General Trend:

  • Asian equities trade generally higher
  • Energy shares outperform, track gains in oil prices
  • Toyota rises over 1.5% after earnings report and guidance
  • Softbank declines over 2% post earnings
  • China CPI eases again, while PPI accelerates
  • RBNZ reiterates policy to remain expansionary for considerable period of time; Kiwi declines to 5-month low
  • BoJ Gov Kuroda seeks to clarify stance on timing of reaching inflation target
  • Malaysia opposition party wins election, new PM to get sworn in tomorrow, regional leaders paying close attention
  • Malaysia Ringgit currency forwards decline after surprise election results
  • Philippines Central Bank is expected to later today raise rates for the first time since 2014
  • Israel confirmed Iranian forces in Syria fired rockets in Golan

Headlines/Economic Data

Japan

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  • Nikkei 225 opened +0.3%; closed +0.4%
  • (JP) Japan Investors Net Buying of Foreign Bonds: -¥363.7B v +¥533.6B prior week; Foreign Net Buying of Japan Stocks: -¥0.3B v +¥283.5B prior week
  • (JP) Japan Apr Bank Lending Ex-Trusts y/y: 2.1% v 1.9%e; Including-Trusts y/y: 2.0% v 1.9%e
  • (JP) Japan Mar Current Account Balance: ¥3.12T v ¥2.89Te; adj Current Account: ¥1.77T v ¥1.63Te
  • (JP) Bank of Japan (BoJ) Summary of Opinions for April 26-27 policy meeting: Worried that dropping phrase on timing for hitting price goal could weaken commitment to hitting price goal; If BoJ hikes rates that will hurt corporate profits via Yen rise, hurt financial institutions by increasing credit costs.
  • FujiFilm, 4901.JP Says has not received new proposal from Xerox: If we receive new proposal will need to study whether it offers value to shareholders
  • (JP) Bank of Japan (BOJ) Gov Kuroda: Reiterates to continue powerful monetary easing; do not set any deadline for hitting price target
  • (JP) Japan MoF sells ¥399.6B v ¥400B indicated in 10-yr 0.1% inflation-indexed bonds; avg yield -0.513%; bid to cover 4.02x v 3.38x prior

Korea

  • Kospi opened +0.6%
  • (KR) South Korea March Tax Rev KRW28.9T v KRW23.6T m/m
  • (US) Trump administration officials reportedly preparing to hold Pres Trump-Leader Kim Jong Un summit in Singapore – CNN
  • (KR) North Korea govt: had satisfactory consensus on issues discussed with US Sec State Pompeo
  • 005930.KR South Korea Antitrust Chief: Current ownership structure of Samsung Group is not sustainable

China/Hong Kong

  • Hang Seng opened +0.6%, Shanghai Composite +0.3%
  • (CN) China Ministry urges local cities to maintain property curbs – Xinhua
  • (CN) China, Japan and South Korea agree to oppose protectionism – Xinhua
  • (CN) CHINA APR CPI M/M: -0.2% V -0.1%E; Y/Y: 1.8% V 1.9%E; PPI Y/Y: 3.4% V 3.4%E (first acceleration in 7-months)
  • (CN) China is expected to offer to import more US goods during talks due to be held in Washington next week – US financial press
  • (CN) China PBoC sets yuan reference rate: 6.3768 v 6.3733 prior
  • (CN) China PBoC Open Market Operation (OMO): Injects combined CNY30B in 7-day and 14-day reverse repos v CNY100B prior; Net drain CNY20B v CNY100B prior
  • (CN) China credit spreads hit their widest level in nearly 2-yrs this week following new regulations that undermined long-held assumptions about implicit guarantees on debt linked to local govts – FT
  • (CN) China Commerce Ministry (MOFCOM): Confirms US and China trade teams keep communication; reiterates China trade to maintain good momentum in 2018
  • (CN) China PBoC Gov Yi Gang met with BoJ Gov Kuroda: Confirms the officials reached a consensus on currency swap in principle

