Aussie 10-year bond yields rise on RBA statement
|Asia Market Update: Asian indices trade mostly higher after US gains; Aussie 10-year bond yields rise on RBA statement, Oil also trades higher in Asia.
General Trend:
- Oil FUTs rise over 3% in Asia amid focus on OPEC+, Trump commented on energy markets at daily briefing
- Shanghai Composite rises over 1.5% in early trading after Monday’s holiday, sectors moving higher include IT and Industrials
- Japanese equity markets pare opening gains, marine transportation sector declines
- Australian equities lag, financials decline amid recent RBA policy decision
- China reports zero additional deaths from coronavirus (first time since data started in Jan)
- 3M: Confirmed it will import 166.5M respirators over the next three months, primarily from its manufacturing facility in China
- Japan issues breakdown of the additional JGBs that will be issued to fund stimulus measures
- Aussie 10 yr yields rise after RBA policy statement, RBA said if conditions continue to improve….it is likely that smaller and less frequent purchases of government bonds will be required.
- RBNZ adds Local Gov’t Funding Agency(LGFA) debt to QE program, said LGFA bonds play an important role in determining interest rates faced by firms and households
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.4%
- (AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH TARGET RATE UNCHANGED AT 0.25%, AS EXPECTED; If conditions continue to improve, though, it is likely that smaller and less frequent purchases of government bonds will be required
- (NZ) NEW ZEALAND Q1 BUSINESS CONFIDENCE: -70 V -21 PRIOR
- NCM.AU Affirms FY20 gold production 2.1-2.2M oz; Draws down US$600M from credit facility; Announces $20M community support fund
- (AU) Australia Mar AIG Performance of Service Index: 38.7 v 47.0 prior
- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 71.9 v 65.3 prior (largest w/w gain since moving to a weekly figure in 2008)
- (AU) Reserve Bank of Australia (RBA): Excess cash at exchange settlement (ES) accounts at A$84.8B v A$81.7B prior
- (AU) Reserve Bank of Australia (RBA) adds A$1.18B to banking system through repos v A$770M prior
- (AU) Australia sells A$1.0B v A$1.0B indicated in 1.50% June 2031 bonds, avg yield 0.8848% v 0.7874% prior, bid to cover 4.25x v 2.11x prior
- (NZ) New Zealand Fin Min: Wage subsidy payments reach NZ$6.6B, supporting 1.1M workers
- (NZ) Reserve Bank Of New Zealand (RBNZ): To extend large scale asset purchases by NZ$3.0B of Local govt debt (LGFA) to NZ$30B program, bringing total to NZ$33B; To hold first QE auction for LGFA bonds week of April 14th
- (AU) Australia Mar ANZ Job Advertisements m/m: -10.3% v +1.2% prior
- (AU) Australia Feb Trade Balance (A$): 4.4B v 3.8Be (26th consecutive surplus)
- (AU) Reserve Bank of Australia (RBA) offers to buy total of A$2.0B in bonds v A$2.0B prior
- (AU) Reserve Bank of Australia (RBA) expected to taper daily bond purchases under QE program to A$1.0B, notes concerns that the RBA could end up owning too much of the domestic bond market [vs A$2.0B on Monday's session] - AFR
Japan
- Nikkei 225 opened +1.5%
- (JP) Japan PM Abe: Fiscal spending for economic package to be ¥39T; Will not be limited by past activities
- (JP) Japan Econ Min Nishimura announces ¥16.81T Extra Budget
- (JP) Japan PM Abe: Reported emergency declaration issuance to diet committee; Wants to issue emergency declaration tonight for 7 prefectures for about 1 month
- (JP) Bank of Japan (BOJ) Q4 Survey on Households: -36.3 v -29.8 prior (lowest level since Dec 20212)
