Analysis

Hang Seng supported by earnings from Alibaba and Baidu

Asia Market Update: USD trades generally weaker ahead of upcoming US data; Asian equity markets rise; Hang Seng supported by earnings from Alibaba and Baidu.

General trend

- 2-yr UST yield extends drop ahead of US data.

- Hang Seng TECH index opened higher by over 4% on earnings.

- US equity FUTs trade slightly lower.

- Bank of Japan (BOJ) Gov Kuroda: Unless energy prices drop sharply, core CPI likely to remain ~2.0% for ~1-year.

- Japan PM Kishida: Steps to avoid outflows from Japan such as renewable energy promotion, inbound tourism, will help stabilize fx moves.

- Companies due to report during the NY morning include Big Lots, Hibbett, Pinduoduo.

Headlines/Economic data

Australia/New Zealand

- ASX 200 opened flat.

- (AU) ANZ Senior economist expects Australia Fair Work Commission to announce a 4.0-4.5% in the minimum wage.

- (AU) Australia sells A$800M v A$800M indicated in 1.50% Jun 2031 bonds; Avg Yield: 3.2244%; bid-to-cover 3.42x.

- (AU) Australia Apr Retail Sales M/M: 0.9% v 1.0%e.

- (NZ) Reserve Bank of New Zealand (RBNZ): Additional NZ$300M lent under Funding for Lending Program; total lending under the program at NZ$10.5B.

Japan

- Nikkei 225 opened +1.3%.

- (JP) Japan May Tokyo CPI Y/Y: 2.4% V 2.5%E; CPI (EX-FRESH FOOD) Y/Y: 1.9% V 2.0%E.

- (JP) Japan PM Kishida: Steps to avoid outflows from Japan such as renewable energy promotion, inbound tourism, will help stabilize fx moves.

- SONY President: Expects global shipment delays and shortage of chips to continue this financial year; To expand smartphone sensor fabrication in Nagasaki plant.

- (JP) Said that the Japan Govt will look into steps to take on the tight energy market - Press.

- (JP) Bank of Japan (BOJ) Gov Kuroda: Unless energy prices drop sharply, core CPI likely to remain ~2.0% for ~1-year.

- (JP) Japan Fin Min Suzuki: Important to secure a necessary defense budget; Funding for a decarbonized society is key.

- (JP) Bank of Japan (BOJ) offers to buy 5-10 year JGBs at fixed rate of 25bps; Opens window to buy unlimited amount of 10-year JGBs at 0.25% [as expected].

- (JP) Japan Chief Cabinet Sec Matsuno: Will appropriately consider any further border reopening.

Korea

- Kospi opened +1.1%.

- Samsung [005930.KR] To reduce smartphone production due to weak demand; may cut 2022 smartphone output target by 10% - Korea press.

China/Hong Kong

- Hang Seng opened +2.6%; Shanghai Composite opened +0.4%.

- (CN) China Apr YTD Industrial Profits Y/Y: 3.5% v 8.5% prior.

- (CN) SCMP: Recent speech from China Premier Li shows a clear urgency to gov't efforts to avoid recession, cites analysts.

- (CN) China PBOC Open Market Operation (OMO): Sells CNY10B in 7-day reverse repos v CNY10B prior; Net CNY0B v Net CNY0B prior.

- (CN) China PBOC sets Yuan reference rate: 6.7387 v 6.6550 prior.

- (CN) Sec of State Blinken: Under President Xi China has become more repressive at home; US is determined to avoid a new Cold War; US will respond positively if China takes concrete action on concerns.

- (CN) China Ministry of Finance (MOF) Sells 3-month bills: avg yield 1.4003% v 1.7419% prior.

- (CN) Shanghai first 3-weeks of May power use >78% y/y.

Other

- (SL) Sri Lanka said to be in talks for a few hundred million dollar loan from China - FT.

North America

- TSLA CEO Musk: Possible economic downturn is actually a good thing.

- (US) Supreme Court allows Biden Admin to use new cost estimate for impact of greenhouse gases when issuing regulations.

- (US) NY Fed takes $2.01T in RRP program at 0.80%; 95 participating and accepted counterparties.

Europe

- (UR) US is said to be readying to send Ukraine advanced, long-range rocket systems that are now top request from Ukrainian officials - CNN.

- (UR) Ukraine Foreign Min Kuleba: Military situation in eastern Ukraine is even worse than people say it is.

- (UK) Chancellor of the Exchequer (Fin Min) Sunak outlines details of support package and windfall tax on energy company profits.

Levels as of 01:20 ET

- Nikkei 225, +0.6%, ASX 200 +1.1% , Hang Seng +2.6%; Shanghai Composite +0.5% ; Kospi +1%.

- Equity S&P500 Futures: -0.1%; Nasdaq100 -0.1%, Dax +0.1%; FTSE100 -0.3%.

- EUR 1.0765-1.0716 ; JPY 127.24-126.67 ; AUD 0.7145-0.7084 ;NZD 0.6524-0.6467.

- Gold +0.2% at $1,851/oz; Crude Oil +0.1% at $114.19/brl; Copper +0.4% at $4.2905/lb.

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