Markets Focusing On China/US Trade Talks, Upcoming US Employment Data

May 04 18, 08:17 GMT

General Trend:

Asian equities trade generally lower, in line with US session; Japan closed for holiday
Banks in focus: HSBC and Australia’s Macquarie report better than expected earnings
China/US trade talks are continuing
Reserve Bank of Australia (RBA) sees ‘solid’ Q1 growth, notes impact of higher funding costs on banks
China April Caixin Services PMI beats ests
Philippines Central Bank Chief says closer to rate hike than before; April CPI remained above target
Malaysia exports to China declined again in March
South Korea bonds decline
South Korea said the US refuted an earlier report which said that US President Trump was said to have ordered the Pentagon to consider cutting troops in South Korea.
China Dalian iron ore futures are now open to foreign traders as of today
Next week, Japan PM Abe and China Premier Li are expected to hold a summit in Tokyo

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened flat, closed -0.5%
(AU) RESERVE BANK OF AUSTRALIA (RBA) QUARTERLY STATEMENT ON MONETARY POLICY (SOMP): RAISES DEC 2018 CORE INFLATION FORECAST BY 25BPS TO 2.00%; If the economy improves as expected, higher rates likely to be appropriate at some point.
(AU) Australia sells A$600M v A$600M indicated in 2.75% Nov 2029 bonds, avg yield 2.8181% v 2.8600% prior, bid to cover: 3.57x
(NZ) RBNZ and FMA to seek assurances that New Zealand banks are behaving ethically

China/Hong Kong

Shanghai Composite opened -0.3%, Hang Seng flat
(CN) CHINA APR CAIXIN PMI SERVICES: 52.9 V 52.3E; COMPOSITE: 52.3 V 51.8 PRIOR
(CN) US Treasury Sec Mnuchin comments from China: US and China are having very good conversation
(CN) China said to expand checks of certain US fruit imports – financial press
CN) China Banking Insurance Commission Chairman Guo Shuqing said domestic economic risks remain controllable – Chinese Press
(CN) For the week, PBoC drained a net of CNY110B in open market operations v CNY270B net drain w/w
(CN) China PBoC sets yuan reference rate: 6.3521 v 6.3732 prior
(CN) The Governor of China Hainan pledged to limit property speculation – US financial press
(HK) Hong Kong Apr PMI: 49.1 v 50.6 prior (1.5 year low)
(HK) HKMA Chan said the Hong Kong dollar (HKD) may again decline to weak end of trading band – Local Media
(HK) Hong Kong Exchange CEO: Sees substantial autumn for IPOs in Hong Kong

Japan

Nikkei closed for holiday
(JP) Japan, China and South Korea Finance leaders meeting statement: Notes risks posed by rising trade protectionism
(CN) China: Premier Li’s visit to Japan to promote bilateral ties

Korea

Kospi opened flat
Samsung Electronics resumes trading after stock split
(KR) US President Trump said to order Pentagon to consider cutting troops in South Korea – NYT
(KR) North Korea said to agree to full denuclearization by 2020 – South Korean Press [Reminder: On Apr 18th Reports circulated that the US was seeking to denuclearize North Korea by 2020]
(KR) Insurance companies in South Korea said to delay foreign investments due to rise in hedging costs – US financial press
(KR) South Korea Apr Foreign Reserves: $398.4B (record high) v $396.8B prior
(KR) South Korea Mar BoP Current Account Balance: $5.2B v $4.0B prior; BoP Goods Balance: $9.9B v $6.0B prior

Other

(PH) Philippines Apr CPI M/M: 0.5% v 0.4%e; Y/Y: 4.5% v 4.5%e
(SG) Singapore Apr PMI: 55.6 v 53.7 prior
(TW) Manufacturers of capacitors in Taiwan may raise prices following move by Aihua Group – Taiwanese Press

North America

US equity markets closed mostly lower: Dow flat, S&P500 -0.2%, Nasdaq -0.2%, Russell 2000 -0.5%
S&P500 -0.9%, Financials -0.9%
(US) White House economist Calabria: First day of talks with China have been pretty positive; -Will ask China to lower tariff rates to match US levels; has discreetly given China a list of asks
Apple [AAPL]: Buffett’s Berkshire said to have purchased 75M Apple shares in Q1 – CNBC

Europe

(UK) UK may not be able to leave customs union until 2023; Civil servants briefing ministers this week told them that the UK may take 5 years to implement the technological Irish border fix (‘max-fac’) that cabinet Brexiters favor. – UK press
(UK) UK PM May Conservative Party said to hold on to overall control of London’s Wandsworth council in local government elections – financial press
(UK) NIESR cuts UK 2018 growth forecast to 1.5% (from 1.9% prior forecast) – Telegraph
Axa [CS.FR]: Reports Q1 Rev €30.8B v €31.6B y/y

Levels as of 02:00ET

Hang Seng -0.5%; Shanghai Composite -0.1%; Kospi -0.6%
Equity Futures: S&P500 flat; Nasdaq100 -0.1%, Dax -0.1%; FTSE100 -0.3%
EUR 1.1979-1.1996 ; JPY 108.93-109.25 ; AUD 0.7526-0.7562 ;NZD 0.7021-0.7053
Jun Gold +0.1% at $1,314/oz; May Crude Oil +0.2% at $68.53/brl; May Copper +0.4% at $3.104/lb