Copper spikes after a powerful

Asian Market Update: China property names rally after reports of potential easing of curbs; Copper spikes after a powerful and shallow 8.2 earthquake off Chile

Economic Data

- (AU) AUSTRALIA FEB BUILDING APPROVALS M/M: -5.0% (largest decline in 8-months) V -2.0%E; Y/Y: 23.2% V 27.9%E

- (AU) AUSTRALIA FEB JOB VACANCIES: +2.6% V -1.7% PRIOR

- (JP) JAPAN MAR MONETARY BASE Y/Y: 54.8% V 55.7% PRIOR; MONETARY BASE END OF PERIOD: ¥219.9T V ¥204.8T PRIOR

- (NZ) NEW ZEALAND MAR ANZ COMMODITY PRICE M/M: -0.1% (first decline in 4 month) V +0.9% PRIOR

Market Snapshot (as of 03:30 GMT):

- Nikkei225 +1.5%, S&P/ASX +0.1%, Kospi +0.2%, Shanghai Composite +0.5%, Hang Seng +0.3%, Jun S&P500 +0.2% at 1,880, Jun gold +0.2% at $1,282, May crude oil flat at $99.75/brl

Highlights/Observations/Insights

- Chinese property sector saw some relief following a report from Shanghai Securities News indicating the govt in some of the lower tier cities - more vulnerable to a housing downturn - are considering easing some of the curbs. Specifically, the city of Changsha in Hunan Province and Hangzhou in Zhejiang Province officials are said to have deemed the curbs in place to achieve their desired effect. Furthermore, press source goes on to say that there is "no doubt" the govt will ease home buying curbs in tier-2 and tier-3 cities. Note that earlier today, China Index Academy report on property price trends in March saw sequential gains slow for the 3rd consecutive month to 0.38% m/m to CNY11.0K/sqm v 0.54% rise in February.

- Northern areas of Chile have ordered mass evacuations after a massive 8.2 magnitude earthquake that struck 60 miles offshore at a shallow depth of just 12.5 miles. Initial reports suggested 5 fatalities and large landslides disrupting road and highway travel. Several mining names said their facilities were too far away to be effected, however Codelco - the state-owned copper company - evacuated employees at its Ventanas site. May copper spiked over 1% above $3.07 on possibility of mining disruptions in the world's top copper producing country. Aftershocks of heightened seismic activity in the Pacific were also felt as far as New Zealand, where NZD/USD fell some 50pips below $0.8590.

- Tokyo markets got a boost from strong economic data in the US session, with rising treasury yields translating into stronger dollar/weaker yen and subsequently higher equity prices. USD/JPY hit 9-week highs above 103.90, while Nikkei225 breached the psychological 15,000 mark - also its 3-week high. BOJ March Tankan survey revealed diminishing expectations of the economy being able to achieve the 2% inflation target, noting that firms of all sizes see CPI at 1.5% in 1 year and just 1.7% in five years. This follows overnight disappointing manufacturing Tankan for Q1, which prompted economists at Nomura to forecast more BOJ policy easing in July.

- Australia reported a large drop in building permits which could potentially soothe some of the recent RBA concern regarding the overheating property market. Note however that this is typically a fairly volatile data series. Moreover, JPMorgan economists suggested that despite today's drop in the headline figure, there is still a clear uptrend in single family dwellings. AUD/USD fell about 15pips toward $0.9220 on the release.

Fixed Income/Commodities/Currencies

- (JP) BOJ offers to buy ¥250B in 1-3 yr JGB, ¥250B in 3-5 yr JGB, and ¥400B in JGBs with maturities of 5-10 yrs

- (AU) Australia MoF (AOFM) sells A$700M in 2033 Bonds, avg yield 4.71%, bid-to-cover 4.85x

- (US) API PETROLEUM INVENTORIES: CRUDE: -5.8M (first draw in 6 weeks; Largest draw since Jan 7th) v +1Me

- (CN) China MoF sells CNY28B in 7-year Bonds at average yield of 4.33%

- GLD: SPDR Gold Trust ETF daily holdings fall 2.1 tonnes to 811.0 tonnes (lowest since Mar 7th; 2nd consecutive decline)

Equities

US markets:

- APOL: Reports Q2 $0.28 v $0.18e, R$679.1M v $688Me; -6.0% afterhours

- MNKD: FDA advisory panel votes in favor of Afrezza inhaled drug as a treatment for Type 1 diabetes; Follow up: FDA Advisory Committee recommends approval of AFREZZ, MannKind Corporation's Investigational Drug to Treat Diabetes; +110.5% afterhours

Notable movers by sector:

- Financials: China Vanke 000002.CN +3.1%, Poly Real Estate Group 600048.CN +6.0%, Huayuan Property 600743.CN +10.2% (some cities in China discuss to ease home purchase curbs)

- Materials: Anhui Conch Cement 600585.CN +2.8%, Jiangxi Wannianqing Cement 000789.CN +2.2% (rise in profitability in China cement industry); Zhejiang Furun 600070.CN +4.4% (FY13 results)

- Industrials: Chengdu Road & Bridge Engineering 002628.CN +3.3% (awarded contract); Fong's Industries 641.HK +23.3% (enters JV to redevelop land); GrainCorp GNC.AU +1.9% (ADM may increase stake); Toyota Motor Corp 7203.JP +1.5% (Mar China vehicle results; comments from Nomura)

- Technology: Renesas Electronics Corp 6723.JP +9.8% (speculation on Apple's bid in LCD unit); Han's Laser Technology 002008.CN +3.4% (awarded order from Apple); Liaoning Julong Financial Equipment 300202.CN +2.0% (FY13 results); Shenzhen O-film Tech 002456.CN +4.0% (to develop fingerprint technology)