Taiex Drops Amid COVID-19 Concerns

General trend

• US equity FUTs continued to move lower during Asia, Nasdaq FUTs lagged; Financials trade generally lower in Asia after US declines.
• Nikkei has extended decline, despite the higher open and prior loss of >3%.
• Japanese corporate earnings remain in focus [Nissan declined over 10% after issuing earnings/guidance; Toyota Motor and Softbank Group declined ahead of earnings reports; Other companies due to report earnings today include NTT, NEC, Fujifilm, Shiseido].
• Hang Seng has pared gain [Financials trade generally weaker; TECH index pared gain].
• Shanghai Composite ended the morning session flat after the lower open [Consumer Staples and Banks indices rose; Property index dropped amid report related to tax; IT index also declined].
• S&P ASX 200 has moved lower after opening flat [Energy and Resources indices lagged; Qantas weighs on Industrials index; AusNet weighs on utilities index; Materials index rises on earnings from CSR].
• Taiex drops >8% amid concerns about additional COVID restrictions.
• Australia 10-yr bond yield rose ahead of issuance update.
• China April bank lending and money supply data due later today.
• Companies due to report during the NY morning include Arcos Dorados, TowerJazz, Wendy’s, Wolverine Worldwide.

Headlines/Economic data

Australia/New Zealand

• ASX 200 opened 0.0%.
• CBA.AU Reports Q3 (A$) Cash profit 2.4B v 1.3B y/y.
• CSR.AU Reports FY20 (A$) Adj Net 160.4M v 134.8M y/y; Rev 2.12B v 2.21B y/y.
• CAR.AU Confirms acquisition in Trader interactive for ~$624M; Announces A$600M renounceable entitlement offer at A$17/shr; Guides FY21.
• (AU) Australia debt agency, AOFM, gives 2021-22 bond issuance program: Sees this year Bond issuance ~A$210B (prior A$230B); Treasury bonds at ~A$130B.
• (AU) Australia 2021-22 Federal Budget: FY20/21 budget deficit forecast to A$161B v A$197.7B prior; Raises 2021/2022 GDP growth forecast from 3.5% to 4.25%; Raises 2021/2022 CPI from 1.5% to 1.75% (yesterday after the close).

Japan

• Nikkei 225 opened +0.4%.
• 8604.JP CEO Okuda: Have nearly completely exited from ‘US Holding incident’; Prime brokerage unit important service that supports overall equities business – investor update.
• (JP) Japan Apr FX Reserves $1.38T v $1.37T prior.
• 7203.JP Reports FY20/21 Net ¥2.25T v ¥2.04T y/y; Op ¥2.20T v ¥2.40T y/y; Rev ¥27.2T v ¥29.9T y/y; Announces ¥250B shares buyback (up to 1.5% of shares outstanding) and 5 for 1 share split.

Korea

• Kospi opened 0.0%.
• (KR) South Korea Apr Unemployment Rate: 3.7% v 3.9% prior; Total people employed 27.2M, +652K y/y (largest job growth in ~7 years).

China/Hong Kong

• Hang Seng opened +0.2%; Shanghai Composite opened -0.4%.
• (CN) China PBOC sets Yuan reference rate: 6.4258 v 6.4254 prior.
• (CN) China PBOC Open Market Operation (OMO): Injects CNY10B in 7-day reverse repos v CNY10B in 7-day reverse repos prior; Net inject CNY10B v Net inject CNY10B prior.
• (HK) The number 2 officer in the Hong Kong National Security Police (Frederic Choi) is currently under probe, has been ordered to take ~1 month of leave – SCMP.
• (CN) China PBoC Monetary Policy Report reiterates stance of flexible, targeted monetary policy; imported inflation risks are controllable overall (after the close yesterday).
• (CN) China govt officials said to discuss property tax reform (yesterday after the close).

Other

• (TW) Taiwan Health Min: Taiwan may increase coronavirus alert level in ‘coming days’ – Press.
• (TW) Taiwan Govt fund will discuss market support if needed –Press (comments after market fell 8%).

North America

• (US) Weekly API Crude Oil Inventories: -2.5M v -7.7M prior; Gasoline: +5.6M v -5.3M prior.
• JNJ CDC: Identifies 23 blood clot cases out of 8.4M doses, cases mostly in women younger than 50; benefits still outweigh risks.
• (US) Colonial Pipeline: Reiterates working with Energy Dept, targeting to have pipeline up and running by the end of the week, Will take a few days to get back fully online.
• BTC/USD SEC issues warning: Volatility and lack of regulation in bitcoin are risks, it is a highly speculative investment – press.
• (US) Senator Cornyn (R-TX): Emergency spending is justified for crisis in semiconductor supply.
• CRM Japan COVID vaccine system impacted by Salesforce outage – Japan press.

Europe

• (ES) ECB’s De Cos (Spain): Reiterates Council view that Euro-Area will see strong growth in coming months.
• (DE) Germany Green party keeps lead in poll over Merkel party CDU.

Levels as of 01:15ET

• Hang Seng +0.2%; Shanghai Composite -0.1%; Kospi -1.4%; Nikkei225 -1.4%; ASX 200 -0.9%.
• Equity Futures: S&P500 -0.4%; Nasdaq100 -0.6%, Dax -0.3%; FTSE100 -0.2%.
• EUR 1.2182-1.2115; JPY 108.91-108.59 ;AUD 0.7846-0.7785; NZD 0.7284-0.7227.
• Commodity Futures: Gold -0.3% at $1,830/oz; Crude Oil +0.2% at $65.38/brl; Copper +0.1% at $4.80/lb.