General Trend:
- Oil prices decline by over 5% in Asia after rising over 20% on Thursday
- (US) President Trump: Saudi Arabia and Russia may cut oil production by more than 10M barrels/day, hopes Russia and Saudi Arabia will make a deal to cut production by 15Mbpd; US has made no concessions to Russia or Saudi Arabia in regards to production cuts
- Trump to meet with oil executives on Friday (April 3rd) at 3 PM EST
- PBOC official said the deposit rate is a tool, but needs to be balanced in use
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +1.0%
- WBC.AU CEO King: Considering stopping dividend payments in May; will look at the balance sheet while noting that a number of self-funded retirees live on dividends – AFR
- (AU) AUSTRALIA FEB RETAIL SALES M/M: 0.5% V 0.4%E
- (AU) Australia Mar AIG Performance of Construction Index: 37.9 v 42.7 prior
- (AU) Australia Mar Final CBA PMI Services: 38.5 v 39.8 prelim
- (AU) Reserve Bank of Australia (RBA) buys total of A$2.0B in government securities v A$2.0B target (A$2.0B prior)
- (AU) Reserve Bank of Australia (RBA): Excess cash at exchange settlement (ES) accounts at A$78.2B v A$75.1B prior
- (AU) Reserve Bank of Australia (RBA) adds A$197M to banking system through repos v A$200M prior
- (AU) Australia AOFM: planning to sell A$5.0B in bonds most weeks, to establish new 30-yr bond in FY20/21
- (AU) Australia PM Morrison: National Cabinet moving into data review phase; Australia at single digit infection growth rate; modelling work on coronavirus suggests Australia is tracking well
- (NZ) Reserve Bank of New Zealand (RBNZ) buys NZ$450M in govt bonds in QE auction v NZ$450M indicated
- (NZ) Reserve Bank of New Zealand (RBNZ) to buy NZ$1.8B in bonds next week, starting April 6th [offered to buy NZ$1.35B in prior week]; again offers to buy maturities from 2021 and 2037
- (NZ) Reserve Bank of New Zealand (RBNZ) Gov Orr: We can increase stimulus if needed; suggests there are various means to increase monetary stimulus if needed
- (NZ) Reserve Bank of New Zealand (RBNZ) Assistant Gov Hawkesby: Expanding QE is decision for MPC; RBNZ stands ready to do more – press
- (NZ) New Zealand Finance Minister Robertson: To allow debt ‘hibernation’ for companies impacted by the coronavirus pandemic
Japan
- Nikkei 225 opened +0.7%
- (JP) Japan FSA: No plans to ease impairment rules on shareholdings (responds to press report)
- (JP) Japan PM Abe: Will not hesitate to declare state of emergency when necessary; We have just been holding up in fight against coronavirus
- (JP) Japan coronavirus package will include ¥100B in SME loans – Japan press
- (JP) Bank of Japan (BOJ) announcement related to daily bond buying operation: cuts 1-3 year purchases
- 6502.JP To apply for 1st section listing – Japan press
- (JP) Japan Mar Final PMI Services: 33.8 v 59.9 prelim; PMI Composite: 36.2 v 40.7 prior
- (JP) Japan Chief Cabinet Sec Suga: Coronavirus could spread quickly if we let down our guard; No change to necessity of emergency declaration
- (JP) Japan Econ Min Nishimura: Will decide on economic stimulus next week; Wants to provide benefits directly to people who are struggling in 1st phase of econ stimulus
Korea
- Kospi opened +0.4%
- (KR) South Korea Mar Foreign Reserves: $400.2B v $409.2B prior (largest decline in over 10 years); BOK says part of its foreign currency holdings may have been used to help stabilize the local market.
