BOJ Moves To ‘Unlimited’ Bond Buying, JGB Futs Rise

Apr 27 20, 08:28 GMT

General Trend:

WTI Crude Futs decline by over 8% in Asia; Saudi ARAMCO started cutting production early to meet new production target set by OPEC+, to meet 8.5Mbpd target a little ahead of schedule [in line with speculation from April 21st]
Gainers during the morning session in Shanghai include Banks and Property firms
ZTE rises over 1% in HK following Q1 results
HK bank earnings in focus this week: HSBC is due to report on Tuesday (April 28th), Standard Chartered is due to report Q1 results on Wed (April 29th)
TOPIX Banking index rises after BOJ decision
Fanuc rises over 10% in Japan following FY results and guidance
Aussie Consumer Discretionary companies rise as Queensland plans to ease certain lockdown measures; Banks weighed down by NAB’s capital raise and dividend announcement
Will the Trump Administration continue to hold coronavirus briefings on a daily basis?

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened flat
NAB.AU Reports H1 (A$) Cash profit 1.44B v 3.3B y/y; Net interest income 6.89B v 6.73B y/y; Rev 8.92B v 9.17B y/y; To undergo institutional placement of A$3.0B and A$500M SPP
(AU) Reserve Bank of Australia (RBA): Excess cash at exchange settlement (ES) accounts at A$66.4B v A$69.6B prior
(AU) Reserve Bank of Australia (RBA) adds A$4.28B to banking system through repos v A$1.3B prior
(AU) Reserve Bank of Australia (RBA) offers to buy total of A$500M in bonds v A$500M prior

Japan

Nikkei 225 opened +0.8%
(JP) BANK OF JAPAN (BOJ) LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%; STRENGTHENS STIMULUS; ENABLES UNLIMITED JGB BUYING: INCREASES PURCHASES OF CORP BONDS AND COMMERCIAL PAPER; ADJUSTS FORWARD GUIDANCE
(JP) Bank of Japan (BOJ) Q1 Outlook for Economic Activity and Prices: Economy is likely to remain in a severe situation for the time being due to coronavirus at home and overseas; cuts FY19/20 and FY20/21 GDP to contraction forecasts
(JP) Japan PM Abe party wins the Japan special election for Japan lower house during coronavirus pandemic; Voter turnout record low 34.1%
(JP) Japan Fin Min Aso: It is up to the Bank of Japan (BOJ) To make decisions regarding policy steps; Expects BOJ to support financial stability and companies cash flow
(JP) Former Bank of Japan (BOJ) Board Member: Japan needs a more aggressive economic response to coronavirus – press
(JP) Japan Chief Cabinet Sec Suga: Cabinet approved extra budget; Reiterates extending state of emergency based on expert opinion
(JP) Japan PM Abe: Economy in extremely severe state; this will continue; Wants to start cash handouts as early as possible in May

Korea

Kospi opened +0.4%
(KR) According to Hyundai Research Institute South Korea 2020 GDP seen at -0.3% (reminder IMF forecast is -1.2%) – Yonhap
(KR) Japanese media report claims North Korea leader Kim Jong Un is in a “vegetative state” after undergoing heart surgery earlier this month
(KR) North Korea state radio issued statement from Leader Kim: Comrade Kim Jong-un sent appreciation to workers earnestly and wholeheartedly supporting in furnishing Samjiyon; no comments on his health or whereabouts – Yonhap
(KR) South Korea top foreign policy adviser Moon Chung-in: North Korea leader Kim is alive and well, the position of South Korea’s gov’t is firm – CNN
(KR) South Korea 3rd extra budget expected to be ~KRW30T – Korean press; Follow Up: Govt denies the report
(KR) Bank of Korea (BOK) sells 1-year Monetary Stabilization Bonds (MSB); avg yield 0.76% v 1.00% prior
(KR) South Korea Industry Min Sung: Will spare no effort to help local shipbuilders amid declining ship orders due to virus pandemic an declining oil prices – Yonhap
(KR) Bank of Korea (BOK) loan offer of $4.0B to banks v $4.0B prior; draws $1.26B in demand v $2.025B prior

China/Hong Kong

Hang Seng opened +0.8%; Shanghai Composite opened +0.1%
(CN) China National Health Commission Coronavirus Update for April 26th: 3 additional cases (2 imported v 5 prior) v 11 prior; Additional deaths: 0 v 0 prior; Additional Asymptomatic cases: 25 v 30 prior
(CN) China PBOC Gov Yi Gang: Inflation outlook is a warning for China bonds – US financial press
3988.HK Certain clients said to have lost ~$1.0B on bet related to oil – US financial press
(CN) China PBOC sets Yuan reference rate: 7.0703 v 7.0803 prior
(CN) China PBoC Open Market Operation (OMO): Skips Reserve Repo Operations for the 18th consecutive session; Net CNY0B v CNY0B prior
(CN) CHINA MAR INDUSTRIAL PROFITS YTD Y/Y: -36.7% V -38.3% PRIOR
(CN) China National People’s Congress (NPC) expected to take place at the end of May, expected to announce a new stimulus package and could set 2020 GDP targets at that time – press; Follow Up: China has started that Standing Committee of the National People’s Congress (NPC) plenary session Sunday; where they will decided on date for the delayed NPC (likely to be late May) – Xinhua

Other

ARAMCO.SA Started cutting production early to meet new production target set by OPEC+, to meet 8.5Mbpd target a little ahead of schedule
According to Goldman global storage capacity for oil expected to be filled within 3-4 weeks, once it is filled there will be nowhere to put additional production; Oil producers will have to close down enough supply to match demand loss which is seen as a cut of ~18-20M bpd by middle of March – press

North America

(US) Small Business Administration (SBA) said to be planning to cap lending under the emergency coronavirus program – NY Post
(US) President Trump calls daily coronavirus press briefings as “not worth the time and effort” (update)

Europe

DBK.DE Reports prelim Q1 Net €66M v €201M y/y; Pretax €206M v €292M y/y; Rev €6.4B v €6.35B y/y; Provisions for credit losses €500M (44bp of loans) v €140M y/y
AIR.FR CEO Faury: Company is “bleeding cash” at a rate that threatens our existence and need to quickly cut costs and adapt to the rapidly changing industry; Have lost 1/3 of our business in the last few weeks; recent cuts to production are not worst case scenario moves – press citing letter to employees
(EU) Said that EU companies will be able to receive up to 5% of their 2019 Rev via govt loans for support during coronavirus pandemic – financial press

Levels as of 1:15ET

Hang Seng +1.8%; Shanghai Composite +0.7%; Kospi +2.0%; Nikkei225 +2.6%; ASX 200 +1.2%
Equity Futures: S&P500 +1.0%; Nasdaq100 +1.3%, Dax +1.2%; FTSE100 +0.6%
EUR 1.0844-1.0812; JPY 107.62-107.22; AUD 0.6454-0.6382; NZD 0.6066-0.6008; GBP/USD 1.2442-1.2360
Commodity Futures: Gold +0.4% at $1,741/oz; Crude Oil -9.0% at $15.41/brl; Copper +0.8% at $2.38/lb