General Trend:
- Trump says to impose tariffs on all goods from Mexico from June 10th , said tariffs could gradually rise to 25% if Mexico does not address illegal immigration issue
- Mexican Peso (MXN) declines over 2% on comments by Trump
- Trump comments on Mexico weigh on automakers in South Korea and Japan
- Aussie credit growth slows ahead of next week’s RBA decision (June 4th)
- Australian Q1 government bond market turnover rises 44% q/q
- South Korea Fin Ministry said April current account deficit is possible, notes impact of stock dividend payments
- Bank of Korea (BOK) Chief reiterates not time for rate cut, one BoK member voted for rate cut
- BoJ may announce its June bond purchase schedule later today
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -0.1%
- (AU) Australia Apr Private Sector Credit M/M 0.2% v 0.3%e; Y/Y: 3.7% v 3.8%e (5.5 year low)
- (AU) AOFM: March Australia government bond market turnover A$156.6B (highest level since July 2016). +35% m/m
- (NZ) New Zealand May Consumer Confidence: 119.3 v 123.2 prior
China/Hong Kong
- Shanghai Composite opened -0.1%, Hang Seng -0.4%
- (CN) CHINA MAY MANUFACTURING PMI (OFFICIAL): 49.4 V 49.9E (moves back below 50 into contractionary territory; lowest reading since Feb); Non-manufacturing PMI: 54.3 v 54.3e
- Huawei: Said to have repatriated US workers from base in China – FT
- (CN) China govt said to have put US soy purchases on hold – financial press
- (US) President Trump: Reiterates view that he believes China would “love” to make a trade deal; China wants to make a deal because companies are leaving the country to avoid the tariffs
- (CN) Follow Up: China has plan ready to cub rare earth sales to US if needed
- (CN) China Former PBoC Chief Dai Xianglong: Expects no major breakthrough between US and Chinese leaders at G20 meeting; China able to keep stock market above 3,000 points in the future
- (CN) China PBoC sets yuan reference rate: 6.8992 v 6.8990 prior
- (CN) China PBoC Open Market Operation (OMO): Skips OMO v CNY30B injected in 7-day reverse repos prior; Net: CNY0B v CNY30B injection prior
Japan
- Nikkei 225 opened -0.8%
- (JP) Japan Fin Min Aso: Won’t comment on Trump remark on tariffs related to imports from Mexico; no plan to talk with US Treasury Sec Mnuchin about currencies in Fukuoka
- (JP) Japan Apr Preliminary Industrial Production M/M: 0.6% v 0.2%e; Y/Y: -1.1% v -1.5%e
- (JP) Japan Apr Retail Sales M/M: 0.0% v 0.6%e; Y/Y: +0.5% v 0.9%e
- (JP) Japan May Tokyo CPI Y/Y: 1.1% v 1.20%e; CPI Ex-Fresh Food Y/Y: 1.1% v 1.20%e
- (JP) JAPAN APR JOBLESS RATE 2.4% V 2.4%E
- (JP) Japan May Consumer Confidence: 39.4 v 40.7e (lowest reading since early 2015)
Korea
- Kospi opened -0.5%
- (KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 1.75%; AS EXPECTED
- (KR) South Korea Finance Ministry statement after gov’t meeting: May post April current account deficit on stock dividend payments; expects exports to decline in May on global slowdown and chip shipments
- (KR) South Korea Apr Industrial Production M/M: 1.6% v 1.00%e ; Y/Y: -0.1% v -2.20%e
Other
- (PH) Philippines Central Bank (BSP) Chief Diokno: Has more room to ease monetary policy, sees more cuts in RRR
North America
- (US) US President Trump: US to impose 5% tariff on all goods from Mexico. Tariffs will gradually increase to 25% “until illegal immigration problem is remedied”
Levels as of 1:20 ET
- Nikkei 225, -1.4%, ASX 200 -0.1%, Hang Seng -0.3%; Shanghai Composite +0.2%%; Kospi +0.3%
- Equity Futures: S&P500 -0.8%; Nasdaq100 -0.8%, Dax -0.9%; FTSE100 -0.4%
- EUR 1.1142-1.1127 ; JPY 109.62-109.12 ; AUD 0.6919-0.6901 ;NZD 0.6517-0.6501
- Gold +0.3% at $1,290/oz; Crude Oil -0.9% at $56.06/brl; Copper +0.2% at $2.655/lb
