General Trend:

  • Another mixed trading session for Asia, despite US gains
  • Nikkei outperforms as Trump and Abe meet; Fast Retailing and Softbank rise
  • Australia’s Rio Tinto rises over 1%; affirmed iron ore shipment forecast, to revise aluminum guidance
  • Asian chipmakers track US gains; Nanya Technology said to see DRAM supply constraints until Q3
  • Shanghai Composite has swung between gains and losses, despite targeted RRR cut by PBoC; Banks gain, while automakers underperform
  • China govt said to allow foreign auto companies to set up more than two ventures
  • Large bad bank China Huarong Asset Management placed on trading halt amid government probe
  • Chinese bond yields decline after PBoC RRR cut
  • Hong Kong 3-month money market rate rises amid continued currency interventions by the HKMA
  • China March new home prices rise at slowest pace since 2016
  • Japan March Trade surplus above ests, imports have first decline since 2016; Exports to the US slow
  • AUD/NZD in focus as New Zealand Q1 CPI and Australia March Employment data due for release on Thursday
  • Taiwan Semi expected to report earnings tomorrow

Headlines/Economic Data

Japan

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  • Nikkei 225 opened +0.4%; closed +1.4%
  • TOPIX Real Estate index +2%, Information/Communications +1.7%, Electrical Appliances +1.4%, Retail Trade +1.3%, Securities +0.9%, Iron & Steel +0.7%
  • (JP) Opposition party members call for resignation of Japan Finance Min Aso amid political scandals – Japanese Press
  • (JP) JAPAN MAR TRADE BALANCE: ¥797.3B V ¥449BE; ADJ TRADE BALANCE: ¥119.2B V ¥104BE
  • (CN) China and Japan to cooperate in relation to services, technology innovation and tourism sectors
  • Suruga Bank, [-16%], 8358.JP Japanese Press reports the firm said to have given out loans based on false documents

Korea

  • Kospi opened +0.6%
  • (KR) IMF affirms South Korea 2018 GDP outlook of 3%, 2019 at 2.9%
  • (US) President Trump: Have been speaking directly with North Korea leader Kim
  • (US) The then US CIA Director Pompeo said to have met with North Korea leader Kim during visit to North Korea over Easter – Washington Post
  • (KR) Bank of Korea (BOK) sells KRW2.9T in 2-yr Monetary Stabilization Bonds (MSB) at 2.105%
  • Posco, 005490.KR CEO Kwon said to offer to resign early, he said company needs a new, young leader, but he will remain CEO until a replacement is found – South Korean press
  • (KR) South Korea Q1 long term unemployment reaches 18-yr high – Korean press

China/Hong Kong

  • Hang Seng opened +0.1%, Shanghai Composite +0.8%
  • Hang Seng Energy index +1.3%, Financials +0.7%, Services +0.7%, Property/Construction +0.4% ; Consumer Goods -1.5%, Industrial goods -0.9%
  • Shanghai Property sub-index trades flat
  • (CN) CHINA PBOC CUTS RESERVE RESERVE RATIO (RRR) BY 100BPS FOR QUALIFIED BANKS (targeted cut); effective Apr 25th (after the close)
  • (HK) Hong Kong Monetary Authority (HKMA): buys HK$5.1B to defend currency peg
  • (CN) China bond yields move lower after PBoC RRR cut: 1-year swap rate declines over 10bps, China Development Bank 10-year yield declines over 15bps
  • (CN) China PBoC Open Market Operation (OMO): Injects CNY150B in 7-day reverse repos v skips prior; Net: injects CNY150B
  • (CN) China PBoC sets yuan reference rate at 6.2817 v 6.2771 prior
  • (CN) China Feb Avg New Home Prices M/M: 0.4% v +0.3% prior; Y/Y: 4.9% v 5.2% prior
  • (CN) China NDRC: Expects 2018 consumer price inflation to be mild, producer price inflation to ease
  • China Huarong Asset Management, 2799.HK Chairman being investigated by Central Commission for Discipline Inspection (CCDI) for possible serious disciplinary violations, no further details given

Australia/New Zealand

  • ASX 200 opened +0.1%
  • ASX 200 Consumer Discretionary index +1.6%, Energy +1.4%, Resources +1.2%, REIT +0.9%; Telecom -0.8%, Financials -0.2%
  • Rio Tinto, RIO.AU Reports Q1 Pilbara iron ore shipments 80.3Mt v 80.5Mte; Pilbara iron production 83.1Mt v 77.2Mt y/y
  • Woodside Petroleum, WPL.AU Reports Q1 Rev $1.17B v $902.4M y/y; Production 22.2MMBOE v 21.4 y/y
  • (AU) Australia Mar Westpac Leading Index m/m: -0.2% v 0.4% prior
  • (AU) Australia sells A$600M v A$600M indicated in 3.00% March 2047 bonds, avg yield 3.3628% v 3.4359% prior, bid to cover 3.0x v 2.53x prior
  • (AU) Australia Mar Skilled Vacancies m/m: 0.9% v 1.2% prior

North America

  • US equities end higher: Dow +0.9%, S&P500 +1.1%, Nasdaq +1.7%, Russell 2000 +1.1%
  • S&P500 Technology +1.9%, Consumer Discretionary +1.9%
  • VMware [VMW]: Carl Icahn said to acquire less than 5% stake – US financial media
  • LUV Follow Up: NTSB Chairman: The company to perform additional inspections on fleet
  • IBM [IBM] declines over 5% in the afterhours amid FY18 earnings guidance
  • (US) Fed’s Bostic (FOMC voter, dove): Businesses are confused by direction of US trade policy; hearing about labor shortages everywhere
  • (US) Fed’s Williams (moderate, voter): sees US economy continuing to improve; A reassessment of low 10-year yields poses risks
  • During Asian session, US 2-year Treasury yield hit 2.4000% (highest since Sept 2008)
  • (US) Weekly API Oil Inventories: Crude: -1M v +1.8M prior
  • Looking Ahead: Bank of Canada rate decision expected later today

Europe

  • (DE) German Chancellor Merkel wants to strengthen role of economic ministers in EU – German press
  • Looking Ahead: UK March CPI data due later today

Levels as of 02:00ET

  • Hang Seng +0.9%; Shanghai Composite +0.7%; Kospi +0.9%; ASX 200 +0.3%
  • Equity Futures: S&P500 +0.3%; Nasdaq100 +0.3%, Dax +0.3%; FTSE100 +0.1%
  • EUR 1.2382-1.2365; JPY 107.38-107.00; AUD 0.7773-0.7759;NZD 0.7344-0.7328
  • Jun Gold -0.3% at $1,345/oz; May Crude Oil +0.9% at $67.11/brl; May Copper +0.2% at $3.09/lb
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