Asia Trades Higher, USD Index Has Modest Decline, US Retail Earnings In Focus

May 18 21, 06:22 GMT

General trend

Asian equities opened flat to higher despite the declines on Wall St; US equity FUTs rise in Asia; Energy shares trade generally higher after overnight rise in oil prices.
Nikkei outperforms after lagging on Monday [Big Nikkei components rise after prior declines (Fast Retailing, Softbank Group); Topix Banks index rises after earnings from MUFG].
Hang Seng has remained higher [Energy cos. and TECH index rise; Financial and Property firms also move higher]; Baidu reports earnings after the market close.
Shanghai Composite lagged during the morning session [Banks and Consumer indices decline during morning session].
S&P ASX 200 has extended modest gains [Resources index gains over 2% amid rise in Chinese ore prices; Gold miner St Barbara drops over 8% on guidance cut; Energy index rises over 1.5%; Financials also rise; Industrials lagged after results/guidance from James Hardie].
Taiex has gained over 4%, the index dropped ~3% during prior session.
Australia Treasury Sec and China NDRC comment on iron ore.
Australia Q1 wage data due on Wed (May 19th); April jobs data due on Thurs (May 20th).
Companies due to report earnings during the NY morning include Home Depot, HUYA, iQiyi, Macy’s, Netease.com, Walmart.

Headlines/Economic data

Australia/New Zealand

ASX 200 opened +0.2%.
(AU) Australia Treasury Sec Kennedy: Aussie economic recovery stronger than many other countries; Iron ore price key uncertainty for economic outlook.
JHX.AU Reports FY21 Net $262.8M v $241.5M y/y; adj EBIT $629M v $486.8M y/y; Rev $2.9B v $2.6B y/y.
(AU) Reserve Bank of Australia (RBA): Excess cash at exchange settlement (ES) accounts at A$214.7B v A$195.8B prior (Record high).
(AU) RESERVE BANK OF AUSTRALIA (RBA) MAY MEETING MINUTES:NO RATE RISE UNTIL ACTUAL INFLATION SUSTAINABLY IN 2-3% TARGET BAND; REITERATES NOT EXPECTED TO SEE CONDITIONS FOR RATE RISE UNTIL 2024.
(AU) China National Development and Reform Commission (NDRC): Australia should stop wrong actions of interfering with bilateral trade.

Japan

Nikkei 225 opened +0.4%
(JP) JAPAN Q1 PRELIMINARY GDP Q/Q: -1.3% V -1.1%E; GDP ANNUALIZED Q/Q: -5.1% V -4.5%E; Business Spending Q/Q: -1.4% v 0.8%e.
(JP) Japan Fin Min Aso: No concerned much about global economic outlook; Important to discuss longer trading hours in Securities industry.
(JP) Japan Chief Cabinet Sec Kato: Service consumption is down in GDP but is recovering overall.
(JP) Japan Econ Min Nishimura: Expect exports to keep growing on US and China demand, latent potential for recovery in capex and consumption; Govt will act flexibly including use of reserve fund.

Korea

Kospi opened 0.0%.
(KR) Local Korean press focused on the upcoming meeting between US President Biden and S. Korea President Moon.
Markets higher by 0.5% on institutional buying.

China/Hong Kong

Hang Seng opened +0.9%; Shanghai Composite opened +0.1%.
(CN) China Govt said it will support developing countries’ appeal to waive off intellectual property rights on COVID-19 vaccines – press; Vaccine maker shares decline.
(CN) China PBOC sets Yuan reference rate: 6.4357 v 6.4307 prior.
(CN) China PBOC Open Market Operation (OMO): Injects CNY10B in 7-day reverse repos v CNY10B in 7-day reverse repos prior; Net CNY0B v Net CNY0B prior.
(CN) China PBOC considering lowering risk weight for green financial assets – Chinese press.
(CN) China National Development and Reform Commission (NDRC): Approved CNY97.3B of fixed investments in Apr; Will support private sector taking part in ownership reform, PPI may rise further in the coming months.
(CN) China Securities Regulatory Commission (CSRC) gave 9 REITs the approval to register.
(HK) Hong Kong temporarily halts operations of Taiwan trade office, effective immediately; Not related to COVID – press.

North America

(US) Fed’s Kaplan (non-voter; hawkish): See US GDP at 6.5% in 2021 and unemployment down to 4%; would be good to start discussing efficacy of Fed’s asset purchases sooner than later – virtual town hall.
AMZN Reportedly in talks to potentially acquire MGM, to further support content business – The Information.
AMZN Said to have made an $9.0B offer to acquire MGM studios – Variety.
(US) Senate votes 86-11 to open debate on bill to authorize more than $110B for basic and advanced tech research to address China competition.

Europe

(DE) According to latest INSA poll Germany conservatives lead election with 25.5%, Greens 23%; SPD 16%.

Levels as of 01:00ET

Hang Seng +0.5%; Shanghai Composite +0.8%; Kospi +0.5%; Nikkei225 +0.9%; ASX 200 +0.2%.
Equity Futures: S&P500 +0.2%; Nasdaq100 +0.2%, Dax +0.1%; FTSE100 +0.2%.
EUR 1.2160-1.2152; JPY 109.27-109.17; AUD 0.7775-0.7759; NZD 0.7220-0.7200.
Commodity Futures: Gold +0.1% at $1,869/oz; Crude Oil +0.1% at $66.36/brl; Copper +0.2% at $4.73/lb.