RBA Leaves Rate On Hold

May 01 18, 06:34 GMT

General Trend:

Market participation in Asia remains limited given holidays in China, HK, South Korea, Singapore and Taiwan
Earnings in focus: Hitachi rises after guiding FY19 results higher y/y; Sony, Honda decline after issuing outlook
Australian financials ANZ Bank and ASX rise after earnings reports
US President Trump delays decision on steel and aluminum tariffs for the EU, Canada and Mexico; decision now expected by June 1st; initial market reaction limited
RBA sees 2018 and 2019 GDP growth to avg a bit above 3% v 2.4% in 2017; affirms CPI seen a bit above 2% in 2018
Little initial bond market reaction to RBA statement; traders are looking ahead to the central bank’s upcoming quarterly statement on monetary policy (Friday, May 4th)
In April, Australia’s combined capitals report first annual decline in dwelling values since late 2012, led by Sydney (Corelogic)
Japan April Manufacturing PMI revised higher; sales to overseas clients however increased at a ‘markedly slower rate’, says IHS/Markit
South Korea exports in April decline for first time since 2016, some cite difficult comparisons; exports to the US -1.8% y/y
New Zealand March building permits rise on apartment projects
New Zealand government announces a ‘Amazon tax’
Apple expected to report Q2 results after US equity close on Tuesday May 1st
US Treasury Sec Mnuchin confirms US trade delegation to hold talks in China on Thursday and Friday (May 3-4th)

Headlines/Economic Data

Japan

Nikkei 225 opened -0.1%; closed +0.2%
TOPIX Marine Transportation index +1.5%, Iron & Steel +1.3%, Real Estate +1.2%, Retail trade +0.5%; Electric Appliances -0.6%
Mega-banks trade generally lower
Start Today, [+15%], 3092.JP Reports FY17/18 Net ¥20.2B v ¥17.0B y/y, Op ¥32.7B v ¥26.3B y/y, Rev ¥98.4B v ¥76.4B y/y To buy back up to 3.21% of shares for ¥25.0B
(JP) Japan Apr Final PMI Manufacturing: 53.8 v 53.3 prelim

Korea

Kospi opened closed for holiday
(KR) North Korea nuclear test said to still be operational – Korean press
(KR) SOUTH KOREA APR TRADE BALANCE: $6.6B V $8.5BE; Exports y/y: -1.5% v 3.3%e (1st decline in 18-months); Imports y/y: +14.5% v 16.0%e
(US) Exempts South Korea, Argentina, Brazil and Australia from steel and aluminum tariffs

China/Hong Kong

Hang Seng opened closed for holiday, Shanghai Composite closed for holiday
(HK) Macau Apr Gaming Rev MOP25.7B v MOP24Be, y/y: 27.6% v 20.2%e (21st consecutive month of growth)
(US) Treasury Sec Mnuchin: US delegation to hold trade talks in China on Thursday and Friday
(HK) Hong Kong pre-owned home prices up for 2 consecutive years – SCMP
SkyBridge Capital and HNA Capital confirm mutual agreement not to pursue transaction
(CN) China Dalian Commodity Exchange (DCE) will open iron ore futures trading to foreign capital in May 4th

Australia/New Zealand

ASX 200 opened +0.1%, closed %
ASX 200 Financials index +1.4%, REIT +0.9%, Resources +0.6%, Energy +0.6%, Telecom +0.6%
(AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 1.50%; AS EXPECTED (18th straight pause in the current easing cycle)
(AU) Fitch: Australia big four banks A$1.3T mortgage books can withstand an Ireland-style correction in property prices but the lenders’ ability to deal with second-order impacts remains uncertain – AFR
ANZ.AU Reports H1 (A$) Adj Cash profit 3.49B (un-adj 2.88B) v 3.6Be; Net interest income 7.35B v 7.46B y/y
(AU) Australian Dairy Farmers lobby group has refused to back calls by the Australian Competition and Consumer Commission for a mandatory code of conduct for milk processors – AFR
CBA.AU APRA applies A$1.0B add on to minimum capital requirement
(AU) Australia Apr AIG Performance of Manufacturing Index: 58.3 v 63.1 prior
FCG.NZ Reports Mar NZ Milk collection 143M kgms, -3% y/y; Dairy exports 11.0K MT, +4% y/y
(NZ) New Zealand Mar Building Permits m/m: 14.7% v 6.4% prior
(NZ) New Zealand Government: To tax low-value goods from abroad, effective Oct 20th

Other Asia

North America

US equity markets ended lower: Dow -0.6%, S&P500 -0.8%, Nasdaq -0.8%, Russell 2000 -0.9%
S&P500 Health Care -1.5%, Industrials -1.3%
(US) Treasury Sec Mnuchin: Does not expect to see a lot of inflation

Europe

(US) President Trump to postpone steel and aluminum tariff exemption decision for EU, Canada and Mexico until June 1st; finalizes deal to exempt South Korea on steel
(UK) House of Lords votes 335-244 to restrict possibility of PM May choosing a no deal Brexit; Gives the Parliament extra powers over EU exit deal
(EU) EU responds to US announcement extending EU’s exemption from US tariffs on steel and aluminium imports to June 1st:The US decision prolongs market uncertainty, which is already affecting business decisions. The EU should be fully and permanently exempted from these measures, as they cannot be justified on the grounds of national security.

Levels as of 02:00ET

Hang Seng closed; Shanghai Composite closed; Kospi closed
Equity Futures: S&P500 +0.2%; Nasdaq100 +0.2%, Dax -0.2%; FTSE100 +0.3%
EUR 1.2084-1.2067; JPY 109.40-109.24; AUD 0.7546-0.7527;NZD 0.7041-0.7031
Jun Gold -0.5% at $1,312/oz; Jun Crude Oil +0.2% at $68.69/brl; Jul Copper -0.9% at $3.05/lb