Aussie Lent Extra Support From Rebound In Retail Sales

General Trend:

• FT: US and China continue to haggle on trade deal enforcement and implementation; have resolved most other issues (in line with prior reports)
• China Daily commentary: Prudence urged amid enthusiasm for the stock market
• Bank of Communications declines, China Social Security Fund plans to cut stake; Shanghai Banking index lags on session
• Japanese outperformers include Marine/Transportation, Securities, Electric Appliance and Machinery companies.
• Fast Retailing rises over 4% after monthly SSS
• Aussie iron ore miners continue to gain as Chinese prices hit record highs
• Australia has record trade surplus in Feb as imports decline
• Bank of Japan (BOJ) leaves daily bond buying amounts unchanged, despite some analysts speculating that it could cut purchases
• Japan expected to sell 30-yr JGBs on Thursday
• China Vice Premier Liu He is expected to resume trade talks with US officials in Washington today (April 3rd)

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened %
• (AU) Australia Govt 2019/20 budget: forecasts budget surplus of A$7.1B in 2019-2020; Cuts FY19/20 GDP growth forecast from 3.00% to 2.75% (after the close yesterday)
• (AU) Australia Feb Final PMI Services: 49.3 v 49.8 prelim; PMI Composite: 49.5 v 50.0 prelim
• (AU) Australia sees 2019/20 gross bond issuance at ~A$58.0B vs ~A$54B for the current year; to add new issuance for June 2031 and May 2032
• (AU) RBC Capital says risks are still skewed toward RBA rate cuts after recent government budget – US financial press
• (AU) Australia Feb Trade Balance (A$): 4.8B v 3.7Be (record); Exports M/M: 0% v +5% prior; Imports M/M: -1% v +3% prior
• (AU) AUSTRALIA FEB RETAIL SALES M/M: 0.8% V 0.3%E (fastest rise since Nov 2017)
• (NZ) New Zealand Fin Min Robertson: Global slowdown is a risk to the economy

Japan

• Nikkei 225 opened +0.3%
• 9983.JP To raise pay for Spring 2020 hires by 20% – Japan press
• 7203.JP Reportedly plans to grant royalty-free access to its hybrid-vehicle technology patents to maintain sector’s viability against pure electric vehicles – Nikkei
• (JP) Japan pushing China on protection of intellectual property as part of trade talks that are currently ongoing – Nikkei
• (JP) Japan said to be concerned that US trade talks will focus on car exports – UK Press
• (JP) Japan Mar PMI Services: 52.0 v 52.3 prior; PMI Composite: 50.4 v 50.7 prior
• (JP) BoJ Dep Gov Wakatabe: inflation has been subdued globally

Korea

• Kospi opened flat
• (KR) South Korea Mar Foreign Reserves: $405.3B v $404.7B prior
• (KR) South Korea Finance Min Hong: Extra budget unlikely to reach KRW9.0T – Local press
• (KR) Bank of Korea (BOK) sells KRW3.0T in 2-yr Monetary Stabilization Bonds (MSB); avg yield 1.74% v 1.85% prior

China/Hong Kong

• Hang Seng opened +0.5%; Shanghai Composite opened -0.6%
• (CN) CHINA MAR CAIXIN PMI SERVICES: 54.4 V 52.3E (highest since Jan 2018); PMI COMPOSITE: 52.9 V 50.7 PRIOR
• (CN) China Daily commentary: Prudence urged amid enthusiasm for the stock market; some of the optimism related to the equity markets is linked to the new technology board in China which is expected to be launched in June at the earliest
• 600104.CN Reports FY18 (CNY) Net 36.0B v 36.5Be, Rev 902.2B v 922.7Be; total auto sales 7.05M, +1.7% y/y v 7.26M guided
• (CN) China expected to limit crude steel production capacity in Hebei and Tianjin – China Daily
• (CN) US State Dept Spokesperson: Will not send high-level officials to China Silk-Road summit in April
• (US) US and China continue to haggle on trade deal enforcement and implementation; have resolved most other issues – FT
• (CN) China PBoC Open Market Operation (OMO): Skips for 11th consecutive session: Net: CNY0 v CNY0 prior
• (CN) China PBoC sets yuan reference rate: 6.7194 v 6.7161 prior
• (CN) Former PBoC Official: More reserve ratio rate (RRR) cuts create risk for asset bubbles
• (CN) Fitch comments on banks in China: Has negative outlook for the sector, expects net profit growth to be in the single digits in the medium term
• (CN) Woman with China passports arrested at Trump’s Mar-a-Lago resort; the individual was said to have had malware – US Press
• (CN) China Ministry of Foreign Affairs Official Wang: Premier Li to visit Europe April 8-12th (Monday-Friday)

Other Asia

• Asia Development Bank (ADB): Developing Asia growth to soften, inflation to remain subdued; primary risk US/China trade dispute; Sees developing Asia 2019 GDP at 5.7% (prior 5.8%); 2020 at 5.6%

North America

• (US) Pres Trump reportedly told Fed Chair Powell ‘I guess I’m stuck with you’ – press
• (MX) Mexico Foreign Min Ebrard: US govt has told Mexico that it is so far not going to shut the border
• (US) Fed Nominee Moore: Believe in a stable dollar
• Faulty Boeing 737 Max sensor found in Lion Air crash was traced back to a US repair shop – financial press
• (US) President Trump: Canada knocks the hell out of US on trade, not happy

Europe

• (UK) Mar BRC Shop Price Index Y/Y: 0.9% v 0.7% prior (highest level since Mar 2013)
• (UK) Northern Ireland’s DUP statement: PM May’s handling of the Brexit negotiations have been lamentable; we remain consistent in judging all Brexit outcomes against our clear unionist principles
• (UK) EU said to be preparing to offer a long delay on Brexit to January or April of 2020 with strict conditions – FT

Levels as of 1:20 ET

• Nikkei 225, +0.9%, ASX 200 +0.7%, Hang Seng +1.1%; Shanghai Composite +0.5%; Kospi +0.9%
• Equity Futures: S&P500 +0.4%; Nasdaq100 %, Dax +0.5%; FTSE100 +0.1%
• EUR 1.1227-1.1199 ; JPY 111.53-111.20 ; AUD 0.7105-0.7053 ;NZD 0.6776-0.6743
• Gold +0.1% at $1,296/oz; Crude Oil +0.3% at $62.77/brl; Copper +0.5% at $2.924/lb