General Trend:
- Equity markets in Shanghai and HK underperform in early trading; Declining sectors in Shanghai include Telecom Services and Property
- China Unicom rises over 1% post earnings
- Bank of China and Bank of Communications decline in HK amid some focus on oil-related exposures
- China’s Bank of Communications to suspend open positions related to crude oil trading products, effective from today [Earlier this week, it was reported that the Bank of –
- China had halted account openings for crude futures linked to US oil]
- China said to have halted application process for certain ETFs amid concerns about the sizes of some ETFs (areas mentioned included 5G and crude oil)
- Marine Transportation index rises over 1% in Japan, financials lag
- Japanese drug maker Eisai declines by over 7% on delay related to Alzheimer’s treatment
- Sectors moving higher in Australia include Resources and Energy, Financials and Consumer Staples lag
- Energy name Santos rises over 8% in Australia amid Q1 production update and rise in oil prices; Rare earths miner Lynas rises over 13% on contract from the US DoD
- South Korean earnings in focus: Hynix declines after Q1 earnings report and outlook commentary
- Hyundai Motor rises on Q1 earnings beat, pares some of gain amid cautious Q2 commentary
- Daimler reported prelim Q1 results, guided FY20 results lower y/y
- There is speculation that NYSE may start to reopen in May [NYSE had moved to only electronic trading back on March 23rd due to coronavirus]
- Aussie exports rose 29% m/m in March, stats agency noted rise in iron ore exports to China (prelim trade data)
- Australian and Japanese PMI data showed deeper contractions in April
- BOJ confirmed it will shorten next week’s policy meeting to 1 day (from 2 prior), said move is aimed at containing spread of coronavirus
- There is speculation that the BoJ may increase purchases of corp debt and commercial paper at the April 27th policy meeting
- South Korea Q1 prelim GDP showed largest contraction since 2008, private consumption was the weakest since 1998
- HKMA continues to intervene amid strength in the HKD
- Trump signed executive order that temporarily suspends immigration to the US
- ‘Large’ amount of medium-term interbank loans are scheduled to mature in China on Friday (April 24th); Markets see less demand for targeted MLFs due to liquidity levels (Chinese press)
- US weekly initial jobless claims due later today (expected at 4.5M vs ~5.2M prior)
- US companies expected to report during the NY morning include Air Products, Arch Coal, The Blackstone Group, Citrix Systems, Dominos Pizza, W.W. Grainger, Hershey, Eli Lilly, PulteGroup, Pool Corp and Union Pacific
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.5%
- (AU) AUSTRALIA APR PRELIM CBA PMI MANUFACTURING: 45.6 V 49.7 PRIOR (record low, 2nd consecutive month of contraction); PMI Services: 19.6 v 38.5 prior (record low, 3rd consecutive month of contraction); PMI Composite: 22.4 v 39.4 prior (record low, 3rd consecutive month of contraction)
- STO.AU Reports Q1 (A$) Rev 883M v 1.02B y/y; Production MMBOE 17.9 v 18.4 y/y; Raises FY20 production 81-89 MMBOE (prior 79-87); sales volumes 101-109 MMBOE (prior 99-107)
- (AU) Reserve Bank of Australia (RBA): Excess cash at exchange settlement (ES) accounts at A$67.3B v A$71.3B prior
- (AU) Australia prelim Mar Exports A$8.0B, +29% y/y; Value of Imported Goods +10% y/y
- (AU) Reserve Bank of Australia (RBA) adds A$2.71B to banking system through repos v A$550M prior
- (NZ) Reserve Bank of New Zealand (RBNZ) buys NZ$129M in LGFA at QE auction v NZ$130M sought
- (AU) Reserve Bank of Australia (RBA) offers to buy total of A$500M in bonds v A$1.0B prior
- (AU) Australia PM Morrison: Australia on the road back from coronavirus lockdown; Banks need to improve financing turnaround times
- (AU) Australia Treasurer Frydenberg: 275K Businesses have applied for Jobkeeper payments; Australians have accessed A$3.8B of early superannuation payments
- (NZ) New Zealand sells NZ$800M v NZ$800M indicated in April 2025, April 2027 and April 2033 bonds
