General trend

- Covid situation in China remains mixed with Shanghai reporting no new cases and Beijing 99 new cases (highest in the current outbreak).

- NZD outperforms.

- The next Reserve Bank of New Zealand (RBNZ) meeting is scheduled for May 25th (Wed).

- Australia election results in focus as no officials take office today.

- RBA’s Kent: the Bank's balance sheet will still be at least twice as large as what it was just prior to the pandemic. It will decline gradually thereafter, with bond maturities of between $35 billion and $45 billion every year for some time.

- Chinese markets lag; COVID news remains a focal point.

- Hang Seng TECH index drops ahead of earnings due this week [Alibaba, Meituan, XPeng].

- Shanghai Property index continues to decline despite the recent cut in the 5-year LPR.

- Financials weigh on the S&P ASX 200.

- Japanese equities have pared gains.

- US equity FUTs have moved higher [no specific catalyst seen].

- Russia negotiator Medinsky: Russia is ready to continue stalled peace negotiations with Ukraine.

- Indian steelmakers drop sharply; India said to raise export tax related to certain products.

- Companies due to report during the NY morning include XPeng.

Headlines/Economic data

Australia/New Zealand

- ASX 200 opened +0.2%.

- (AU) Australia Labour coalition wins 72 seats in Parliament to 52 of the Liberal coalition; Anthony Albanese to become PM on Monday, May 23rd.

- (AU) Australia new PM Albanese sworn in; Calmers as Treasurer; Gallagher Fin Min, Wong as Fin Min.

- (AU) Reserve Bank of Australia (RBA) Assistant Gov Kent: RBA has no plans to sell bonds from portfolio, holdings will remain substantial for some years to come; now in quantitative tightening phase.

- (NZ) New Zealand RBNZ NZIER Shadow Board: There is a wide range of views within the Shadow Board over how much the Reserve Bank should increase interest rates, particularly for the coming year; majority view amongst Shadow Board members was that the Official Cash Rate (OCR) should be increased by 50 basis points at the May meeting.

- ELD.AU Reports H1 (A$) Net 91.2M v 68.2M y/y; EBIT 132.8M v 73.8M y/y; Rev 1.51B v 1.10B y/y.


-Nikkei 225 opened +0.9%.

- (JP) US President Biden visiting in Japan: Will launch new framework for region later today.

- (JP) Bank of Japan (BOJ) offers to buy 5-10 year JGBs at fixed rate of 25bps; Opens window to buy unlimited amount of 10-year JGBs at 0.25% [as expected].


- Kospi opened +0.5%.

- (KR) South Korea and US considering expanding join military exercises to deter nuclear threat from North Korea – press.

- (KR) South Korea May 1-20 Exports Y/Y: 24.1% v 16.9% prior; Imports Y/Y: 37.8% v 25.5% prior; Chip Exports y/y: 13.5% v 22.9% prior.

- (KR) South Korea sells KRW2.60T in 5-year bonds: Avg yield: 3.155% v 3.145% prior [from Apr 25th].

China/Hong Kong

- Hang Seng opened -0.5%; Shanghai Composite opened +0.1%.

- (CN) SCMP reporting that large tech companies in China are cutting staff, due to regulatory uncertainty and a slowing economy have led to widespread reductions across the sector, though notes no filings yet disclosing the cuts.

- (CN) China has CNY950B in special bonds coming due in H2 of this year, expected to issues another round of special bonds in July/Aug - press.

- (CN) China Foreign Min Wang Yi: US strategy for Indo-Pacific is "doomed to fail" - comments during US Pres Biden's trip to the region.

- (CN) Shanghai's Jingan district will require all shops to shut, residents to stay at home and mass testing conducted over May 22-24th – press.

- (CN) China Securities Journal: China policies support the debt financing of non-state owned property developers.

- (CN) China press citing info from Ministry of Transport: China is counting on infrastructure investments to stabilize social and economic growth; China spent CNY729.5B on highway and waterway projects in the first four months of 2022, and CNY157.5B on railroads.

- (CN) Beijing reports 99 new COVID cases for May 22nd; Shanghai reports no new COVID cases outside of quarantine.

- (CN) China PBOC sets Yuan reference rate: 6.6756 v 6.7487 prior.

- (CN) China PBOC Open Market Operation (OMO): Sells CNY10B in 7-day reverse repos v CNY10B prior; Net CNY0B v Net CNY0B prior.

- (HK) Hong Kong Exchange approved FWD IPO, timing still undecided for $1.0B IPO - press.


- (SG) Singapore Apr CPI M/M: -0.1% v +0.2%e; Y/Y: 5.4% v 5.6%e; CPI Core Y/Y: 3.3% v 3.4%e.

- (IN) India govt reportedly considers to spend additional INR2T (~$26B) to fight inflation – press.

- (IN) India reduces import duty on coking coal and anthracite (high energy coal) to 0% from 2.5%; coke and semi-coke to 9% from 5%, in order to reduce the cost of domestic production of steel products.

North America

- (US) Dr. Ashish Jha, W.H. COVID-19 response coordinator: Daily case number is now above 100K/day and we should be wearing masks in indoor spaces; A new generation of vaccines is needed - ABC Interview.

- (US) Long Beach port chief Cordero: China lockdowns will have a domino effect on our port in Long Beach; Labor talks likely resolved a couple months after July.


- (EU) ECB chief Lagarde: Cryptos "worth nothing"; Reiterates call for regulation; Reiterates the ECB is going to follow the path of stopping net asset purchases, then sometime after that [which could be a few weeks] hike interest rates.

- (BE) Belgium introduces compulsory 21-day quarantine for monkeypox patients (first country to do so) after fourth case has been confirmed in the country – press.

- (EU) Vice-President of the EU parliament Barley: Remaining 26 EU member states should now launch a Russian oil embargo without Hungary.

- SGRE.ES Siemens Energy (67.2% holder) files tender offer to buy all remaining shares at €18.05/shr.

- (RU) Russia Central Bank starting to buy FX to curb ruble (RUB) strength - Russian press.

Levels as of 01:00ET

- Hang Seng -1.8%; Shanghai Composite -0.5%; Kospi +0.0%; Nikkei225 +0.6%; ASX -0.1%.

- Equity Futures: S&P500 +0.9%; Nasdaq100 +1.2%, Dax +0.8%; FTSE100 +0.6%.

- EUR 1.0595-1.0558; JPY 128.06-127.15; AUD 0.7098-0.7044; NZD 0.6467-0.6391.

- Commodity Futures: Gold +0.6% at $1,852/oz; Crude Oil +0.5% at $110.83/brl; Copper -0.1% at $4.30/lb.

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