Asia Market Update: Asian equity markets mixed despite gains on Wall St; Chinese shares pare some of the recent gains; Aussie 3-yr yield trades near 1.20% ahead of upcoming key events

 

General Trend:

- China State Media Commentary: China may have no interest in continuing trade talks with the US for now; sees little "sincerity" in Pres Trump's approach

- USD/CNH trades above 6.94 for the first time since late Nov 2018; yuan weakens amid PBoC fixing and China commentary piece related to US trade talks

- Declining sectors in Shanghai include Property, Materials, Energy and Consumer Discretionary

- US chip-related earnings in focus: Shares of NVIDIA and Applied Materials rise in after-hours trading following results

- Nikkei rises as banks rebound after recent losses, Softbank Group tracks gains in shares of Uber

- Sony rises over 10% amid buyback announcement, exploration of partnership with Microsoft

- Virgin Australia declines on cautious outlook, notes impact of Easter holiday timing and elections on corporate sector

- Australian equities hit highest level since 2007 ahead of the upcoming May 18th (Saturday) elections

- Australian energy company Ausdrill canceled planned bond offering, noted escalation of US/China trade war

- Key RBA events are seen for next week: On Tuesday (May 21st), the RBA is due to release the minutes for its May policy meeting.

- RBA Gov Lowe is also due to speak on May 21st at the Economic Society of Australia Business Lunch

- More analysts call for June RBA rate cut after disappointing April unemployment data

- China Vice Premier calls for increased pork production in the face of shortages

- Meanwhile, China said to have canceled a US pork import order amid trade war escalation

 

Headlines/Economic Data

Australia/New Zealand

- ASX 200 opened +0.2%

- (AU) NAB now sees RBA rate cuts in June and Aug 2019 (previously saw rate cuts in July and Nov 2019)

- (AU) RBA Watcher Terry McCrann said to have come into line with the view that the RBA will cut rates - US financial press

- (NZ) New Zealand Q1 PPI Input q/q: -0.9% v 1.6% prior; PPI Output q/q: -0.5% v 0.7% prior

China/Hong Kong

- Shanghai Composite opened flat, Hang Seng +0.5%

- (CN) China Vice Premier: urges hog producers to boost production to increase pork supply; calls for increase in poultry production to cover pork shortage; boosting pork production is vital for economic and social stability

- (CN) China NDRC: Reiterates trade friction's impact on the Chinese economy is 'under control', domestic CPI and PPI growth to stay stable in future; Pork prices stabilized and declined m/m in April

- (US) Reportedly China has canceled a US pork import order – press

- (CA) China said to have rejected two Canadian soybean shipments last week amid increase in scrutiny - press

- (CN) China NDRC: To cut capital ratio requirement on infrastructure projects

- (CN) China PBoC sets yuan reference rate: 6.8859 v 6.8688 prior

- (CN) China PBoC Open Market Operation (OMO): Skips for 6th consecutive session: Net: CNY0B v CNY0B prior

- (CN) China Finance Ministry sells 30-year bonds: yield 3.9284% v 3.88%e, bid to cover: 1.97x

- Huawei: Follow Up: Said to have contingency plan to cut reliance on US chips - Chinese Press

 

Japan

- Nikkei 225 opened +0.9%

- (JP) BoJ Gov Kuroda: China economy continues to expand firmly, but weak signs broadening due to trade friction, IT sector adjustment

- (JP) Japan PM Abe said to have been warned of credit downgrade risk if sales tax hike is again delayed - US Financial Press

- (JP) Japan Fin Min Aso: Reiterates Japan will try to limit impact on economy from tax hike; hard to see impact of US Huawei move on Japan companies but need to brace for some sort of impact

- (JP) Japan MOF Asakawa (Japan's top currency official): Won't intervene to seek solution to US-China trade frictions at G20; won't include language in communique saying members will fight protectionism

Korea

- Kospi opened +0.7%

- (KR) South Korea Finance Ministry: Capital spending and exports remain weak

Other

- (ID) Indonesia Central Bank Gov Warjiyo: Liquidity is heading towards tightness

- (SG) SINGAPORE APR NON-OIL DOMESTIC EXPORTS M/M: -0.6% V 5.0%E; Y/Y: -10% V -4.6%E; Exports to Europe -25.4% y/y; China -5.8% y/y

North America

- Cray Inc [CRAY]: Reportedly near deal to be acquired by HP Enterprise, announcement could come by as early as this week - US Financial Press

Europe

- (TU) White House issues notice on Turkey metal tariffs: Confirms US is terminating Turkey preferential treatment under GSP, effective on Friday (as expected); US to impose 25% ad valorem tariff on Turkey steel imports, down from 50% prior

- (DE) Germany Bundesbank VP Buch: Recent weakness in German economy seems only a 'dip'; More bank consolidation in Europe could provide stability - German press

 

Levels as of 1:20 ET

- Nikkei 225, +1.1%, ASX 200 +0.5%, Hang Seng -1%; Shanghai Composite -1.3%; Kospi -0.1%

- Equity Futures: S&P500 -0.3%; Nasdaq100 -0.4%, Dax -0.3%; FTSE100 -0.3%

- EUR 1.1181-1.1170 ; JPY 110.03-109.67 ; AUD 0.6898-0.6882 ;NZD 0.6543-0.6527

- Gold flat at $1,286/oz; Crude Oil +0.4% at $63.12/brl; Copper -0.5% at $2.735/lb

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