- (KR) US official denies report a defense cost share agreement had been reached with South Korea; negotiations between South Korea and the United States are ongoing to ensure an equitable and mutually beneficial deal for both sides – Yonhap
China/Hong Kong
- Hang Seng opened -0.9%; Shanghai Composite opened -0.3%
- (CN) CHINA MAR CAIXIN PMI SERVICES: 43.0 V 39.0E (2nd weakest reading on record, 2nd consecutive contraction)
- (CN) China PBOC Vice Gov Liu: Benchmark deposit rate is bedrock of PBOC toolbox; Further consideration needed before changing deposit rate
- (CN) China National Health Commission Coronavirus Update for April 2nd: 31 additional cases (29 imported) v 35 prior; Additional deaths: 4 v 6 prior; Additional Asymptomatic cases 60 v 55 prior; Total 1,482 v 1,422 prior
- (CN) Communist Party Secretary in Wuhan, China: Risk of coronavirus resurgence in Wuhan is still high, Must guide residents to strengthen self-protection
- (CN) China malls, stores reopen but some, including Shanghai Walmart, are reportedly seeing less than half usual levels of traffic – Nikkei
- (CN) China Commerce Min Zhong Shan:China will seek further opening up and upgrade of foreign trade and investment amid the global pandemic of COVID-19, to offset the economic shock, including shortening the negative list – Xinhua
- (CN) China Banking and Insurance regulator (CBIRC): China commercial banks added CNY7.0T in new loans Q1, +20% y/y; to lower borrowing costs by 100bps for SMEs in Hubei
- (CN) China Ministry of Finance (MOF) reports Q1 local govt bond issuance CNY1.6T (record high); New sales CNY1.5T – Xinhua
- (CN) China Foreign Ministry spokesperson Hua Chunying: China refutes US intelligence officials’ accusations that China concealed the extent of the coronavirus epidemic and under reported numbers of cases and deaths, such remarks are “shameless and immoral” – Xinhua
- (CN) China PBOC sets Yuan reference rate: 7.1104 v 7.0995 prior (weakest since March 2008)
- (CN) China PBoC Open Market Operation (OMO): Skips Reserve Repo Operations for the 3rd consecutive session; Net CNY0B v CNY0B prior
Other Asia
- (MY) Malaysia central bank projects 2020 GDP growth of -2.0% to 0.5%, inflation -1.5% to 0.5% (0.7% in 2019); Stimulus measures to add 2.8% to growth in 2020
- (MY) Malaysia Feb Trade Balance (MYR): 12.6B v 11.0Be
- (SG) Singapore Mar PMI: 33.3 v 47.0 prior (record low)
- (SG) Singapore Feb Retail Sales M/M: -8.9% v +0.2% prior; Y/Y: -8.6% v -8.4%e
North America
- (US) WEEKLY INITIAL JOBLESS CLAIMS: 6.648M V 3.700ME (record high for 2nd week in a row); CONTINUING CLAIMS: 3.029M V 4.941ME
- (US) White House reportedly calling for 10-15M bbl oil production cut after speaking with the Saudis and Russians – CNBC
- TSLA Reports Q1 vehicle production 102.7K, deliveries 88.4K; Shanghai factory achieved record production level
- Apple [AAPL]: Told employees all US retail stores to be closed until May – Internal memo
- (US) President Trump: We are in a critical phase in our war against coronavirus; Paycheck protection program will start tomorrow – daily press conference briefing
- (US) President Trump: Saudi Arabia and Russia may cut oil by more than 10M barrels/day
- (US) S&P AFFIRMS US SOVEREIGN RATING AT AA+; OUTLOOK REMAINS STABLE
Europe
- (UK) Finance Ministry expands business loan scheme to medium sized companies, relaxes criteria for small companies applying for loans through existing program
- (IE) Ireland Central Bank: 2020 GDP may be -8.3% due to virus restrictions, cannot produce a conventional forecast given uncertainty of current situation; Unemployment could reach ~25% in Q2
- (IE) Ireland Mar PMI Services: 32.5 v 59.9 prior (fastest rate of contraction since April 2009)
Levels as of 1:20 ET
- Nikkei 225, -0.8%, ASX 200 -1.7%, Hang Seng -1%; Shanghai Composite -0.6%; Kospi -0.6%
- Equity Futures: S&P500 -1.4%; Nasdaq100 -1.3%, Dax -1.1%; FTSE100 -0.8%
- EUR 1.0865-1.0833 ; JPY 108.19-107.80 ; AUD 0.6069-0.6045 ;NZD 0.5924-0.5895
- Gold -0.3% at $1,632/oz; Crude Oil -5.7% at $23.88/brl; Copper -0.6% at $2.208/lb