- (JP) Japan regulator to allow companies to delay filing of results due to coronavirus – press
- (JP) JAPAN FEB LABOR CASH EARNINGS Y/Y: 1.0% V 0.4%E; REAL CASH EARNINGS Y/Y: +0.5% V -0.7%E
- (JP) Japan Chief Cabinet Sec Suga: Japan not asking railway operators to reduce number of trains during state of emergency; economy facing its biggest crisis in recent years
- (JP) Japan MoF sells ¥700B v ¥700B indicated in 0.40% 30-yr JGBs, avg yield: 0.426% v 0.335% prior, bid to cover: 3.53x v 3.65x prior
Korea
- Kospi opened +1.9%
- (KR) Korea Centers for Disease Control and Prevention (KCDC): More than 50 people who recovered after contracting COVID-19 have tested positive again, but the results might have been due to the reactivation of coronavirus
- Samsung, 005930.KR Reports prelim Q1 (KRW) Op 6.4T v 6.2Te; Rev 55.0T v 55.4Te
- (KR) South Korea Feb Current Account: $6.4B v $1.0B prior; Balance of Goods (BOP): $6.6B v $1.9B prior
- (KR) Bank of Korea (BOK) provides KRW3.46T of liquidity via weekly repo operations v KRW5.25T prior
- (KR) South Korea April 6th additional coronavirus cases 47 (2nd consecutive day below 50); additional deaths 6
- (KR) Bank of Korea (BOK) $8.5B loan offer draws $4.42B in demand from banks
China/Hong Kong
- Hang Seng opened +1.5%; Shanghai Composite opened +1.6%
- (CN) China National Health Commission Coronavirus Update for April 6th: 32 additional cases (32 imported) v 39 prior; Additional deaths: 0 v 1 prior; Additional Asymptomatic cases 30 v 78 prior (1st day with no deaths)
- (CN) China PBoC Open Market Operation (OMO): Skips Reserve Repo Operations for the 4th consecutive session; Net drain CNY70B v CNY0B prior
- (CN) China PBOC sets Yuan reference rate: 7.0939 v 7.1104 prior
- (CN) China Q1 businesses defaulted on less than CNY24.0B, -30% y/y; attributed to banks supporting them due to coronavirus impact – press
- (HK) Hong Kong Chief Executive Lam: Hopes to announces 2nd round of economic relief measures soon
Other
- (PH) Philippines Economic Chief Pernia: March CPI expected to be benign will be in 2.0-2.8% central bank range, would like to see some lock down measures eased on main Luzon island
- (PH) Philippines Mar CPI Y/Y: 2.5% v 2.3%e
- (SG) Singapore Central Bank (MAS) taking measures to help financial institutions support customers, to adjust banks' capital liquidity requirements, will defer implementation of final set of Basel III reforms, do not see a need to restrict bank dividend policies
North America
- (US) House Speaker Pelosi: Tells Democrats she wants the next coronavirus aid bill to be at least $1T – Press
- (US) President Trump: China buying $40-50B of US ag products; reaches deal with 3M on masks; Allowing US drug companies to help UK PM Johnson - Daily coronavirus briefing
Europe
- (UK) PM Johnson has been admitted to ICU due to coronavirus – press
- (UK) Govt official: PM Johnson is currently receiving oxygen in the hospital but he is not on a ventilator – press
- (IT) Italy cabinet approves €200B in loan guarantees for companies – press
- (EU) EU Fin Mins to hold tele-conference today, where they are expected to agree on measures to support economy in wake of coronavirus - press
Levels as of 1:15ET
- Hang Seng +0.5%; Shanghai Composite +1.8%; Kospi +1.1%; Nikkei225 +0.8%; ASX 200 -1.5%
- Equity Futures: S&P500 -0.1%; Nasdaq100 -0.3%, Dax -0.4%; FTSE100 +0.2%
- EUR 1.0830-1.0784; JPY 109.28-108.67; AUD 0.6153-0.6076; NZD 0.5987-0.5920
- Commodity Futures: Gold +1.3% at $1,715/oz; Crude Oil +3.5% at $26.98/brl; Copper +1.9% at $2.27/lb
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