Economic Data



- (AU) AUSTRALIA APR TD SECURITIES INFLATION M/M: 0.1% V 0.0% PRIOR; Y/Y: 1.5% (10-month low) V 1.7% PRIOR

- (AU) AUSTRALIA APR AIG MANUFACTURING INDEX: 53.4 V 58.1 PRIOR; 3-month low; 10th month of expansion

- (AU) Australia Apr Corelogic RPData House Prices M/M: 1.7% v 0.2% prior


- (KR) SOUTH KOREA APR PMI MANUFACTURING: 50.0 V 49.5 PRIOR; first time out of contraction in 4 months



- (HK) Macau Apr Casino Rev y/y: -9.5% v -13.5%e v -16.3% prior; 23rd consecutive decline


Index Snapshot (as of 03:30 GMT)

- Nikkei225 -3.6%, S&P/ASX -0.7%, Kospi -0.7%, Shanghai Composite closed, Hang Seng closed, Jun S&P500 -0.1% at 2,057


Commodities/Fixed Income

- June gold +0.4% at $1,295/oz, June crude oil -0.7% at $45.58/brl, Jul copper -0.3% at $2.28/lb

- SLV: iShares Silver Trust ETF daily holdings rise to 10,482 tonnes from 10,437 tonnes prior; Highest since Dec 2014

- IEA Chief Economist Birol: Oil prices may have bottomed, but it depends on global growth - financial press

- (IQ) Iraq declares State of Emergency as supporters of supporters of Shiite Muslim cleric Moqtada al-Sadr breached the Green Zone which houses the country's Parliament, govt ministries, and foreign embassies - financial press

- (JP) BOJ offers to buy ¥70B in JGBs with maturity less than 1-yr, ¥160B in JGBs with maturity over 25-yr, and ¥2.0T in T-bills


Market Focal Points/FX

- Asian equity markets are generally in the red, though volumes are light with mainland China, Hong Kong, Taiwan, and Singapore closed for holiday. Nikkei225 is leading the declines with a catch-up slump, since Tokyo trade was closed on Friday. USD/JPY continued to crater to fresh 18-month lows, falling below ¥106.20 and further pressuring Japan exporters. Nikkei225 futures contract is now down 8.5% from the levels just before the BOJ shocked the markets with a rate hold late last week. In other majors, AUD/USD traded in a 25pip range above 0.76 and NZD/USD rose about 50pips to $0.7020 before retreating to 0.6990. Weaker USD also helped support cable, with GBP/USD sustaining its near 1-month long uptrend above 1.46.

- China official PMIs were a mixed bag - both were down slightly from March levels but remained in expansion. Among key manufacturing components, new export orders matched the headline with 50.1 v 50.2 m/m, employment continued to dive at 47.8 v 48.1 m/m, but input prices hit multi-month highs of 57.6 v 55.3 m/m. In another positive sign for commodities, inventories of raw materials fell to a 5-month low of 57.6 v 55.3 m/m, portending a potential peak in oversupply. Economist with Commerzbank said the latest PMIs reflects China govt's "managed stabilization". Also of note in China, the govt has completed the implementation of the new VAT scheme, replacing all business tax to now include construction, real estate, finance and consumer services sectors.

- Japan Final manufacturing PMI of 48.2 was only slightly better than 48.0 preliminary. Markit economist said the Output component with especially weak, registering the biggest rate of decrease in 2 years. New Orders also tracked that decline with the biggest drop since late 2012, even as employment increased for the seventh month running. Despite the slowing economy and rising uncertainty about the policies of Abenomics, cabinet approval ratings according to Nikkei have risen 7pts to 53% on favorable response to earthquake recovery measures. The same poll also found overwhelming opposition to Japan consumption tax hike, with 66% favoring a delay. Japan govt is expected to make a decision on the timing of that hike sometime this month. In terms of FX, Japan Fin Min Aso reiterated that one-sided speculative moves in FX are "extremely concerning" and the govt is prepared to take action.

- Monetary policy event risk is shifting the focus to Australia, where the recent soft CPI data has made for a much closer decision on tap tomorrow. Fixed income markets are tilting slightly in favor of a 25bp cut with a probability of just over 50%, though Australian National University's RBA "shadow board" expects rates to stay on hold as the central bank is skeptical that lenders will pass on the easing through lower rates. Economic data set out of Australia today would favor lower rates, as TD inflation gauge hit a 10-month low of 1.5% y/y, NAB business confidence slowed, and AIG Manufacturing retreated to a 3-month low. Westpac also kicked off Australia banks' earnings this week with a disappointing result, missing net profit forecasts amid 70bp drop in ROE. In its final hour of trade, WBC shares are down over 4%.



US equities/ADRs:

- BHI: Halliburton and Baker Hughes formally announce termination of Merger Agreement; Halliburton will pay Baker Hughes the termination fee of $3.5B

- APOL: Apollo Education Group Receives Revised $1.14 Billion Offer from Consortium of Investors

Notable movers by sector:

- Consumer discretionary: Tabcorp TAH.AU -3.3% (Q3 result)

- Financials: GPT Group GPT.AU +0.6% (Q1 result); Westpac Banking Corp WBC.AU -4.2% (H1 result)

- Industrials: Virgin Australia VAH.AU -3.7% (Q3 result); Cardno CDD.AU -10.8% (cuts guidance); Mitsubishi Motors 7211.JP +2.5% (considers compensation payments)

- Technology: Sharp Corp 6753.JP -4.1% (speculation on job cuts and earnings)

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