Australia exports recover as trade deficit narrows

Asian Market Update: China, Hong Kong PMIs slow further; Australia exports recover as trade deficit narrows

 

Economic Data

- (CN) CHINA APR CAIXIN PMI SERVICES: 51.8 V 52.2 PRIOR

- (HK) HONG KONG APR COMPOSITE PMI: 45.3 V 45.5 PRIOR; 14th straight contraction; 8-month low

- (AU) AUSTRALIA MAR TRADE BALANCE (A$): -2.2B V -2.9BE; 23rd straight month of deficit ; smallest deficit in a year

- (AU) AUSTRALIA MAR RETAIL SALES M/M: 0.4% (4-month high) V 0.3%E; Q1 CORE Q/Q: 0.5% V 0.7%E

- (AU) AUSTRALIA MAR HIA NEW HOME SALES M/M: +8.9% V -5.3% PRIOR; 6-year high

- (SG) SINGAPORE APR PMI: 49.4 V 52.0 PRIOR (lowest level since Nov 2012)

- (PH) PHILIPPINES APR CPI M/M: 0.2% V 0.3%E; Y/Y: 1.1% V 1.2%E

- (TW) TAIWAN APR CPI Y/Y: 1.9% V 1.6%E; WPI Y/Y: -4.2% V -4.2%E

 

Index Snapshot (as of 04:00 GMT)

- Nikkei225 closed, S&P/ASX -0.1%, Kospi closed, Shanghai Composite -0.3%, Hang Seng -0.5%, Jun S&P500 +0.6% at 2,053

 

Commodities/Fixed Income

- June gold flat at $1,283/oz, June crude oil +1.5% at $44.72/brl, Jul copper flat at $2.18/lb

- GLD: SPDR Gold Trust ETF daily holdings rise 0.6 tonnes to 825.5 tonnes; highest since Dec 2013

- USD/CNY: *(CN) PBOC SETS YUAN MID POINT AT 6.5128 V 6.4943 PRIOR; weakest Yuan setting since Mar 28th

- (CN) PBOC to inject CNY130B in 7-day reverse repos

 

Market Focal Points/FX

- Asian equity markets are trading lower again as risk-off flows in US hours driven by disappointing ADP jobs data continued to sway sentiment in favor of the bears. Worries about the Q2 slowdown were further reflected in Atlanta Fed GDP estimate that was revised by a decimal to 1.7%, while US Treasuries were bid higher. China Caixin Services PMI also saw a downtick for April, tracking the similarly disappointing Manufacturing survey out earlier this week. Australia March retail and trade data topped expectations however, putting any further possibility of easing by the RBA into question. In FX majors, AUD/USD rose some 40pips above $0.7490 on release of those figures, NZD/USD was up nearly 30pips around $0.69, and USD/JPY was rangebound at 106.90-107.20. Yuan fix was set much weaker once again as China prepares to release its own trade figures over the weekend.

- China April Caixin Services PMI slowed to 51.8 V 52.2 prior, as Composite PMI retreated to 50.8 v 51.3 prior. Caixin said that despite the softer activity, there was a rise in new orders. Even more notably, service firms raised their staff numbers after last month's decline to address rising backlog. Input costs also continued to rise, though rate of change in inflation was only marginal. Markit economist said that despite the mixed results, govts need to "keep implementing moderate stimulus to prevent a hard landing of the economy." On that note, former PBoC advisor Yu Yongding echoed those remarks, calling for govt to implement more fiscal stimulus to avoid a hard landing. Elsewhere, Hong Kong PMI hit an 8-month low amid further job shedding, falls in purchasing activity and decline stocks of inputs.

- Latest set of retail and trade data out of Australia may justify RBA standing pat, even as expectations of further easing have ramped up since the surprise rate cut this week. Terms of trade were in deficit for the 23rd straight month, but that deficit was smallest in a year. Exports rose 4% after last month's 1% drop, as shipments to China hit a 4-month high. Exports of iron ore were also at a 5-month high, while gold shipments spiked up to a 5-year high. March retail sales hit a 4-month high, driven by strength in Clothing/footwear/accessories category. Rio Tinto held its annual shareholder meeting, affirming plans to reduce operating costs by $2B over next 2 years and forecasting FY16 dividend of no less than $1.10/shr. Rio Tinto CEO said he was encouraged by strength of Australian economy, as mining volumes are still increasing.

 

Equities

US equities/ADRs:

- SYNC: AT&T agrees to new deal with Synacor to manage web portal, Unwinding long-time alliance with Yahoo; +134% afterhours

- KHC: Reports Q1 $0.73 v $0.61e, R$6.57B v $6.54Be; +5.6% afterhours

- KND: Reports Q1 $0.35 v $0.21e, R$1.84B v $1.84Be; +3.4% afterhours

- CF Reports Q1 $0.40 v $0.51e, R$1.0B v $815Me; +2.8% afterhours

- TSLA: Reports Q1 -$0.57 v -$0.54e, R$1.60B v $1.59Be; Move forward target to achieve 500K unit production by 2 years to 2018; +2.7% afterhours

- CB: Reports Q1 $2.26 v $2.19e, net premiums written $5.48B v $3,59BB y/y; +1.9% afterhours

- WFM: Reports Q2 $0.44 v $0.41e, R$3.70B v $3.74Be; +1.2% afterhours

- RIG: Reports Q1 $0.69 v $0.26e, R$1.34B v $1.10Be; +0.9% afterhours

- TSO: Reports Q1 $1.19 adj v $1.04e, R$5.10B v $3.59Be; +0.3% afterhours

- ALL: Reports Q1 $0.84 v $0.75e, R$8.87B v $8.04Be; +0.1% afterhours

- FOXA: Reports Q3 $0.47 v $0.46e, R$7.23B v $7.18Be; -0.7% afterhours

- OME: Completes Previously Announced Strategic Review; Adds $40M to buyback plan (9.4% of market cap); -1.4% afterhours

- PRU: Reports Q1 $2.18 v $2.38e, R$11.3B v $11.8B y/y; -2.1% afterhours

- MET: Reports Q1 $1.20 v $1.39e, R$16.6B v $17.1Be; -2.1% afterhours

- CTL: Reports Q1 $0.71 v $0.68e, Op Rev $4.4B v $4.43Be; -4.7% afterhours

- FIT: Reports Q1 $0.10 v $0.04e, R$505.4M v $444Me; Guides Q2 $0.08-0.11 v $0.27e, -12.9% afterhours

Notable movers by sector:

- Consumer discretionary: SA SA International Holdings 178.HK +1.7% (profit warning); Super Retail Group SUL.AU +7.2% (guidance)

- Financials: China Vanke Co 2202.HK -1.8% (Apr result); National Australia Bank NAB.AU +2.7% (H1 result); Scentre Group SCG.AU -0.1% (Q1 result)

- Materials: Glencore Xstrata 805.HK -7.5% (Q1 result); OceanaGold Corp OGC.AU -2.5% (guidance); Rio Tinto RIO.AU -0.4% (reaffirms capex guidance, to cut additional op costs - AGM)