US Treasury Does Not Name Any Currency Manipulators

Apr 16 18, 07:31 GMT

General Trend:

Asian equity markets trade mixed: Shanghai and Hong Kong lag
Shanghai Composite Property Sub-index declines over 3% amid higher rates
HK property developer Country Garden [2007.HK] declines over 4%, follows press report regarding sales pressure on workers
Russian aluminum producer Rusal extends recent declines
Japan electrical appliances seller Yamada Denki drops over 7% after cutting outlook
Japanese politics remain in the headlines
US equity futures rise: Syria fallout seen as limited, according to press reports
WTI and Brent Crude Futures decline over 0.5%
US Treasury Dept. declines to name China as currency manipulator
PBoC injects liquidity amid weak M2 data, raises rate on 14-day reverse repo (in line with rate hike on 7-day maturity)
Hong Kong money market rates rise after HKMA acted last week to defend currency peg
China Q1 GDP data and Reserve Bank of Australia (RBA) minutes due for release on Tuesday’s session

Headlines/Economic Data

Japan

Nikkei 225 opened +0.3%; closed +0.2%
TOPIX Retail Trade index +1%; Securities -0.8%
(JP) In meeting on Sunday, Japan Foreign Minister Kono and China State Councillor/Foreign Min Wang agreed to improve ties – financial press
(JP) Japan PM Abe Cabinet approval rating at 31% , according to Asahi poll; Support for Abe declined to 26.7% in Nippon TV poll (lowest since taking office in 2012)
(JP) Former Japan PM Koizumi said current PM Abe may resign in June – financial press
(JP) Japan companies raised wages by avg 2.41% in 2018 (largest increase in 20-yrs) – Nikkei

Korea

Kospi opened +0.5%
South Korea not labeled currency manipulator by US Treasury
(KR) Bank of Korea (BoK) sells KRW600B in 6-month monetary stabilization bonds (MSBs): yield 1.69%
(KR) South Korea Fin Min Kim: Will seek the right way to disclose currency market intervention details; Job weakness not due to minimum wage
(KR) South Korea sells KRW1.15T in 10-year bonds v KRW1.15T indicated, avg yield 2.62% (updated)

China/Hong Kong

Hang Seng opened +0.1%, Shanghai Composite -0.2%
Hang Seng Property/Construction index -2.4%, Materials -2.4%, Industrial Goods -2%, Financials -1.9%
Gaming names weaker after China announced it would support horse racing and sports lotteries in Hainan
(CN) Analysts see China Q1 y/y GDP at 6.8% – financial press
(CN) China halted review of more than 110 companies in China applying for IPO – US financial press
(CN) China Foreign Min Wang: Talks with Japan important sign of China-Japan ties strengthening
(CN) China PBoC Open Market Operation (OMO): Injects combined CNY150B in 7-day and 14-day reverse repos v skips prior; Net: injects CNY130B v CNY0B drain prior; raises rate for 14-day to 2.70% from 2.65%
(CN) China PBoC sets yuan reference rate at 6.2884 v 6.2898 prior
(CN) China to allow foreign investors to trade Dalian iron ore futures as of Friday, May 4th – financial press
(HK) Hong Kong HK$ overnight HIBOR rises to 0.18411% from 0.10857%; 1-month rises to 0.85464% from 0.84625%
(HK) Hong Kong Fin Sec Chan: Weakness in the HK$ is not too much of a concern, as the govt has prepared early and has enough money to deal with the capital outflow; HKMA has intervened in the FX market four times as of Sunday – SCMP
(CN) China Securities Daily Op Ed sees PBOC to continue to use targeted RRR
(CN) China State Researcher: See China Q1 GDP at 6.9% – Chinese press

Australia/New Zealand

ASX 200 opened +0.2%
ASX 20 Utilities index +1.4%, Energy +0.8%, Resources +0.6%; Financials -0.2%
(NZ) New Zealand Mar Performance Service Index: 58.8 v 55.3 prior
(NZ) New Zealand Mar Food Prices m/m: +1.0% v -0.5% prior
Blue Sky, BLA.AU Cuts FY18 underlying Net A$20-25M (prior A$34-36M); Fee-earning AUM A$4.0-4.235N (prior A$4.25-4.75B); Launches independent review to enhance disclosures
(AU) RBA Dep Gov Debelle: There is strong evidence that anchoring of inflation expectations has been enhanced over the past 25 years

North America

(SY) US, UK and France launched missile strikes against Syrian chemical weapons facilities; Pentagon says the strikes successfully hit every target; Trump tweets “Mission Accomplished!”
(RU) Russian Dep Foreign Minister Ryabkov: supports counter-sanctions in response to U.S. sanctions – Russian press
(RU) Russia President Putin said further attacks by the West on Syria would bring chaos to global affairs, if such actions [Western strikes in Syria] committed in violation of the U.N. Charter continue, then it will inevitably lead to chaos in international relations.
(US) Treasury Semi-annual Currency Report: Declines to name China as currency manipulator
(US) On Saturday, US Vice President Pence said it was possible that a NAFTA deal would be reached in the next several weeks – financial press
(US) White House economic adviser Kudlow: Optimistic US and China can avoid a broader trade fight; confirms Trump wants to look at entering the TPP-11, but that it was too soon to say how long that process would take – press

Europe

(ES) Moody’ raises Spain sovereign rating by 1 notch to Baa1 from Baa2; outlook Stable
(UK) Apr Rightmove House Prices m/m: 0.4% v 1.5% prior; y/y: 1.6% v 2.1% prior
(UK) Q1 Visa Spending y/y: -1.4% v -1.3% prior (largest fall since Q4 2012)
(GE) Germany Interior Minister rejected the 6% wage increase demanded by the Verdi public sector union – German Press
(CH) SNB’s Jordan: its not the right time to change Swiss monetary policy; changes in monetary policy in other countries could give the SNB more room to maneuver
Whitbread [WTB.UK]: Elliott Advisors believes it is now Whitbread’s largest holder with more than 5% stake
WPP [WPP.UK]: CEO Sorrell steps down, effective immediately; Names current Chairman Roberto Quarta as Executive Chairman until new CEO is named; Mark Read and Andrew Scott named as joint COOs

Levels as of 02:00ET

Hang Seng -1.8%; Shanghai Composite -1.8%; Kospi +0.1%; ASX 200 +0.2%
Equity Futures: S&P500 +0.3%; Nasdaq100 +0.3%, Dax +0.3%; FTSE100 +0.1%
EUR 1.2342-1.2325; JPY 107.61-107.13; AUD 0.7783-0.7760;NZD 0.7363-0.7347
Jun Gold +0.0% at $1,348/oz; May Crude Oil -0.9%at $66.81/brl; May Copper +0.1% at $3.07/lb

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