Australia/New Zealand

  • ASX 200 opened +0.2%, closed %
  • (NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE UNCHANGED AT 1.75%; To keep OCR at this expansionary level of 1.75% for a considerable period of time
  • (NZ) RBNZ Gov Orr: Were in a good spot, risks are balanced; reiterates argument for a rate cut or rise in the future, but rates will stay unchanged for a considerable amount of time; Currency is broadly in line with terms of trade – post rate decision press conference
  • (NZ) New Zealand Fin Min Robertson: Planning NZ$42B of net capital investments over 5-yrs
  • (AU) Western Australia: To raise surcharge on foreign property purchases to 7%
  • (NZ) RBNZ Bascand: Core inflation a bit below where we’d like it

Other Asia

  • (MY) According to Malaysia Election Commission, opposition Mahathir alliance won 115 seats, above the 112 seat threshold needed to form a government – Local Press
  • (PH) Philippines Q1 GDP q/q: 1.5% v 1.4%e; y/y: 6.8% v 6.8%e
  • (PH) Philippines Economic Chief Pernia: GDP could reach target if it werent for CPI; lower end of 7-8% GDP growth range for 2018 is doable

North America

  • US equity markets ended mostly higher: Dow +0.1%, S&P500 +0.2%, Nasdaq +0.1%, Russell 2000 -0.1%
  • S&P500 Energy +2%, Financials +1.5%; Utilities -0.7%
  • COST Reports Apr SSS (ex-gas) 7.3%; US SSS (ex-gas) 7.9% v 6.6%e
  • EVHC KKR said to plan bid for Envision which may be worth over $11.0B – NY Post
  • (US) DOE CRUDE: -2.2M V 0E; GASOLINE: -2.2M V -0.5ME

Europe

  • (UK) Apr RICS House Price Balance: -8% v -1%e (lowest reading since Nov 2012)
  • (UK) Ministers reportedly have been warned that Brexit would hurt 145K UK companies and wipe 1.8% off long run UK GDP – Buzzfeed
  • (EU) ECB’s Lane (Ireland): too soon to tell whether demand slowdown is hitting European economy
  • (FR) France Pres Macron: imbalances in the euro zone are not sustainable; The German trade surplus can’t last – German TV interview
  • (IL) Iran force in Syria said to have fired rockets at Israeli targets in Golan – Israeli Media
  • (IQ) Iraq Oil Min Luaibi: OPEC to discuss possible output shortfall following US withdrawal from Iran nuclear agreement
  • RBS [RBS.UK]: US Attorney’s Office: Reached agreement in principle to settle potential civil claims related to MBS issued from 2005-2008; RBS to pay $4.9B civil penalty
  • EDF [EDF.FR]: Reports Q1 Rev €20.4B v €19.7B y/y; Affirms FY18 EBITDA €14.6-15.3B (prior €14.6-15.3B), Net debt/EBITDA <=2.7x (prior <=2.7x)
  • ENEL [ENEL.IT]: Reports Q1 net €1.17B v €0.98B y/y, adj EBITDA €3.91B v €3.95Be, Rev €19B v €19.4B y/y; Affirms FY18 Net €4.1B, EBITDA €16.2B (prior Net €4.1B, EBITDA €16.2B)

Levels as of 02:00ET

  • Hang Seng +0.7%; Shanghai Composite +0.1%; Kospi +0.6%
  • Equity Futures: S&P500 +0.2%; Nasdaq100 +0.3%, Dax +0.1%; FTSE100 -0.0%
  • EUR 1.1875-1.1843; JPY 109.92-109.63; AUD 0.7478-0.7454;NZD 0.6946-0.6910
  • Jun Gold +0.1% at $1,314/oz; Jun Crude Oil +0.7% at $71.61/brl; Jul Copper +0.2% at $3.07/lb
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