Equity markets generally pare declines, Shanghai Composite moved above 3,000

Asia Market Update: Equity markets generally pare declines, Shanghai Composite moved above 3,000; Press continues to comment on possible tariff relief for CN.

General Trend

- CNH pared drop as the Shanghai Composite moved above 3,000, UST yields declined on Monday; Commodity currencies also pared drop.

- US said to consider easing some of the tariffs on China; the move would be aimed at helping companies - financial press.

- (US) US President Biden to comment on inflation on Tues (May 10th) at 11:30 AM ET [US Apr CPI data is due on Wed (May 11th)].

- WTI Crude FUTs extend decline.

- Dalian Iron Ore FUTs continue to drop.

- BTC rose at 10-year JGB auction; BOJ continues to conduct fixed-rate JGB buying operations.

- US equity FUTS moved higher during Asia.

- Shanghai Composite rebounded after opening lower by over 1%.

- Hang Seng opened lower by 3.5% following holiday, later pared drop.

- Property indices lag in HK and Shanghai; Developers generally reported weaker sales for Apr.

- Japanese equities are currently off of the worst levels.

- Japanese cos. expected to report earnings include Nintendo, Nippon Steel, Sony, Yamato, Ricoh, AGC.

- Energy and Resources indices lag in Australia.

- Taiwan Semi may release monthly sales this week.

- Companies due to report during the NY morning include Aramark, The Brink’s Company, Bausch Health; Builders FirstSource, Diebold, Fox Corporation, Hyatt Hotels, International Game Technology, II-VI, loanDepot, Malibu Boats, Norwegian Cruise Line, Navios Maritime Partners, Planet Fitness, Peloton, FreightCar America, Reynolds Consumer Products, SoFi Technologies, Sysco Corp, Warner Music Group, Wynn Resorts, DENTSPLY.

Headlines/Economic data

Australia/New Zealand

- ASX 200 opened -0.6%.

- (AU) Australia Apr CBA Household Spending M/M: -3.8% v +9.2% prior; Y/Y: 5.0% v 5.7% prior.

- (AU) Australia Q1 Retail Sales (Ex-Inflation) Q/Q: 1.2% v 1.0%e.

Japan

- Nikkei 225 opened -0.6%.

- (JP) Japan Mar Household Spending Y/Y: -2.3% v -3.3%e (1st decline in 3 months).

- (JP) Japan Fin Min Suzuki: Yield gap is widening due to monetary policy differences; Reiterates FX stability is important and rapid moves are undesirable; no comments on FX levels.

- 6758.JP Confirms partial restart of Shanghai plant on May 8th; To gradually increase production at the plant.

- (JP) Former Japan PM Abe: Calls the Bank of Japan (BOJ) a Govt subsidiary; policy makers have hampered the BoJ’s independence - Japan press.

- (JP) Japan Chief Cabinet Sec Matsuno: Must respect independence of the BOJ.

- (JP) Bank of Japan (BOJ) Official Uchida: Reiterates desirable for FX to reflect the economic fundamentals; rate hike is not desirable for Japan's economy.

- (JP) Japan MoF sells ¥2.6T v ¥2.6T indicated in 0.1% 10-year JGBs; avg yield 0.2450% v 0.2010% prior; bid to cover: 5.74x v 3.61x prior.

Korea

- Kospi opened -0.8%.

- (KR) South Korea President Yoon: Korea and other nations experiencing unemployment and low growth - inaugural speech.

- 017670.KR ReportsQ1 (KRW) Net 211.3B v 466B y/y; Op 432B v 307B y/y; Rev 4.28T v 4.78T y/y.

- (KR) South Korea Mar Current Account (BOP): $6.7B v $6.4B prior (23rd consecutive surplus); Balance of Goods (BOP): $5.3B v $4.3B prior.

China/Hong Kong

- Hang Seng opened -3.5%; Shanghai Composite opened -1.3%.

- (CN) China Vice Premier Li: Reiterates dynamic zero covid policy - Press.

- (CN) China Securities Daily: CNY is unlikely to see an additional further sharp decline.

- (CN) US said to consider easing some of the tariffs on China; the move would be aimed at helping companies - financial press.

- (CN) Beijing reports additional 74 coronavirus cases v 49 prior.

- (CN) China PBOC sets Yuan reference rate: 6.7134 v 6.6899 prior.

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

- (CN) Shanghai, China said to have suspended the last 2 operating subways lines, amid covid - Chinese press.

- (CN) Beijing said to launch new mass COVID testing in at least 3 district on May 10-12 – press (overnight).

- (CN) China PBOC Q1 Policy Implementation Report: Reiterates will keep economic operations within reasonable range; Vows to closely monitor inflation and keep prices stable (yesterday after the close).

- (CN) China Insurance and Banking Regulator (CBIRC) said to have asked banks to increase loans to small companies - Chinese press (yesterday after the close).

Other

- (PH) Philippines elects Ferdinand Marcos Jr , AKA "Bongbong" as its next president (as expected).

North America

- TSLA Spokesperson: Not gotten notice that Shanghai plant has halted production, it is experiencing some logistics disruptions, continues to make some vehicles (denies press).

- (CN) US said to consider easing some of the tariffs on China; the move would be aimed at helping companies - financial press.

Europe

- RNO.FR Geely to acquire 34% stake in Korea unit, Renault Korea Motors, for KRW264B (CNY1.4B).

- (UK) Apr BRC Sales LFL Y/Y: -1.7% v -0.4% prior [largest decline since Mar 2020].

- (RU) US President Biden: Concerned that Russia President Putin does not have a way out of the Ukraine war, and we need to figure out what to do about it.

- HOLN.CH JSW said to be making a bid of $7.0B for the India unit of the company - Press.

Levels as of 01:15ET

- Hang Seng -2.3%; Shanghai Composite +0.7%; Kospi -0.5%; Nikkei225 -0.5%; ASX 200 -1.1%.

- Equity Futures: S&P500 +0.6%; Nasdaq100 +0.9%, Dax +0.4%; FTSE100 +0.3%.

- EUR 1.0581-1.0553; JPY 130.57.-129.80; AUD 0.6976-0.6911; NZD 0.6340-0.6284.

- Commodity Futures: Gold +0.2% at $1,861/oz; Crude Oil -0.9% at $102.19/brl; Copper +0.9% at $4.23/lb.