Equities higher as coronavirus numbers fall in some key countries

Asia Market Update: Equities higher as coronavirus numbers fall in some key countries, oil remains lower as Russia and Saudi Arabia fight over production cuts, OPEC+ meeting moved to later in the week.

 

General Trend:

- Markets higher as coronavirus deaths seemingly slowing down in Italy, France and NYC, US bracing for a difficult 2 weeks, Trump warns; China markets closed for holiday

- Crude futures opened lower as Russia and Saudi Arabia continue to dispute possible production cuts, OPEC+ meeting scheduled for Monday pushed back to Thursday tentatively as the parties continue to try and hash out a deal

- UK PM Johnson hospitalized with coronavirus symptoms showing themselves for 10-days (prior tested positive for it), officials say it is not an emergency but a precaution, GBP slid on the news

- Japan may declare a state of emergency tomorrow, that would last until May 6th according to Japanese press

- Leaks of Japan stimulus plan includes tax breaks and cash handouts, which will come in 2 parts

- Friday China cut RRR for small banks by 1%, move to go into effect 50bps at a time, first cut in April the second in May

 

Headlines/Economic Data

Australia/New Zealand

- ASX 200 opened +0.2%

- MSB.AU FDA Clears IND for Remestemcel Use in COVID-19 ARDS Patients

- (NZ) Reserve Bank of New Zealand (RBNZ) offers to buy Local Government Funding Agency bonds (LGFA) "on a small scale" for liquidity management, this purchase is distinct from Large Scale Asset Purchases (LSAP) govt bonds

- (AU) Reserve Bank of Australia (RBA): Excess cash at exchange settlement (ES) accounts at A$81.7B v A$78.2B prior

- (AU) Reserve Bank of Australia (RBA) adds A$770M to banking system through repos v A$197M prior

- (NZ) Reserve Bank of New Zealand (RBNZ) buys NZ$585M v NZ$600M sought in 2025-2031 govt bonds

- (AU) Australia Mar Melbourne Institute Inflation m/m: +0.2% v -0.1% prior; y/y: 1.5% v 1.6% prior

- (AU) Australia sells A$2.0B v A$2.0B indicated in 2022 bonds, avg yield 0.245%; bid to cover 4.73x

- (AU) Reserve Bank of Australia (RBA) offers to buy total of A$2.0B in bonds v A$2.0B prior; Offers to buy bonds maturing from April 2027 to Nov 2028

Japan

- Nikkei 225 opened +0.2%

- (JP) Japan economic stimulus to be in 2 phases; Tax deferrals, cash payments to households, lowered property tax rates - Japan press citing document

- (JP) Japan poll shows 80% of Japan citizens believe a State of Emergency should be declared in Japan – press

- (JP) Japan Chief Cabinet Sec Suga: Will decide on emergency declaration based on expert opinion; Not seeing explosive spread of coronavirus like in other countries

- (JP) Japan to declare State of Emergency as early as tomorrow (Apr 7th) - Japan Press

- (JP) Japan Senior Ruling LDP official Kishida: Govt is close to finalizing economic package; Japan PM Abe to give details of economic package

- (JP) Analysts note that Japan Government Pension Investment Fund (GPIF) shift into more foreign bonds could cause other funds to make the same move – press

- 4901.JP Stronger on Japan Govt plans to triple its stockpile of Avigan

Korea

- Kospi opened +1.2%

- (KR) South Korea Feb air passengers 1.74M (1st reading below 2.0M since data tracking started 23 years ago)

- (KR) Korea Development Bank (KDB) to use ~50% of its KRW1.9T corporate bond purchasing fund in April – Yonhap

- (KR) Bank of Korea (BOK) sells 6-month Monetary Stabilization Bonds (MSB); avg yield 0.65% v 0.90% prior

- (KR) Bank of Korea (BOK) starts a pilot program for a central bank-issued digital currency (CBDC) to be able to test capabilities in issuing this type of currency in the future - Yonhap

- (KR) North Korea to hold Supreme People's Assembly (SPA) Friday, April 10th, where it could make a statement to the US – press

- (KR) South Korea Ruling Party Lee: South Korea may need a 3rd extra budget – Yonhap

- (KR) South Korea Fin Min: South Korea needs additional measures to help small businesses, exports, companies keep jobs

China/Hong Kong

- Hang Seng opened +1.4%; Shanghai Composite closed for holiday

- (CN) China National Health Commission Coronavirus Update for April 5th: 39 additional cases (38 imported) v 30 prior; Additional deaths: 1 v 4 prior; Additional Asymptomatic cases 78 v 47 prior

- (CN) China Vice Fin Min Xu Hongcai: China will incrase the scale of local govt special bond (LGSB) issuance as part of being more proactive with fiscal policies to offset the economic impact of the COVID-19 outbreak – Xinhua

- (CN) China PBoC to cut RRR in a targeted move for smaller banks by 100bps in two phases; To cut RRR by 50bps on Apr 15th and May 15th (Friday, as indicated)

Other

- (SA) Saudi Energy Min: Russia was the first country to announce that OPEC+ members are no longer obligated to cut output, which has lead to increasing supply

- (SG) Singapore Central Bank (MAS) to bring forward disclosure date of forex intervention operations to April from July

North America

- (US) President Trump: May be good signs coming from New York City; Seeing a leveling off of coronavirus in coronavirus hotspots - daily press conference briefing

- MMM Responds to Inaccurate Reporting on Alleged Seizure of N95 Respirator Shipments: 3M has no evidence to suggest 3M products have been seized. 3M has no record of any order of respirators from China for the Berlin police. We cannot speculate where this report originated

- (MX) Mexico Pres Lopez Obrador (AMLO): To cut salaries of top govt officials including mine; To announce MXN339B energy infrastructure plan next week; do not see an increase in public debt

- (US) CDC reports total coronavirus cases in the US rises to 304,826, +10% d/d (prior from 277,205, +15.9%); Total deaths 7,616 v 6,593 prior, +15.5% d/d v +21.1% prior

Europe

- (UK) PM Johnson admitted to hospital for tests, he has shown symptoms of coronavirus for 10 days, situation is not an emergency but will be held overnight - press

- (RU) Russia and Saudi Arabia with other large producers said to be in talks for a deal that will stop the price of oil from declining, despite remaining negative in the press - financial press

- (IT) Italy total coronavirus cases rise to 128,948 from 124,632 (+3.5% v +4% prior); death toll rises to 15,887 from 15,363 prior, +3.4% d/d v +10.5% yesterday

- (UK) MAR FINAL GFK CONSUMER COFIDENCE: -34 V -9 PRELIM

 

Levels as of 1:15ET

- Hang Seng +1.0%; Shanghai Composite closed for holiday; Kospi +2.7%; Nikkei225 +2.5%; ASX 200 +4.0%

- Equity Futures: S&P500 +3.4%; Nasdaq100 +3.5%, Dax +3.3%; FTSE100 ++2.5%

- EUR 1.0823-1.0799; JPY 109.09-108.37; AUD 0.6048-0.5991; NZD 0.5889-0.5851

- Commodity Futures: Gold -0.3% at $1,640/oz; Crude Oil -3.4% at $27.38/brl; Copper +1.3% at $2.21/lb