Asia Market Update: China property index continues to under perform amid higher rates, gov’t comments; Oil prices rise on supply concerns: Japan’s Golden Week holiday on the radar, Aussie CPI expected on Wed
General Trend:
- Market participation still limited due to holidays
- Various markets are closed on today’s session including HK, Australia, NZ , most of Europe
- Brent Crude rises over 1% as US said to plan to end sanctions waivers related to Iran oil imports
- Canadian dollar tracks rise in oil prices
- Higher oil prices weigh on emerging market currencies (including Philippines Peso and Indian Rupee)
- Chinese financials decline as some see near-term RRR cut as less likely
- Concerns related to competition probe weigh on cement makers in China
- ZTE rises in China after Q1 sales figures from Huawei
- South Korea April 1-20th exports worsen from levels seen earlier in the month; chip exports -24.7% y/y
- China expected to hold its 2nd plenary meeting this week, areas of focus expected to include property rights and the securities law.
- Analysts continue to reassess the likelihood of a Q2 RRR cut in China
- Australia Q1 CPI data is due to release on April 24th (Wed)
- Japan PM Abe reacts to the ruling LDP Party’s by-election losses ahead of upper house elections
- Japan Fin Min Aso is expected to discuss forex issues with US Treasury Sec Mnuchin this week, Aso is expected to travel to the US on April 25th (Thursday)
- Bank of Japan (BOJ) is due to meet April 24-25th
- Japan’s Golden Week holiday is approaching. Japan’s exchanges are due to be closed between April 27 (Saturday) to May 6th (Monday)
- There is some press speculation that the US Treasury Department may release its semi-annual currency report in the near-term
Headlines/Economic Data
Australia/New Zealand
- ASX 200 closed for holiday
- SYD.AU CEO Culbert: Decline in Q1 passengers (first decline in 5-yrs) may be due to changed travel plans because of longer gap between Easter and Lunar New Year – AFR
- (AU) Hail storms in Sydney and flooding in Townsville cost Australia insurers A$2.4B – AFR
Japan
- Nikkei 225 opened -0.1%
- (JP) Japan ruling Liberal Democratic Party (LDP) lost the Lower House by-elections in Okinawa and Osaka – Japanese Press
- (JP) Japan Finance Ministry (MOF) Currency Head Asakawa: Cannot relax during long holiday given FOMC, US jobs data and China PMI data
Korea
- – Kospi opened +0.1%
- 005930.KR Delaying Galaxy fold media event in China, reaffirms plans to launch foldable smartphone in the US on April 26th – Yonhap
- (KR) South Korea President Moon may deliver a message from US President Trump to North Korea leader Kim if a new inter-Korean summit takes place – Yonhap
- (KR South Korea Apr 1-20 Exports y/y: -8.7% v -4.9% prior; Imports y/y: -1.2% v -3.4% prior; Chip exports y/y: -24.7% v -25% prior; Exports to China y/y: -12.1% v -12.6% prior
- (KR) Bank of Korea (BOK) sells KRW840B in 1-yr Monetary Stabilization Bonds (MSB) avg yield 1.80% v 1.82% prior
- (KR) South Korea FTC plans to conduct extensive review of consumer regulations related to game companies – local press
China/Hong Kong
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- Hang Seng opened closed for holiday; Shanghai Composite opened +0.2%
- (CN) China Politburo: Sees downward economic pressure as structural in nature, external economic environment is ‘tightening’; Will stick with principle of houses are for living and not for speculation (released on April 19th)
- (CN) China is considering changes to its Drug Administration Law which may include tighter rules over the production and sale of drugs – Xinhua
- (CN) China State Administration of Press and Publication (SAPP) plans to introduce new approval process for game publishers in April – Chinese press
- (CN) China PBoC Open Market Operation (OMO): Skips v CNY20B injected in 7-day reverse repos prior; Net: CNY0B injection v CNY20B injection prior
- (CN) China PBoC sets yuan reference rate: 6.7035 v 6.7043 prior
- HUAWEI.CN Reports Q1 (CNY) Rev 179.7B, +39% y/y
Other Asia
- (SL) Sri Lanka confirms series of explosions at a church and hotels killing 290, leaving 500 injured; 8 people arrested related to the blasts – press
- North America
- (US) INITIAL JOBLESS CLAIMS: 192K V 205KE (lowest since Dec 1969); CONTINUING CLAIMS: 1.65M V 1.72ME (Friday)
- BA Boeing workers raise concerns about shoddy manufacturing practices at 787 plant in South Carolina – NYT
- (US) US expected to announce end of sanctions waivers for Iran oil imports, announcement may come on Monday – US press
- TSLA Sent team to examine report that a parked car in Shanghai exploded – press
- (US) US financial press: Fed officials start to talk about thresholds for rate cuts, cites recent interviews and public comments by Fed officials
- Europe
- (IR) Iran Supreme Leader Ayatollah Ali Khamenei has named Brigadier General Hossein Salami as the head of the country’s Revolutionary Guards (first change since late 2007) – financial press
- (UR) Comedian Volodymyr Zelenskiy wins Ukraine presidential race with 73% of the vote, beating incumbent Petro Poroshenko (25% of vote) – press
Levels as of 01:20ET
- Hang Seng closed; Shanghai Composite -1.3%; Kospi -0.2%; Nikkei225 +0.5%; ASX 200 closed
- Equity Futures: S&P500 -0.2%; Nasdaq100 -0.2%, Dax closed; FTSE100 closed
- EUR 1.1236-1.1248; JPY 111.86-112.00; AUD 0.7135-0.7155; NZD 0.6673-0.6690
- Commodity Futures: Gold +0.4% at $1,281/oz; Crude Oil +2.4% at $65.59/brl; Copper +0.1% at $2.91/lb
