General Trend:

  • China video surveillance firm Hikvision declines by daily limit on US blacklist speculation; Shares pare some of declines after response by company
  • Later report says even more Chinese video surveillance firms could be blacklisted
  • Chinese chipmakers extend gains on speculation they may benefit from US crackdown on Huawei
  • Men’s retailer Mulsanne Group [1817.HK] says acceleration of US/China trade war weighed on the pricing of its IPO
  • China Ambassador to the US says remains ready to hold trade talks with US (no timeframe given)
  • PBOC continues to fix the yuan weaker in the face of the speculated US/China trade talk impasse
  • PBoC said to plan to sell additional CNY denominated bills in HK amid recent currency weakness
  • Japanese exports decline for 5th straight month in April, shipments to China weigh
  • Japan 20-yr bond auction has record bid to cover
  • Asian currencies trade generally weaker amid concerns related to factors including trade, geopolitics and slowing growth
  • Thailand exports weighed down by US/China trade rift
  • Post-election clashes have been reported in Jakarta (Indonesia)
  • Japanese telecoms start to take actions regarding Huawei
  • US Fed minutes due for release on Wed

Headlines/Economic Data

Australia/New Zealand

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  • ASX 200 opened slightly lower
  • (AU) China said to maintain Australia coal imports ‘slowdown’ after election – US financial press
  • (AU) AUSTRALIA Q1 CONSTRUCTION WORK DONE Q/Q: -1.9% V 0.0%E
  • (AU) Victoria State government (Australia) said to tighten rules for online betting operators – US financial press
  • (NZ) NEW ZEALAND Q1 RETAIL SALES (EX INFLATION) Q/Q: 0.7% V 0.6%E; Y/Y: 3.3% V 3.5% PRIOR
  • LYC.AU Clarifies mineral resource and ore reserve figures: Confirms there have been no material changes to the 2018 mineral resource and 2018 mineral reserve data released on Aug 6 2018
  • (AU) Australia Apr Westpac Leading Index M/M: -0.1% v 0.3% prior
  • (NZ) Reserve Bank of New Zealand (RBNZ) Publishes review of loan to value ratio (LVRs) policy: LVRs should not be used as a monetary policy lever; Should keep ability to use macro prudential tools
  • TBH.AU Unit entered into agreement with Betgenius, relates to the distribution of racing solution

Japan

  • Nikkei 225 opened +0.5%
  • (JP) Bank of Japan (BOJ) Harada (dissenter): Sales tax hike may worsen economy and push down inflation
  • (JP) Japan Trade Negotiator: Japan auto export restriction to US was not brought up during talks
  • (JP) JAPAN MAR CORE MACHINE ORDERS M/M: 3.8% V 0%E; Y/Y: -0.7% V -3.4%E
  • (JP) JAPAN APR TRADE BALANCE: ¥60.4B V ¥232.7BE; ADJ TRADE BALANCE: -¥110.9B V -¥37.5BE; Exports Y/Y: -2.4% v -1.6%e (5th consecutive decline); Exports to China -6.3% y/y; US +9.6% y/y
  • (JP) Japan MoF sells ¥900B v ¥900B indicated in 0.40% (prior 0.50%) 20-year bonds; avg yield 0.359% v 0.391% prior; bid to cover 5.47x v 4.84x prior

Korea

  • Kospi opened +0.1%
  • (KR) South Korea think tank KDI: South Korea needs ‘substantially’ accommodative monetary policy, notes slowing inflation; cuts 2019 GDP growth forecast to 2.4% v 2.6% prior
  • (KR) OECD cuts South Korea 2019 GDP outlook to 2.4% (prior 2.6%) and 2020 GDP 2.5% (prior 2.6%) due to weaker domestic demand

China/Hong Kong

  • Hang Seng opened +0.4%; Shanghai Composite opened flat
  • (CN) China Ambassador to US Tiankai: China remains ready to hold trade talks with US; China is ready to address trade imbalance with US, buy more US products and services
  • (CN) China reportedly has no information on Trump-Xi meeting at G20 in Japan despite Trump’s earlier announcement
  • (CN) China President Xi: China needs to embark on a long new march and will start all over again, being interpreted by analysts that China is prepared for a long draw out trade war with the US – SCMP
  • 700.HK Reportedly Tencent is warning about slower growth in FY19 China video ad sales – Nikkei
  • (CN) PBoC said to consider sale of additional bills amid recent currency weakness – financial press
  • 002415.CN US Trump administration said to be considering placing the company on blacklist, the final decision could be made in the coming weeks (largest provider of video surveillance equipment with internet enabled) – NYT
  • 002415.CN Exec: Not been informed of possible blacklisting by US; have other sources if US decides to limit chip sales; See no impact form any move by the US – Chinese press
  • (CN) China PBoC Open Market Operation (OMO): Injects CNY20B in 7-day reverse repos v CNY70B prior: Net: CNY20B v CNY80B prior
  • (CN) China PBoC sets yuan reference rate: 6.8992 v 6.8990 prior
  • (CN) China PBOC details plans on how it will cut RRR for rural commercial banks announced May 6th: To take part in 3 stages (May 15th, June 17th and July 15th)

Other Asia

  • (ID) Indonesia reporting that 6 have died and more than 200 injured in Jakarta as fighting breaks out over election results
  • (TH) Thailand Apr Customs Trade Balance: -$1.5B v -$0.4Be; Commerce Ministry Official says exports were hurt by US/China trade war

North America

  • (US) Weekly API Oil Inventories: Crude: +2.4M v +8.6M prior
  • (US) SEMI: Apr North America Billings: $1.91B v $1.83B prior, m/m: +4.7% v -1.9% prior; y/y: -29.0% v -24.6% prior
  • (US) Fed’s Bullard (Dove, voter): Rate cut may help maintain inflation goal credibility, 2019 CPI may fall short of target; baseline scenario is that trade agreements will be reached soon – speaks in Hong Kong on US Economic Outlook
  • WYNN Confirms MGM will not continue talks on Boston Harbor casino, remain committed to opening the casino
  • (US) US Business Lobby (AMCHAM CHINA): nearly half of member firms in China seeing non-tariff barrier retaliation in trade war – financial press

Europe

  • (UK) UK PM May Spokesperson: Cabinet discussed new deal on Brexit to be presented in Parliament, no deal remains a plausible outcome and work is ongoing
  • (UK) UK PM May Spokesman: Has not yet decided whether to whip 2nd referendum vote
  • (UK) Ireland PM Varadkar: sounds like PM May’s withdrawal bill would be acceptable to Ireland
  • (UK) PM May: Govt’s Customs Union plan is one possibility for Brexit

Levels as of 1:20 ET

  • Nikkei 225, +0.1%, ASX 200 +0.1%, Hang Seng +0.2%; Shanghai Composite -0.2%; Kospi +0.3%
  • Equity Futures: S&P500 -0.1%; Nasdaq100 -0.2%, Dax -0.1%; FTSE100 +0.3%
  • EUR 1.1170-1.1158; JPY 110.62-110.46 ; AUD 0.6887-0.6872 ;NZD 0.6511-0.6499
  • Gold flat at $1,273/oz; Crude Oil -0.8% at $62.65/brl; Copper -0.1% at $2.712/lb
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