Equities Quiet With HK And SK Closed On Holiday

May 22 18, 06:24 GMT

General Trend:

Asian equity markets trade generally lower amid holidays (South Korea and Hong Kong) and lack of economic data
Shanghai Property index declines by over 1.5%
Baby-related Chinese stocks trade higher: China said to consider ending birth limits
North America-focused building materials firm James Hardie rises after Q4 earnings
US and China said to reach ‘outline’ of agreement related to telecom ZTE
PBoC continues to fix yuan (CNY) below market expectations
Bank of Japan (BoJ) Gov Kuroda said low rates can both weigh on and boost consumption, sees Japan’s natural rate of interest likely around 0%
Indonesia Rupiah (IDR) and Malaysia Ringgit (MYR) gain after decline in US Treasury yields
Still, Indonesia 10-year bond yields continue to move higher

Headlines/Economic Data

Japan

Nikkei 225 opened +0.1%; closed -0.2%
TOPIX Retail Trade index -0.5%, Iron & Steel -0.4%, Securities -0.4%
(JP) Japan Council on Economic and Fiscal Policy: sees social spending ballooning to 60% by 2040 – Nikkei
Sony, 6758.JP Announces FY2018-2020 Medium- Term Plan: Targets at least 10% ROE
(JP) BoJ Gov Kuroda: Reiterates domestic economy expanding moderately; No particular limit in expanding monetary base – parliament
Softbank, 9984.JP Said to have reached an agreement to sell its 21% stake in Flipkart to Walmart; no terms disclosed – India press
(JP) BoJ Dep Gov Wakatabe: Can meet price target with current policy; may need to shift policy if changes in economic conditions make current policy inappropriate
(JP) Japan MoF sells ¥1.0T v ¥1.0T indicated in 0.5% (prior 0.50%) 20-yr bonds; avg yield 0.5320% v 0.5000% prior; bid to cover 4.12x v 3.69x prior

Korea

Kospi closed
Hyundai Motors, 005380.KR Retracted its spinoff merger plan for Hyundai Mobis and Hyundai Glovis on Monday due to negative market and shareholder view – Korean press

China/Hong Kong

Hang Seng closed, Shanghai Composite -0.1%
(CN) Former PBoC Gov Zhou Xiaochuan said over the weekend to keep a close eye on what will happen next if the US 10-year Treasury yields continue to rise and the dollar strength ‘wanes’ – Chinese Press
(CN) China PBoC sets yuan reference rate at 6.3799 v 6.3852 prior
(CN) China PBoC Open Market Operation (OMO): Injects CNY100B in 7-day and 14-day reverse repos v skips prior; Net: CNY0B injection v CNY0B injection prior
(CN) Former China State Administration of Foreign Exchange (SAFE) official Guan Tao reiterated yuan currency (CNY) expected to follow ‘two-way’ fluctuation path in 2018 – Chinese Press
(CN) Experts say China’s foreign exchange reserves may decline further amid capital outflows pressure, stronger US dollar and Fed rate hike – China Daily
763.HK US and China govts said to have reached a broad outline to settle ZTE issue, including listing export ban – US financial press

Australia/New Zealand

ASX 200 opened 0.0%, closed -0.8%
ASX 200 Telecom index -2%, Financials -0.9%, Utilities -0.7%
Ht&e, HT1.AU APN made ~A$500M offer for Adshel
James Hardie, [+2%], JHX.AU Reports FY17 Net $146.1M v $276M y/y; Rev $2.05B v $1.92B y/y
(AU) Australia sells A$150M v A$150M indicated in Nov 2027 indexed bonds, avg yield 0.8822%, bid to cover 3.2x

Other Asia

North America

US equity markets ended higher: Dow +1.2%, S&P500 +0.7%, Nasdaq +0.5%, Russell 2000 +0.7%
S&P500 Industrials +1.5%, Energy +1%, Real Estate +1%
(US) Fed’s Kashkari (non-voter, dove): Wage growth hasn’t picked up; may still be slack in labor market

Europe

(DE) Germany May Finance Ministry Monthly Report: Domestic economy is in strong upturn, even if special factors meant growth in Q1 was less dynamic than in late 2017
(IT) Italy Five-Star and League nominate Giuseppe Conte as prime minister – FT

Levels as of 02:00ET

Hang Seng +0.6%; Shanghai Composite -0.5%; Kospi +0.2%
Equity Futures: S&P500 +0.1%; Nasdaq100 +0.0%, Dax +0.5%; FTSE100 -0.1%
EUR 1.1797-1.1773; JPY 111.05-110.84; AUD 0.7593-0.7573;NZD 0.6958-0.6941
Jun Gold -0.1% at $1,289/oz; Jul Crude Oil +0.3% at $72.56/brl; Jul Copper -0.3% at $3.09/lb