Indices Trade Mixed After Recent Losses On Wall St

Apr 02 20, 06:46 GMT

General Trend:

Australian equities underperform, financials decline after RBNZ said banks agreed to freeze their dividends in order to support financial stability
Aussie banks pare some of the losses as Australia said no plan to restrict dividends at this time
Sectors moving lower in Japan include financials and transports
Kospi outperforms, Samsung rises on plan by South Korea to halt the stock weighting cap rule; BOK conducts first ever weekly ‘QE’ operation
Telecom Services and IT sectors rise in early trading in Shanghai, Consumer Discretionary firms lag
JGB Futures rose after Japan sold 10-year bonds at the highest bid to cover since 2019, the avg yield for the auction was also positive
Japan’s gov’t continues to reiterate that there is no need to declare an emergency related to coronavirus at the current time
Tokyo Gov: Japan govt will announce additional economic measures on April 7th (Tuesday)
County located in central China announced a partial lockdown amid concerns about the potential for a second wave related to coronavirus cases (HK press); Yunnan province (southwest China) said to also ban its citizens from leaving China
Trump reiterated domestic travel restrictions are possible, confirmed to meet with oil executives on Friday
RBNZ announced a new term lending facility (TLF), the measure is aimed at ensuring access to funding for banks at low interest rates for up to 3 years duration (which is longer than the central bank’s other liquidity facilities)

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened -0.6%
(NZ) Reserve Bank of New Zealand (RBNZ): to unveil a term lending facility; plans for a longer-term funding scheme for the banking system; will launch first TLF operation in May
(AU) Australia APRA Spokesperson: Decisions on dividends are up to bank board for time being, currently engaging with banks on their approach to dividends
(NZ) Reserve Bank of New Zealand (RBNZ) calls on banks to freeze dividends amid coronavirus
(AU) Australia putting together a commercial landlord relief package in time for National Cabinet meeting Friday, will allow for the part-deferral and part-waiver of commercial rents – AFR
(AU) Australia PM Morrison: Australia is slowing the spread of the coronavirus; Does not know when social restrictions will be eased; Cutting bank dividends not necessary at this point
(AU) Reserve Bank of Australia (RBA): Excess cash at exchange settlement (ES) accounts at A$75.1B v A$72.2B prior
(AU) Reserve Bank of Australia (RBA) adds A$0.2B to banking system through repos v A$1.35B prior
(AU) Australia sells A$2.5B v A$2.5B indicated in Jul 2020, Sept 2020 and Dec 2020 notes
(AU) Reserve Bank of Australia (RBA) offers to buy total of A$2.0B in bonds (purchases A$2.0B) v A$3.0B prior
(AU) Australia Q1 NAB Business Confidence: -11 v -2 prior (lowest level since Q1 2009); Conditions: -3 v +6 prior
(AU) Australia Feb Job Vacancies: -0.1% v 1.2% prior
(NZ) New Zealand sells NZ$800M v NZ$800M indicated in bonds due April 2023, April 2029 and April 2037

Japan

Nikkei 225 opened -0.7%
WE Reportedly Softbank will abandon Wework investor deal and allow deal to expire – press
(JP) Japan reported to allow certain companies defer tax payments due to coronavirus – Japan press
(JP) Japan Investors Net Buying of Foreign Bonds: -¥1.7B v -¥65.7B prior week; Foreign Net Buying of Japan Stocks: -¥1.4T v -¥1.5T prior week
(JP) Japan Chief Cabinet Sec Suga: Japan is doing coronavirus tests on everyone it is deemed needed for; Japan has capacity of 9.0K tests/day
(JP) Japan PM Abe: Working with local govt in Japan to deal with coronavirus, holding off on need for emergency declaration
(JP) Tokyo, Japan Gov Koeki: Japan will announce additional economic measures April 7th
(JP) Japan MoF sells ¥2.0T v ¥2.0T indicated in 0.10% 2-year JGBs, avg yield: +0.023% v -0.125% prior, bid to cover: 4.19x v 4.28x prior (btc highest since May 2019)

Korea

Kospi opened +0.5%
(KR) SOUTH KOREA MAR CPI M/M: -0.2% V -0.4%E; Y/Y: 1.0% V 0.8%E; CPI Core Y/Y: 0.7% v 0.6%e
(KR) South Korea March Loans extended by five major banks to households +KRW19.8T (largest m/m gain since Sept 2015) – Yonhap
(KR) Bank of Korea (BOK) provides KRW5.25T in liquidity via repo operations (1st weekly op)
(KR) South Korea reports 89 additional coronavirus cases v 101 prior; Additional deaths 4 v 3 prior
005930.KR Korea exchange seeks to halt Samsung stock weighting cap rule

China/Hong Kong

Hang Seng opened -1.1%; Shanghai Composite opened -0.5%
(CN) China interbank market regulator: Will increase number of “quality” bond issuers, China used 83.5% of allocated 2020 local govt bond quota in Q1; Will relax rules for issuance of short term bills and medium term notes
(CN) China military scientists hope to test coronavirus vaccine overseas, first-stage clinical trial will be published this month – SCMP
(CN) Moody’s affirms China A1 sovereign rating
(CN) Yunnan Province, China to bar citizens from leaving China in order to prevent coronavirus from spreading – Chinese Press
(CN) China said to consider reduction in subsidies related to electric vehicles (that is just announced) – US financial press
(CN) China PBOC sets Yuan reference rate: 7.0995 v 7.0771 prior
(CN) China PBoC Open Market Operation (OMO): Skips Reserve Repo Operations (2nd consecutive session); Net CNY0B v CNY0B prior
(HK) Hong Kong Monetary Authority (HKMA): No need for banks to cancel dividend payouts

North America

(US) Fed announces temporary change to supplementary leverage ratio rule to ease strains in the Treasury market resulting from the coronavirus and increase banking organizations’ ability to provide credit to households and businesses
(US) Dept of Energy (DOE) Chief: Calls on saudi Arabia and Russia to work together to calm markets, Boosting output at a time of demand loss is frustrating
WE Confirms Softbank will not complete offer, will review all legal options including litigation – email
BA Expected to announce buyouts and early retirement packages to employees as soon as Thursday – financial press

Europe

(UK) According to a poll from CIPD more than 50% of UK companies are planning to furlough staff due to coronavirus; which is likely going to exceed the UK Treasury cost expectations – FT
(RU) Senior Gulf Official: Saudi Arabia supports cooperation among oil producers to stabilize oil markets; Oil market turmoil caused by Russia opposition to proposed OPEC+ cuts at meeting in early March

Levels as of 1:15ET

Hang Seng -0.5%; Shanghai Composite +0.1%; Kospi +0.6%; Nikkei225 -1.6%; ASX 200 -2.0%
Equity Futures: S&P500 +0.9%; Nasdaq100 +0.8%, Dax +1.4%; FTSE100 -0.4%
EUR 1.0969-1.0939; JPY 107.57-107.06; AUD 0.6094-0.6063; NZD 0.5939-0.5906
Commodity Futures: Gold +0.4% at $1,597/oz; Crude Oil +5.3% at $21.39/brl; Copper +0.3% at $2.18/lb