Government Bond Futures Decline Led By China

Apr 15 19, 06:50 GMT

General Trend:

Financials lead early gains in Shanghai on better March bank lending data
Chinese brokerage firm GF Securities rises over 5% in HK on guidance
Shandong Chenming Paper drops over 6%, warned on Q1 profits amid lower prices
Nikkei-weighted Softbank rises over 4%, continues to gain after Uber’s IPO filing
Japan Display gains after agreeing to financial aid package from China/Taiwan investor group
Japanese and Australian financials trade generally higher after US bank earnings, rise in bonds yields
Australian equities lag on declines in Resource, Utility and Consumer Discretionary companies
Commodities currencies outperform on better than expected China March banking lending and trade balance data
The analyst debate on China’s monetary policy outlook has continued ahead of Wednesday’s Q1 China GDP release; China 10-yr bond futures hit Nov 2018 lows
US may deemphasize the issue of Chinese state industrial subsidies in current trade talks amid lack of an agreement (financial press)
US/Japan due to hold first round of trade talks on April 15-16th (Mon-Tues) in Washington D.C
Reserve Bank of Australia (RBA) to release April policy meeting minutes on Tuesday (April 16th)
Shanghai Auto Show is due to be held between April 18-25th
The 125th China Import and Export Fair (Canton Fair) is due to open today (largest trade fair in China), first phase expected to be held April 15-19th

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.1%
(NZ) New Zealand Mar Performance of Services Index: 52.9 v 53.8 prior
RIO.AU Approves additional $302M investment in Resolution copper project in Arizona; Has the potential to supply ~25% of US copper demand

Japan

Nikkei 225 opened +1.2%
7269.JP To book ¥80B loss in FY18/19 due to recall of 2.0M cars in Japan – Nikkei
6752.JP Responds to Tesla CEO Musk comment that Panasonic is holding up production: Gigafactory is not running at full 35GWh capacity
(JP) OECD: May be premature for Bank of Japan (BOJ) to focus on details of exit strategy; Govt measures will offset blow from 2019 sales tax hike and will have limited effect on demand
(JP) Japan saw net immigration rise for a sixth straight year to a record high in the year through Oct 1st – Nikkei

Korea

Kospi opened +0.4%
(KR) Pres Trump: still have an “excellent” relationship with North Korea’s Kim Jong Un, a third Summit would be good
(KR) South Korea may not be excluded from US FX watch list in H1 -Korean press
005490.KR Will reorganize liquefied natural gas (LNG) operations as part of efforts to enhance business efficiency – Yonhap

China/Hong Kong

Hang Seng opened +0.7%; Shanghai Composite opened +1.4%
(CN) China PBoC Open Market Operation (OMO): Skips for 18th straight session: Net: CNY0 v CNY0 prior
(CN) China PBoC sets yuan reference rate: 6.7112 v 6.7220 prior
(US) Treasury Sec Mnuchin: US/China trade talks close to final round – US financial press
(CN) US said to compromise on China state industrial subsidies to reach trade deal – Financial Press
(CN) CHINA MAR AGGREGATE FINANCING (CNY): 2.86T V 1.85TE (Friday after the close)
(CN) CHINA MAR NEW YUAN LOANS (CNY): 1.69T V 1.225TE (strongest since Feb 2017) (Friday after the close)
(CN) CHINA MAR M2 MONEY SUPPLY Y/Y: 8.6% V 8.2%E (Friday after the close)
(CN) China companies raising funds from new share issuance and IPOs rose in Q1 for the 1st time in 5 quarters; Q1 82 equity financing transactions totaling CNY74.7B, +80% q/q – Press

North America

(US) President Trump: If the Fed had done its job properly, which it has not, the Stock Market would have been up 5000 to 10,000 additional points, and GDP would have been well over 4% instead of 3%…with almost no inflation. Quantitative tightening was a killer, should have done the exact opposite! – tweet
ADS Enters agreement to sell Epsilon to Publicis for $4.4B (€3.9B) cash
ADSW Expected to announce deal to be acquired by Waste Management for ~$2.9B including $5.0B in debt – financial press

Europe

PUB.FR Reports Q1 Rev €2.1B v €2.1Be; organic sales -1.6%
(UK) Apr Rightmove House Prices M/M: 1.1% v 0.4% prior; y/y: -0.1% v -0.8% prior
(UK) Dep PM Lidington: Would like Govt and Labour to agree on binding mechanism for way ahead; customs union compromises still possible; Govt remains against second referendum – press
(EU) ECB’s Draghi: Worried about central bank independence in other countries, especially in US; does not think cases of interference are undermining global confidence
(UK) Analysts concerned if UK Labour Party’s Corbyn becomes Prime Minister, will restrict arms sales
(IR) Iran protested by taking to the streets burning US flags for US decision naming the Islamic Revolutionary Guard a terrorist organization – financial press

Levels as of 01:20ET

Hang Seng +0.6%; Shanghai Composite +1.2%; Kospi +0.4%; Nikkei225 +1.4%; ASX 200 -0.0%
Equity Futures: S&P500 -0.0%; Nasdaq100 -0.1%, Dax +0.1%; FTSE100 -0.1%
EUR 1.1300-1.1315; JPY 111.92-112.10; AUD 0.7164-0.7181; NZD 0.6762-0.6783
Commodity Futures: Gold -0.3% at $1,291/oz; Crude Oil -0.5% at $63.57/brl; Copper -0.2% at $2.94/lb