General Trend:
- Telecom Services, Financial and Consumer Discretionary firms weigh on Shanghai Composite in early trading
- ZTE pares some of Friday’s gain
- Disappointing debut for Uber’s shares weighs on Softbank
- Commonwealth Bank of Australia declines on lower quarterly profits
- Australian plumbing supplies company Reliance Worldwide declines over 15% on reduction in outlook
- China continues to refrain from announcing trade countermeasures on the US
- There has been renewed speculation that Trump and China’s Xi could meet around the June 28-29th G20 meetings in Japan
- PBOC official said decline in overnight rates is ‘normal’
- China smartphone shipments rise in April (first rise of 2019)
- South Korea’s exports continue to decline into early May, chip exports decline again; Korean Won (KRW) declines over 0.8%
- Asian currencies trade generally weaker on trade uncertainty, track decline in yuan
- Australian poll tightens ahead of May 18th (Saturday) elections
- Saudi and Iranian officials comment on Sunday’s explosions at the UAE Fujiariah port (near Strait of Hormuz), cause of explosions still unknown
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -0.2%
- (AU) AUSTRALIA MAR HOME LOANS M/M: -2.8% V -0.5%E; Investment Lending m/m: -2.7% v -1.5%e ; Owner Occupied Loan Value m/m: -3.4% v -0.5%e
- CBA.AU Reports Q3 (A$) Cash profit 1.70B* v 2.35B y/y
- LLC.AU Confirms have not received any approach
- RWC.AU Cuts FY19 EBITDA guidance to A$260-270M (guided A$280-290M prior)
- Looking ahead: New Zealand Fin Min Robertson will make a pre-budget speech ahead of May 30th budget release
Japan
- Nikkei 225 opened -0.8%
- (JP) According to analysts 849 earnings from Japan companies show avg Net profit -2% y/y, noting slowdown in demand and US/China trade war – Nikkei
- (JP) US sought a quick agreement with Japan on bilateral trade deal today in a phone call between Trade Rep Lighthizer and Japan’s Motegi – Nikkei (Friday)
- Toshiba, 6502.JP Reports FY18/19 Net ¥1.0T v ¥0.8T y/y; Op ¥35.5B v ¥86.2B y/y; Rev ¥3.69T v ¥3.95T y/y
- (JP) Japan Mar Preliminary Leading Index CI: 96.3 v 96.3e; Coincident Index: 99.6 v 99.6e
Korea
- Kospi opened -0.8%
- (KR) South Korea Apr Foreign Investment in local bonds (KRW): +0.53T v +1.47T prior; Foreign investment in local stock: 2.6T v -0.6T prior
- (KR) South Korea’s military has not yet determined the details of the short-range missiles that North Korea fired last week – Yonhap
- (KR) South Korea sells KRW1.7T v 1.7T indicated in 5-yr bonds, avg yield 1.76% v 1.86% prior; bid to cover 2.98x
China/Hong Kong
- Hang Seng closed for holiday; Shanghai Composite opened -1.2%
- (US) White House Economic adviser Kudlow: China has invited Trade Rep Lighthizer and Treasury Sec Mnuchin to China to continue trade talks; Noted that Americans, not the Chinese, pay the tariffs (opposite of what Trump says); China will sugger GDP loss as a result
- (CN) US President Trump tweets on China: “…deal will become far worse for them if it has to be negotiated in my second term”; We are right where we want to be with China, remember they broke the deal not us
- (CN) China allows trading of two matured defaulted corporate bonds for the first time on state-owned platforms – Chinese Press
- (CN) According to Citi analysts US trade tariffs on China will take away 0.8% of China GDP on an annual basis if sustained and -0.3% from South Korea GDP
- 002450.CN China police have taken criminal compulsory measures against major shareholder for suspected crime
- (CN) China PBoC sets yuan reference rate: 6.7954 v 6.7912 prior (weakest fix since Jan)
- (CN) China PBoC Open Market Operation (OMO): Skips for 3rd consecutive session: Net injection: CNY20B drain v CNY0B prior
- (CN) China April smartphone shipments ~34.8M units, +6.5% y/y (first rise in 2019) vs -4.1% prior – China Academy of Information and Communications (CAICT)
Other Asia
- Looking ahead: Philippines mid-term election results expected tomorrow, newly elected officials to take office June 30th, results expected to strengthen President Duterte’s power
North America
- (RU) US Sec of State Pompeo cancels part of trip that will take him to Moscow, but will meet with Lavrov and Putin in Sochi as planned Tuesday
Europe
- (UK) PM May may be asked to step down this week as her talks with Labour Leader Corbyn continue – UK press
- (UK) UK Labour Trade Policy chief Gardiner: We do not know whether successor to PM May will deliver on any Brexit deal negotiated with Govt, that is the biggest sticking point – UK press
- VOD.UK Expected to cut its dividend ~50% to £0.075 from £0.15 in order to finance 5G – UK press (will report on Tuesday)
- (ZA) South Africa election results: Ruling ANC Party wins with 57% of vote (down from 62% in 2014), vows to purge the party of “deviant tendencies”
- (AT) ECB’s Nowotny (Austria): ECB did not mean to tell markets easy policy will be prolonged , when Draghi said it would consider steps to mitigate impact of negative rates on banks; Next policy steps will depend on data, premature to talk about what to do if growth slows further – Nikkei (update)
- (AE) Several powerful explosions reported early Sunday morning at United Arab Emirates port of Fujairah, targeting 7 tankers; have not said what caused the fire; called it sabotage; Saudi Energy Min addresses the explosions
- Saudi Energy Min condemns attack on 2 Saudi vessels that targeted security of oil supply; attack caused significant damage to the structure of the 2 Saudi vessels; one of the ships was bound for Aramco customers in US – Saudi State media
Levels as of 01:20ET
- Hang Seng closed; Shanghai Composite -1.0%; Kospi -1.1%; Nikkei225 -0.8%; ASX 200 -0.4%
- Equity Futures: S&P500 -1.0%; Nasdaq100 -1.2%, Dax -0.9%; FTSE100 -0.9%
- EUR 1.1227-1.1245; JPY 109.60-109.86; AUD 0.6974-0.7005; NZD 0.6577-0.6605
- Commodity Futures: Gold -0.2% at $1,284/oz; Crude Oil -0.0% at $61.65/brl; Copper -1.2% at $2.75/lb
