around 2% by early 2018.
Asian Equity Indices/Futures (00:00ET)
Nikkei +0.2%, Hang Seng -0.3%, Shanghai Composite -0.3%, ASX200 +0.1%, Kospi +0.1%
Equity Futures: S&P500 -0.1%; Nasdaq flat, Dax -0.1%, FTSE100 -0.2%
FX ranges/Commodities/Fixed Income (00:00ET)
EUR 1.0975-1.0990 JPY 113.40-113.80; AUD 0.7405-0.7430; NZD 0.6875-0.6905
June Gold +0.4% at 1,234/oz; June Crude Oil +0.4% at $49.06/brl; July Copper -0.4% at $2.53/lb
(US) EIA forecasts June total shale regions oil production at 5.40M bpd, +122K bbd m/m (vs +109K bpd rise in May)
iShares Silver Trust ETF daily holdings rise to 10,605 tonnes from 10,532 tonnes prior (2nd straight increase)
(CN) PBOC to inject combined CNY190B v CNY80B prior in 7-day and 14-day reverse repos
(CN) PBOC SETS YUAN MID POINT AT 6.8790 V 6.8852 PRIOR (4th consecutive firmer setting, strongest Yuan fix since Apr 24th)
(JP) Japan MoF sells ¥1.99T in 0.1% 5-year JGB bonds; avg yield -0.117% v -0.160% prior; bid-to-cover 3.59x v 3.28x prior
Asia equities notable movers
Australia
Fortescue (FMG) +2.5%, Rio Tinto 0.8%; Iron ore rebounds
BHP +0.4%; Elliott Mgt makes new case for review of petroleum business
Japan
Sharp (6502.JP) -7.6%; Sharp may acquire 10-20% of Toshiba’s memory unit in a joint bid with Hon Hai – Nikkei
Mizuho (8411.JP) -1.8%; Reports FY17/17
Hong Kong
China Shenhua Energy (1088) +1.1%; Apr coal output
Phoenix TV (2008) -1.6%; Q1 result
Paradise Ent (1180) -2.4%; Q1 result
Cathay Pacific (293) -3.0%; Removed from MSCI HK