Japan
- Nikkei 225 opened +0.9%
- (JP) Bank of Japan (BOJ) confirms to shorten 2 day policy meeting to 1 day April 27th from 09:00-12:00 JST, aimed at containing spread of coronavirus
- (JP) JAPAN APR PRELIM PMI MANUFACTURING: 43.7 V 44.8 PRIOR (lowest reading since Apr 2009); PMI Services: 22.8 v 33.8 prior (record low, 3rd month of contraction); PMI Composite: 27.8 v 36.2 prior (record low, 3rd month of contraction)
- (JP) Bank of Japan (BOJ) said to be considering additional monetary easing – Japan press
- 5406.JP To furlough 10.0K workers starting in May – press
- TM Reportedly to cut Japan domestic vehicle production by 50% in May – Nikkei
- (JP) Japan MoF sells ¥2.0T v ¥2.0T indicated in 0.10% 2-year JGBs, avg yield: -0.140% v +0.023% prior, bid to cover: 5.43x v 4.19x prior (multi-year high)
Korea
- Kospi opened +0.6%
- 000660.KR Reports Q1 (KRW) Net 648.2B v 1.1T y/y (256Be); Op 800.3B v 1.4T y/y (487Be); Rev 7.20T v 6.77T y/y (6.9Te); Affirms FY20 CAPEX “to decline sharply y/y”
- (KR) Follow Up: There has been no update or comment regarding North Korea leader Kim health status since conflicting reports after cardiovascular surgery
- (KR) SOUTH KOREA Q1 PRELIM GDP Q/Q: -1.4% V -1.5%E (largest contraction since 2008); Y/Y: 1.3% V +1.0%E; Private consumption -6.4% v +0.9% prior (lowest level since 1998)
- (KR) Bank of Korea (BOK) Official Park: Weakening global demand likely to show in Q2 exports; Chip exports are rising due to online activities, trend may support South Korea GDP
China/Hong Kong
- Hang Seng opened +0.4%; Shanghai Composite opened +0.2%
- (CN) China National Health Commission Coronavirus Update for April 22nd: 10 additional cases (6 imported) v 30 prior; Additional deaths: 0 v 0 prior; Additional Asymptomatic cases: 27 v 42 prior
- (CN) Market seeing less demand for Targeted Medium Term Lending Facility (TMLF) loans due to increased liquidity – China Securities Journal
- (HK) Hong Kong Monetary Authority (HKMA) used HK$3.37B to defend currency peg v sold HK$4.34B last intervention; Total operations to date now HK$66.8B
- (HK) Hong Kong Monetary Authority (HKMA) sells HK$1.82B as HK$ touch stronger end of trading band
- (CN) China PBOC sets Yuan reference rate: 7.0887 v 7.0903 prior
- (CN) China Mar Swift Global Payments CNY: 1.85% v 2.11% prior
- (CN) China PBoC Open Market Operation (OMO): Skips Reserve Repo Operations for the 16th consecutive session; Net CNY0B v CNY0B prior
- (CN) China Iron and Steel Association (CISA): China steel mills have generally resumed operations, Q2 steel exports will show significant decline y/y
- (CN) China Hubei province Q1 GDP -39.2% y/y (largest decline for any province on record and largest of any in Q1 2020); Shanghai Q1 GDP -6.7% y/y; Guangdong -6.7% y/y; Beijing -6.6% y/y – SCMP
Other
- (SG) Singapore Trade Min Chan: Likely to see a sharp decline in GDP, planning much more testing; Recent failure of oil trader doesn’t seem to be affecting wider market
North America
- (US) President Trump: Number of new coronavirus cases continues to decline; More US states will soon be in a position to gradually reopen; CDC Redfield totally misquoted on fall virus risk
- (US) MP Materials (private): Selected by US Dept of Defense for rare-earths related funding
- ICE NYSE could start to open in phases in May, while taking percautions – financial press
Europe
- DAI.DE Reports prelim Q1 adj EBIT €719M v €2.31B y/y; Guides FY20 EBIT lower y/y; Rev lower y/y; Total unit sales at all operations lower y/y
- (DE) Germany coalition parties have agreed to additional measures to protect workers and companies form impact of coronavirus – press
Levels as of 1:15ET
- Hang Seng +0.5%; Shanghai Composite +0.1%; Kospi +1.1%; Nikkei225 +1.0%; ASX 200 -0.4%
- Equity Futures: S&P500 +0.1%; Nasdaq100 -0.1%, Dax +0.1%; FTSE100 +0.0%
- EUR 1.0830-1.0804; JPY 107.86-107.72; AUD 0.6337-0.6283; NZD 0.5972-0.5911
- Commodity Futures: Gold +0.0% at $1,738/oz; Crude Oil +16.5% at $16.02/brl; Copper +0.4% at $2.29/lb
