Government bond futures decline led by China

Asia Market Update: Equity markets rise after gains in the US amid better China March data, headlines related to US/China trade talks; Government bond futures decline led by China

General Trend:

- Financials lead early gains in Shanghai on better March bank lending data

- Chinese brokerage firm GF Securities rises over 5% in HK on guidance

- Shandong Chenming Paper drops over 6%, warned on Q1 profits amid lower prices

- Nikkei-weighted Softbank rises over 4%, continues to gain after Uber’s IPO filing

- Japan Display gains after agreeing to financial aid package from China/Taiwan investor group

- Japanese and Australian financials trade generally higher after US bank earnings, rise in bonds yields

- Australian equities lag on declines in Resource, Utility and Consumer Discretionary companies

- Commodities currencies outperform on better than expected China March banking lending and trade balance data

- The analyst debate on China’s monetary policy outlook has continued ahead of Wednesday’s Q1 China GDP release; China 10-yr bond futures hit Nov 2018 lows

- US may deemphasize the issue of Chinese state industrial subsidies in current trade talks amid lack of an agreement (financial press)

- US/Japan due to hold first round of trade talks on April 15-16th (Mon-Tues) in Washington D.C

- Reserve Bank of Australia (RBA) to release April policy meeting minutes on Tuesday (April 16th)

- Shanghai Auto Show is due to be held between April 18-25th

- The 125th China Import and Export Fair (Canton Fair) is due to open today (largest trade fair in China), first phase expected to be held April 15-19th

Headlines/Economic Data

Australia/New Zealand

- ASX 200 opened +0.1%

- (NZ) New Zealand Mar Performance of Services Index: 52.9 v 53.8 prior

- RIO.AU Approves additional $302M investment in Resolution copper project in Arizona; Has the potential to supply ~25% of US copper demand

Japan

- Nikkei 225 opened +1.2%

- 7269.JP To book ¥80B loss in FY18/19 due to recall of 2.0M cars in Japan - Nikkei

- 6752.JP Responds to Tesla CEO Musk comment that Panasonic is holding up production: Gigafactory is not running at full 35GWh capacity

- (JP) OECD: May be premature for Bank of Japan (BOJ) to focus on details of exit strategy; Govt measures will offset blow from 2019 sales tax hike and will have limited effect on demand

- (JP) Japan saw net immigration rise for a sixth straight year to a record high in the year through Oct 1st – Nikkei

Korea

- Kospi opened +0.4%

- (KR) Pres Trump: still have an "excellent" relationship with North Korea's Kim Jong Un, a third Summit would be good

- (KR) South Korea may not be excluded from US FX watch list in H1 -Korean press

- 005490.KR Will reorganize liquefied natural gas (LNG) operations as part of efforts to enhance business efficiency - Yonhap

China/Hong Kong

- Hang Seng opened +0.7%; Shanghai Composite opened +1.4%

- (CN) China PBoC Open Market Operation (OMO): Skips for 18th straight session: Net: CNY0 v CNY0 prior

- (CN) China PBoC sets yuan reference rate: 6.7112 v 6.7220 prior

- (US) Treasury Sec Mnuchin: US/China trade talks close to final round - US financial press

- (CN) US said to compromise on China state industrial subsidies to reach trade deal - Financial Press

- (CN) CHINA MAR AGGREGATE FINANCING (CNY): 2.86T V 1.85TE (Friday after the close)

- (CN) CHINA MAR NEW YUAN LOANS (CNY): 1.69T V 1.225TE (strongest since Feb 2017) (Friday after the close)

- (CN) CHINA MAR M2 MONEY SUPPLY Y/Y: 8.6% V 8.2%E (Friday after the close)

- (CN) China companies raising funds from new share issuance and IPOs rose in Q1 for the 1st time in 5 quarters; Q1 82 equity financing transactions totaling CNY74.7B, +80% q/q - Press

North America

- (US) President Trump: If the Fed had done its job properly, which it has not, the Stock Market would have been up 5000 to 10,000 additional points, and GDP would have been well over 4% instead of 3%...with almost no inflation. Quantitative tightening was a killer, should have done the exact opposite! – tweet

- ADS Enters agreement to sell Epsilon to Publicis for $4.4B (€3.9B) cash

- ADSW Expected to announce deal to be acquired by Waste Management for ~$2.9B including $5.0B in debt - financial press

Europe

- PUB.FR Reports Q1 Rev €2.1B v €2.1Be; organic sales -1.6%

- (UK) Apr Rightmove House Prices M/M: 1.1% v 0.4% prior; y/y: -0.1% v -0.8% prior

- (UK) Dep PM Lidington: Would like Govt and Labour to agree on binding mechanism for way ahead; customs union compromises still possible; Govt remains against second referendum – press

- (EU) ECB's Draghi: Worried about central bank independence in other countries, especially in US; does not think cases of interference are undermining global confidence

- (UK) Analysts concerned if UK Labour Party's Corbyn becomes Prime Minister, will restrict arms sales

- (IR) Iran protested by taking to the streets burning US flags for US decision naming the Islamic Revolutionary Guard a terrorist organization - financial press

Levels as of 01:20ET

- Hang Seng +0.6%; Shanghai Composite +1.2%; Kospi +0.4%; Nikkei225 +1.4%; ASX 200 -0.0%

- Equity Futures: S&P500 -0.0%; Nasdaq100 -0.1%, Dax +0.1%; FTSE100 -0.1%

- EUR 1.1300-1.1315; JPY 111.92-112.10; AUD 0.7164-0.7181; NZD 0.6762-0.6783

- Commodity Futures: Gold -0.3% at $1,291/oz; Crude Oil -0.5% at $63.57/brl; Copper -0.2% at $2.94/lb