Trade Uncertainty Remains A Factor For Markets

May 09 19, 05:54 GMT

General Trend:

Chinese markets drop in early trading, financials decline amid weaker bank lending data; Shanghai Property index drops over 2%
Trade-sensitive Marine Transportation index drops over 3% in Japan; Honda lower after results and guidance, while financials also decline
Yahoo Japan rises over 8% on transaction with Softbank Corp
Takeda to sell eye-care related assets to Novartis, to receive upfront payment of $3.4B
Australia’s Qantas Airways rises after reporting sales growth in Q3
China Vice Premier Liu He is expected to visit the US May 9-10th (Thursday-Friday)
US govt issued formal notice that 25% tariffs on $200B worth of Chinese goods will take effect Friday (May 10th)
China Commerce Ministry indicated it may take countermeasures against new US tariffs (press)
China April CPI data was inline; pork prices +14% y/y
Philippines Q1 GDP misses ests, some expect Philippines central bank to cut rates later today
Japanese companies expected to report earnings after the Nikkei close include Softbank Group and Panasonic
Reserve Bank of Australia is expected to issue its Quarterly Statement on Monetary Policy (SOMP) on Friday (May 10th)
Earlier this week, the RBA issued updated GDP and inflation forecasts ahead of the SOMP release

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened flat
(NZ) New Zealand Central Bank (RBNZ) Gov Orr: it’s too early to tell if another rate cut is needed, was ahead of the curve – radio interview
(NZ) Reserve Bank of New Zealand (RBNZ) Gov Orr: Assume export prices will hod up; if had not cut rate, employment would have slowed down – speaking to parliament
GNC.AU Reports H1 (A$) Net -59M v 36M y/y; Rev 2.49B v 1.99B y/y
KDR.AU Have been significant talks with Wesfarmers, to complete due diligence by May 29th
TPG.AU Australia competition regulator (ACCC) said to note it would oppose deal with Vodafone Australia

Japan

Nikkei 225 opened -0.5%
4502.JP Novartis to acquire Xiidra®, expanding front-of-eye portfolio and strengthening leadership in eye care for $3.4B upfront with potential for milestones of up to $1.9B
7267.JP Reports FY18/19 Net ¥610.3B v ¥1.06T y/y; Op ¥726.4B v ¥833.6B y/y; Rev ¥15.89T v ¥15.36T y/y; Guides initial FY19/20 Net ¥665B; Op ¥770B; Rev ¥15.7T
(JP) Bank of Japan (BOJ) Gov Kuroda: Japan’s economy is expanding moderately as a trend, risks are on the downside for economy, price momentum is being maintained; do not set limit on how much monetary base can be expanded, not near limit currently. Watching for any impact FX is having on economy, but MoF is responsible for FX policy or intervention – parliament
TM Confirms to create 50/50 JV with Panasonic related to town development

Korea

Kospi opened -0.4%
(KR) North Korea state news: recent rocket drill was routine and self defensive
005930.KR South Korean prosecutors seek arrest of 2 Samsung Electronics directors for allegedly destroying evidence of accounting fraud at Samsung Biologics – Nikkei
(KR) South Korea Mar Money Supply M2 m/m: 6.2% v 0.6% prior; Money Supply L m/m: 6.7% v 0.2% prior

China/Hong Kong

Hang Seng opened -0.6%; Shanghai Composite opened -0.8%
(CN) CHINA APR CPI M/M: +0.1% V -0.1%E; Y/Y: 2.5% V 2.5%E; PPI Y/Y: 0.9% v 0.6%e (matches highest level since Dec 2018); Food price CPI +6.1% y/y; Non-Food CPI +1.7% y/y
(CN) CHINA APR NEW YUAN LOANS (CNY): 1.02T V 1.690T PRIOR; Outstanding Loan Growth y/y: 13.5% v 13.7% prior
(CN) CHINA APR M2 MONEY SUPPLY Y/Y: 8.5% V 8.6% PRIOR; M1 Money Supply Y/Y: 2.9% v 4.6% prior; M0 Money Supply Y/Y: 3.5% v 3.1% prior
(CN) CHINA APR AGGREGATE FINANCING (CNY): 1.36T V 1.65TE
(CN) US Trade official: Higher tariffs on $200B of China goods will apply to products exported from Friday (not goods that are already in transit) – FT
(CN) China execution of targeted RRR cut must be checked for accuracy – Chinese Press
(CN) US President Trump: China “broke the deal” in trade talks; confirms China Vice Premier is coming to US for trade talks – speaking from rally
(CN) US govt issues formal notice that 25% tariffs on $200B worth of Chinese goods will take effect Friday
(CN) China Commerce Ministry indicates it may take countermeasures against new US tariffs – press
(CN) China PBoC Open Market Operation (OMO): Skips Reverse Repo operations v injects CNY10B prior; Net injects CNY0B v CNY10B prior
(CN) China PBoC sets yuan reference rate: 6.7665 v 6.7596 prior

North America

(US) Certain auto executives believe President Trump may delay decision on auto tariffs by an additional 180 days; the decision could be delayed as talks continue with the EU and Japan – financial press
(BR) BRAZIL CENTRAL BANK (BCB) LEAVES SELIC TARGET RATE UNCHANGED AT 6.50%; AS EXPECTED
FOXA Reports Q3 $0.76 v $0.74 y/y, Rev $2.75B v $2.67Be (first report as a standalone co.)
INTC Guides 3-yr Rev growth in low-single digits to ~$76-78B – investor day
Europe
(UK) Cabinet Office Minister Lidington (de facto Dep PM): Brexit talks with Labour has been difficult
(UK) Govt spokesperson: PM May will stay on until Brexit delivered; to see out 1st phase of Brexit

Levels as of 1:20 ET

Nikkei 225, -0.9%, ASX 200 +0.4%, Hang Seng -1.5%; Shanghai Composite -0.5%; Kospi -1.8%
Equity Futures: S&P500 -0.5%; Nasdaq100 %, Dax -0.3%; FTSE100 -0.2%
EUR 1.1202-1.1185 ; JPY 110.13-109.83 ; AUD 0.6997-0.6967 ;NZD 0.6589-0.6569
Gold +0.1% at $1,282/oz; Crude Oil -0.8% at $61.64/brl; Copper -0.3% at $2.762/lb