Australian Yields Pare Declines As RBA Official Waits For More Data

General Trend:

• Financials, IT, Property and Materials firms are among the decliners in China
• Chinese automakers out perform, March auto sales declined at slower rate
• Large brokerage firms in China generally report m/m increases in March profits amid gains in the Shanghai Composite
• Chinese e-commerce firm JD.com denies report it plans to cut 8% of workforce
• Hong Kong equity market capitalization moves above Japan’s – FT
• Australia’s Crown Ltd declines over 8% after terminating talks with Wynn
• Decliners in Japan include automakers, big banks and Electric Appliances companies
• Japan Display declines over 6%, did not give timeframe for aid agreement
• J Front Retailing rises over 3% in Japan after FY results and guidance
• China Iron Ore prices decline for first time in 8 sessions
• Short-term rates rise in China and Hong Kong as PBoC skipped OMO for 15th straight session
• China 10 year bond yields continue to rise as analysts debate rate outlook
• China sells 2 and 5-year bonds at higher than expected yields
• IMF raised China 2019 growth forecast, cut global growth estimate
• BoJ Gov: Recent negative bond yields not a problem for YCC
• Japan Fin Min and BoJ Gov comment on wages after Feb real cash earnings expectedly declined
• South Korea Fin Min: Semiconductor exports worse than govt forecast, extra budget unlikely to exceed KRW7.0T (vs prior speculation of lower than KRW9.0T)
• Taiwan Semi expected to report March sales later today
• ECB rate decision expected later today
• US Fed due to release March policy meeting minutes on Wed
• China March CPI data due on Thursday, expected to accelerate amid focus on rising pork prices
• Fast Retailing is due to report results after Nikkei close on Thursday

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened -0.1%
• CWN.AU Confirms Wynn terminated talks
• (AU) Reserve Bank of Australia (RBA) Assist Gov Debelle: How tensions resolve in the coming months will be important for path of rates; see tension between strength in jobs and weakness in output data; tensions is critical to RBA outlook
• (AU) Australia Apr Westpac Consumer Conference 100.7 v 98.8 prior; M/M: +1.9% v -4.8% prior
• (AU) Australia sells A$900M v A$900M indicated in 2.75% Nov 2029 bonds, avg yield 1.8864% v 1.8158% prior, bid to cover 2.91x v 2.81x prior
• BEN.AU IOOF to acquire financial planning book for A$3.0M cash and additional payment after 1-yr

Japan

• Nikkei 225 opened -1.0%
• (JP) Bank of Japan (BOJ) Gov Kuroda: 2% inflation target helps long run currency stability; seeking to create condition in which inflation rises in line with rises in corporate profits and wages; inflation like to remain around 1% as wages aren’t rising – speaking in parliament
• (JP) JAPAN FEB CORE MACHINE ORDERS M/M: +1.8% V 2.8%E; Y/Y: -5.5% V -4.6%E
• (JP) JAPAN MAR PPI M/M: 0.3% V 0.2%E; Y/Y: 1.3% V 1.1%E
• 6178.JP Japan Govt to cut stake to the legal minimum of just over 33% later this year, to complete the privatization process – financial press
• (JP) Japan Ministry of Defense reports a Lockheed Martin F-35A stealth fighter jet has disappeared from radar over the eastern Pacific Ocean – Nikkei
• (JP) Japan Jan Bank Lending Ex-Trusts Y/Y: 2.5% v 2.4% prior; Bank Lending Including Trusts Y/Y: 2.4% v 2.3% prior
• (JP) Japan Fin Min Aso: Will not do much good if inflation alone rises, capex and wages must also rise
• (JP) Japan Fair Trade Commission raids offices of Expedia, Rakuten and Booking.com Japan to investigate alleged anti-monopoly law violations – Nikkei

Korea

• Kospi opened -0.3%
• (KR) North Korea confirms to convene plenary session of ruling party central committee Wednesday to discuss the country’s “new orientation” – KCNA
• (KR) South Korea Mar Unemployment Rate: 3.8% v 3.9%e
• (KR) South Korea Fin Min Hong: External conditions are deteriorated; chip sector growth slower than expected; semiconductor exports worse than govt expectations; Undecided on size of extra budget, likely to not exceed KRW7.0T (prior thought to be lower than KRW9T)

China/Hong Kong

• Hang Seng opened -0.4%; Shanghai Composite opened -0.5%
• (EU) EU’s Tusk: talks with China have been difficult but fruitful – EU/China summit
• (CN) China CBRC calling for stricter standards for non-performing loans (NPL) – China Securities Journal
• (CN) China PBoC Open Market Operation (OMO): Skips for 15th consecutive session: Net: CNY0 v CNY0 prior
• (CN) China PBoC sets yuan reference rate: 6.7110 v 6.7142 prior
• (CN) China Mar retail passenger vehicle sales at 1.78M units, -12% y/y v -18.5% prior (10th straight month of decline)
• (CN) China March Smartphone shipments y/y: -4.1% v -19.9% prior – China Academy of Information and Communications Technology (CAICT)

North America

• (US) Fed’s Clarida (moderate, voter): Jobless rate may have room to fall without inflation, given uncertainty around estimates of full employment; economy is at or near employment goals
• (US) Trump administration reportedly readying new edict on cross-border pipelines, such as Keystone XL – press
• (US) Weekly API Oil Inventories: Crude: +4.1M v +3M prior
• (US) Fed’s Quarles (hawk, voter): White House comments do not factor in Fed decisions, remain data driven and very disciplined; Recent dissents in Fed votes are healthy
• UBER.IPO Said to plan to sell ~$10B worth of stock in IPO, ready to file as soon as Thursday – financial press

Europe

• (UK) Parliament approves PM May’s plan to ask for a Brexit extension to June 30th
• (UK) EU officials said to consider offering UK extension of Brexit deadline to March 30, 2020 with final date to be confirmed – press
• (UK) Chancellor of the Exchequer Hammond (Fin Min): MPs could remove article 50 to prevent no deal sinking value of pound
• (IL) Israel’s Netanyahu said to have won the election after 96% of the votes were counted (Channel 12)

Levels as of 1:20 ET

• Nikkei 225, -0.6%, ASX 200 +0.1%, Hang Seng -0.2%; Shanghai Composite -0.1%; Kospi +0.2%
• Equity Futures: S&P500 +0.1%; Nasdaq100 +0.1%, Dax +0.3%; FTSE100 flat
• EUR 1.1272-1.1255 ; JPY 111.23-111.05 ; AUD 0.7142-0.7106 ;NZD 0.6755-0.6741
• Gold -0.1% at $1,306/oz; Crude Oil +0.2% at $64.09/brl; Copper flat at $2.934/lb