General Trend:
- Property sectors in China and Hong Kong decline amid rise in short-term rates, analysts debate rate outlook China
- Australia’s Bank of Queensland declines over 5% after weaker than expected earnings, cut dividend
- Big banks in Japan trade generally lower amid press coverage on CLO exposures, Wednesday’s decline in US Treasury yields
- US Treasury Sec: We have agreed [with China] on enforcement mechanism and to establish enforcement offices; not going to comment on tariffs
- China March CPI in line with expectations despite higher food prices and impact of African swine fever, remains below target
- China government bond futures rise amid in line inflation data, equity declines
- China deflation risk subsides after acceleration in March PPI (US financial press)
- PBoC changes language regarding money market liquidity levels amid expectations OMOs may be resumed ‘soon’
- China money market rates continue to rise amid the skipped OMOs
- Australia PM Morrison sets election date of May 18th, currently he lags in the polls
- South Korea April 1-10th exports rebound on shipments of petroleum products and vessels
- Currencies and autos may be sticking points in the upcoming US/Japan trade talks (Japanese Press)
- Fast Retailing expected to report earnings after today’s Nikkei close Apple supplier
- Largan Precision also expected to issue earnings today
- RBA expected to issue its Financial Stability Review on Friday, prior review did not directly address monetary policy
- Singapore due to issue the semi-annual monetary policy statement, advance Q1 GDP on Friday; expected by most analysts to leave policy unchanged (would follow 2 consecutive tightening moves)
- China March trade figures are expected April 11-12th
- South Korea President Moon and US President Trump expected to hold Washington D.C. summit later today
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened slightly lower
- (AU) Australia PM Morrison confirms elections to be held May 18th
- WHC.AU Reports Q3 managed ROM coal production 4.9Mt v 5.9Mt y/y; salable coal production 5.1Mt v 5.2Mt y/y; Cuts FY19 saleable coal 20.5-21.0Mt (prior 21.5-22.5Mt)
- BOQ.AU Reports H1 (A$) Net Cash profit 167M v 168Me ; Rev 544M, -2% y/y
Japan
- Nikkei 225 opened -0.1%
- (JP) Japan govt reportedly to reject any auto quotas or FX provisions requests as part of trade talks with the US – Nikkei
- (JP) Japan Investors Weekly Net Buying of Foreign Bonds: -¥1.75T v +¥1.24T prior; Foreign Buying of Japan Stocks: ¥1.46T v ¥438.5B prior
- (JP) Japan PM Abe: To cooperate with BOJ Gov Kuroda and take appropriate steps as needed with respect to Brexit
- (JP) Banks in Japan have increased exposures to illiquid securitized loans (primarily in the US) – financial press
Korea
- Kospi opened +0.2%
- (KR) North Korea Leader Un: Need to deliver “serious blow” to those that are imposing sanctions; calls for national self-reliance, increased economic development – Yonhap
- (KR) South Korea Apr 1-10th Exports +8.9% y/y; Chip exports -19.7%
- (KR) South Korea Feb bank loans overdue at least 1-month at 0.52%, + 7bps m/m (fastest increase in 5 years); notes rise in delinquent loans to small companies – Local press
- (KR) South Korea Q1 Foreign Direct Investment (FDI): $3.2B, -35.7% y/y; actual investment made by foreign companies $2.6B, -15.9% y/y
China/Hong Kong
- Hang Seng opened +0.1%; Shanghai Composite opened flat
- (CN) CHINA MAR CPI Y/Y: 2.3% V 2.3%E (fastest CPI pace since Oct 2018); PPI Y/Y: 0.4% V 0.4%E
- (CN) China Academy of Social Sciences (CASS): Basic pension fund may run out by 2035 as aging population grows
- (US) Treasury Sec Mnuchin: Both US and China are working hard to reach trade agreement; we have more calls scheduled this week ; We have agreed on enforcement mechanism and to establish enforcement offices; not going to comment on tariffs – CNBC interview
- (CN) China PBoC Open Market Operation (OMO): Skips for 16th consecutive session: Net: CNY0 v CNY0 prior
- (CN) China PBoC sets yuan reference rate: 6.7088 v 6.7110 prior
- (CN) China State Administration of Press, Publication, Radio, Film and Television approves 40 domestic games
North America
- DAL Reports Q1 $0.96 v $0.87e, Rev $10.5B v $10.4Be
- BBBY Reports Q4 $1.20 v $1.11e, Rev $3.31B v $3.33Be; Raises Quarterly dividend 6.3% to $0.17 from $0.16 (indicated yield 3.5%), updates Board refreshment; Guides Q1 $0.07-0.12 v $0.31e, Rev $2.6B v $2.70Be – earnings slides
- (US) FOMC MINUTES FROM MARCH 20TH MEETING: MOST OFFICIALS SAW NO CHANGE IN INTEREST RATES THIS YEAR; MAJORITY SAID PATIENT APPROACH ON RATES IS NEEDED GIVEN UNCERTAINTIES
- (US) Former Fed Chair Yellen: Do not see a need for Fed to cut rates currently, monetary policy is well positioned at this point, its appropriate for Fed to be watchfully waiting on policy
Europe
- (UK) EU’s Tusk confirms EU and UK have agreed to Brexit extension to Oct 31 (additional 6-months)
- (UK) PM May: EU agrees extension can end when deal is ratified; Uk to keep full membership rights during extension
- (UK) Prime Min May reportedly would seek to stay on as PM if Brexit deal is not passed by end of June – UK’s Guardian
- (EU) ECB’s Draghi: Too early to provide TLTRO and any possible Tiering details; need consensus for further analysis of economic outlook – Q&A
Levels as of 1:20 ET
- Nikkei 225, flat, ASX 200 -0.3%, Hang Seng -0.7%; Shanghai Composite -1.1%; Kospi flat
- Equity Futures: S&P500 flat; Nasdaq100 flat, Dax -0.2%; FTSE100 -0.2%
- EUR 1.1283-1.1272 ; JPY 111.13-110.89 ; AUD 0.7174-0.7152 ;NZD 0.6772-0.6757
- Gold -0.3% at $1,309/oz; Crude Oil -0.4% at $64.36/brl; Copper -0.2% at $2.916/lb
