Chinese Shares Pare Some Of The Recent Gains

May 17 19, 05:59 GMT

General Trend:

China State Media Commentary: China may have no interest in continuing trade talks with the US for now; sees little “sincerity” in Pres Trump’s approach
USD/CNH trades above 6.94 for the first time since late Nov 2018; yuan weakens amid PBoC fixing and China commentary piece related to US trade talks
Declining sectors in Shanghai include Property, Materials, Energy and Consumer Discretionary
US chip-related earnings in focus: Shares of NVIDIA and Applied Materials rise in after-hours trading following results
Nikkei rises as banks rebound after recent losses, Softbank Group tracks gains in shares of Uber
Sony rises over 10% amid buyback announcement, exploration of partnership with Microsoft
Virgin Australia declines on cautious outlook, notes impact of Easter holiday timing and elections on corporate sector
Australian equities hit highest level since 2007 ahead of the upcoming May 18th (Saturday) elections
Australian energy company Ausdrill canceled planned bond offering, noted escalation of US/China trade war
Key RBA events are seen for next week: On Tuesday (May 21st), the RBA is due to release the minutes for its May policy meeting.
RBA Gov Lowe is also due to speak on May 21st at the Economic Society of Australia Business Lunch
More analysts call for June RBA rate cut after disappointing April unemployment data
China Vice Premier calls for increased pork production in the face of shortages
Meanwhile, China said to have canceled a US pork import order amid trade war escalation

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.2%
(AU) NAB now sees RBA rate cuts in June and Aug 2019 (previously saw rate cuts in July and Nov 2019)
(AU) RBA Watcher Terry McCrann said to have come into line with the view that the RBA will cut rates – US financial press
(NZ) New Zealand Q1 PPI Input q/q: -0.9% v 1.6% prior; PPI Output q/q: -0.5% v 0.7% prior

China/Hong Kong

Shanghai Composite opened flat, Hang Seng +0.5%
(CN) China Vice Premier: urges hog producers to boost production to increase pork supply; calls for increase in poultry production to cover pork shortage; boosting pork production is vital for economic and social stability
(CN) China NDRC: Reiterates trade friction’s impact on the Chinese economy is ‘under control’, domestic CPI and PPI growth to stay stable in future; Pork prices stabilized and declined m/m in April
(US) Reportedly China has canceled a US pork import order – press
(CA) China said to have rejected two Canadian soybean shipments last week amid increase in scrutiny – press
(CN) China NDRC: To cut capital ratio requirement on infrastructure projects
(CN) China PBoC sets yuan reference rate: 6.8859 v 6.8688 prior
(CN) China PBoC Open Market Operation (OMO): Skips for 6th consecutive session: Net: CNY0B v CNY0B prior
(CN) China Finance Ministry sells 30-year bonds: yield 3.9284% v 3.88%e, bid to cover: 1.97x
Huawei: Follow Up: Said to have contingency plan to cut reliance on US chips – Chinese Press

Japan

Nikkei 225 opened +0.9%
(JP) BoJ Gov Kuroda: China economy continues to expand firmly, but weak signs broadening due to trade friction, IT sector adjustment
(JP) Japan PM Abe said to have been warned of credit downgrade risk if sales tax hike is again delayed – US Financial Press
(JP) Japan Fin Min Aso: Reiterates Japan will try to limit impact on economy from tax hike; hard to see impact of US Huawei move on Japan companies but need to brace for some sort of impact
(JP) Japan MOF Asakawa (Japan’s top currency official): Won’t intervene to seek solution to US-China trade frictions at G20; won’t include language in communique saying members will fight protectionism

Korea

Other

(ID) Indonesia Central Bank Gov Warjiyo: Liquidity is heading towards tightness
(SG) SINGAPORE APR NON-OIL DOMESTIC EXPORTS M/M: -0.6% V 5.0%E; Y/Y: -10% V -4.6%E; Exports to Europe -25.4% y/y; China -5.8% y/y

North America

Cray Inc [CRAY]: Reportedly near deal to be acquired by HP Enterprise, announcement could come by as early as this week – US Financial Press

Europe

(TU) White House issues notice on Turkey metal tariffs: Confirms US is terminating Turkey preferential treatment under GSP, effective on Friday (as expected); US to impose 25% ad valorem tariff on Turkey steel imports, down from 50% prior
(DE) Germany Bundesbank VP Buch: Recent weakness in German economy seems only a ‘dip’; More bank consolidation in Europe could provide stability – German press

Levels as of 1:20 ET

Nikkei 225, +1.1%, ASX 200 +0.5%, Hang Seng -1%; Shanghai Composite -1.3%; Kospi -0.1%
Equity Futures: S&P500 -0.3%; Nasdaq100 -0.4%, Dax -0.3%; FTSE100 -0.3%
EUR 1.1181-1.1170 ; JPY 110.03-109.67 ; AUD 0.6898-0.6882 ;NZD 0.6543-0.6527
Gold flat at $1,286/oz; Crude Oil +0.4% at $63.12/brl; Copper -0.5% at $2.735/lb