General Trend:
- Shanghai Composite underperformed during morning session; Property sector lagged as China reiterated warning related to speculation
- Sectors moving higher in Australia include Energy, Telecom and Consumer Discretionary
- PBOC left 7-day reverse repo unchanged at 2.20%, continued to set yuan (CNY) at weakest level since 2008
- HK Chief Exec: HK airport to gradually resume transit services on June 1
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.1%
- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 92.7 v 92.3 prior (8th consecutive increase)
- (NZ) New Zealand Apr Trade Balance (NZ$): 1.3B v 1.3Be (record high surplus); Imports: 4.0B v 5.1B prior (lowest level since 2016)
- (AU) Australia Trade Min Birmingham: Australia has an anti-dumping system, our decisions are open to appeal through the WTO; China has not chosen to do that with any of our decisions to date – local press
- (AU) Australia PM Morrison: We must enable our businesses to earn Australia’s way out of this crisis; that means focusing on the things that can make their businesses go faster – National Press Club Address
Japan
- Nikkei 225 opened +0.9%
- (JP) Bank of Japan (BOJ) Gov Kuroda: BOJ will actively take steps to ease corporate strains, BOJ ready to ease “without hesitation” if needed
- 7201.JP Renault and Nissan cancel plans for full merger, companies will instead work to repair their alliance – financial press
- (JP) Japan PM Abe formally lifts the National State of Emergency for remaining prefectures on Monday, May 25th (as expected); says exit from outbreak now in view (after the close yesterday)
- (JP) Bank of Japan (BOJ) said to have had unrealized gains from ETF holdings in March – Japan press
- 4901.JP Japan Govt has reportedly given up on trying to approve Avigan by end of May – press
- (JP) Japan MoF sells ¥500B v ¥500B indicated in 0.50% 40-year JGBs, highest accepted yield 0.505% v 0.45% prior, bid to cover: 3.06x v 2.66x prior
Korea
- Kospi opened +0.3%
- (KR) South Korea May Consumer Confidence: 77.6 v 70.8 prior (largest increase in 3-years)
- (KR) South Korea and China to discuss larger scope for free trade agreement (FTA) – Yonhap
- (KR) South Korea Q1 Overseas Card Spending: $3.6B v $4.7B y/y (fastest decline in more than 10-years); -25.3% q/q (sharpest decline since Q4 2008)
China/Hong Kong
- Hang Seng opened +1.1%; Shanghai Composite opened +0.4%
- (CN) China PBOC Gov Yi Gang: Reiterates no time table for digital currency and prudent monetary policy to be more flexible, economic fundamentals are unchanged despite many uncertainties – China Financial News
- (CN) China PBOC to auction CNY5.0B in central bank bill swap (CBS) operation on today’s session v CNY5.0B prior at 2.35% v 2.35% prior
- (CN) China PBoC Open Market Operation (OMO): Injects CNY10B in 7-day reverse repos v 37 consecutive skips prior; Net injection CNY10B v CNY0B prior
- (CN) China National Health Commission Coronavirus Update for May 25th: 7 additional cases (7 imported v 11 prior) v 11 prior; Additional deaths: 0 v 0 prior; Additional Asymptomatic cases: 29 v 40 prior
- 880.HK Majority shareholder, Stanley Ho, reported to be critically ill – HK press
- (CN) China Banking and Insurance Regulator (CBIRC): Reiterates China will continue to curb real estate bubble – CSJ
- (CN) China PBOC sets Yuan reference rate: 7.1293 v 7.1209 prior (weakest fix since early 2008, 2nd consecutive weaker multi-year setting)
- (HK) China People Liberation Army (PLA) Hong Kong Garrison Commander: Firmly supports Hong Kong Security Law; garrison has determination, confidence and ability to safeguard national sovereignty, security and development interests
- (HK) Hong Kong Chief Exec Lam reiterates National Security law is not against basic law; critics are ignoring constitutional China/Hong Kong relationship
Other
- (SG) SINGAPORE Q1 FINAL Q1 GDP Q/Q: -4.7% V -8.2%E; Y/Y: -0.7% V -1.6%E; Cuts 2020 GDP outlook from -4.0% to -1.0% to -7.0% to -4.0% (3rd cut to GDP outlook)
- (SG) Singapore Central Bank (MAS): Monetary policy stance remains unchanged and appropriate; Next policy review remains in October
- (SG) Singapore Apr CPI M/M: -0.9% v -0.8%e; Y/Y: -0.7% v -0.5%e; CPI Core Y/Y: -0.3% v -0.5%e
North America
- (CA) Bank of Canada Gov Poloz (outgoing): Significant monetary stimulus needed in economy rebuild, dominate concern was downside risk, threat of deflation; emphasizes that inflation target remains the overarching goal and is the prime mission of our monetary policy – final speech as BOC Gov
- REGN Sanofi to sell majority of its 20.6% stake, drug collaborations will not be impacted
Europe
- (UK) PM Johnson denies he knew what his adviser Cummings was doing when he broke lockdown, issues an apology; Cummings acted reasonably, legally with integrity
- (EU) EBA Chairman Campa: EU must present united front to shield pandemic impacted banks; That could be in the form of a TARP-style precautionary recapitalization; the EU recovery fund could play a role
- LHA.DE Confirms approval from Economic Stabilization Fund (WSF) of the Federal Republic of Germany that the WSF has approved up to €9.0B stabilization package
Levels as of 1:15ET
- Hang Seng +1.9%; Shanghai Composite +0.8%; Kospi +1.6%; Nikkei225 +2.6%; ASX 200 +2.1%
- Equity Futures: S&P500 +1.8%; Nasdaq100 +1.9%, Dax +0.9%; FTSE100 +0.8%
- EUR 1.0922-1.0893; JPY 107.92-107.69; AUD 0.6576-0.6538; NZD 0.6133-0.6094
- Commodity Futures: Gold -0.3% at $1,730/oz; Crude Oil +3.5% at $34.41/brl; Copper +0.3% at $2.42/lb
