Asia market update: Green day for Asia as chip stocks rebound; Hotter AU CPI; CN long bonds rise; Tesla +13% a/h; Focus on data and earnings through end of week.

General trend

- Generally positive sentiment out of US session earnings flowed into Asia with all equities markets higher, led by Kospi (+2.3%) Nikkei (+2.0%) and Hang Seng (+1.7%). ASX in Australia started positively but fell back to flat after hot Q1 CPI.

- Chip stocks in particular rebounded after last week’s falls, with SK Hynix +4%, Samsung +4%, Advantest +4.0%, Tokyo Electron +7.6% (JP market heavyweight Fanuc +3.8% with earnings after the close today). Earlier Nvidia +3.6% with a further +1.7% a/h, and Texas Instruments +7.7% a/h on better than expected guidance as the biggest maker of analog chips.

- Australia’s Q1 and March CPI came in hotter than expected; Aussie 10-yr yields rose as high as 17bps with the Aussie dollar heading back above 65c to the Dollar.

- Global yields overall were firmer since better than expected PMI figures out of Europe last night accentuated vs slightly lower UST yields by relatively soft PMIs out of the US, leading to some rethinking on the likely US interest rate differential going forwards.

- CN longer-dated bond yields rose after comments from PBOC officials; meanwhile, Local government bond yields continued to hit record lows.

- Tesla +13% a/h post-Q1 earnings and conference call as the company spent most of the call on future-oriented efforts as it hinted again at accelerating development of more affordable models, FSD and robotaxi updates to come in August.

- US equity FUTs +0.4-0.7% during Asian trading.

Looking ahead (Asian time zone)

- Thu Apr 25th KR Q1 Adv GDP, (Thu eve DE Consumer Confidence, Thu night US Q1 Adv GDP).

- Fri Apr 26th JP BOJ rate decision, AU PPI, (Fri night US Mar PCE).

Holidays in Asia this week

- Thu Apr 25th Australia, New Zealand.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens flat at 7,682.

- Australia Q1 CPI Q/Q: 1.0% V 0.8%E; Y/Y: 3.6% V 3.5%E (MAR CPI Y/Y: 3.5% V 3.4%E).

- New Zealand Mar Trade Balance (NZD): +0.6B v -0.2B prior.

- New Zealand sells total NZ$500M vs. NZ$500M indicated in 2029 and 2034 bonds.

China/Hong Kong

- Hang Seng opens +1.0% at 16,993; Shanghai Composite opens +0.3% at 3,029.

- China local company bond yields reportedly fall to record lows - financial press.

- Shanghai Securities News: China PBOC bond trading can help ease supply pressure; cites analysts.

- China FX regulator: To defend bottom line of financial security - People's Daily.

- China PBOC official: Long term treasury yields will operate within a reasonable range that matches long term economic growth expectations [overnight update].

- Reportedly China’s sovereign wealth fund likely bought at least $43B of onshore ETFs in Q1, higher q/q – press [overnight update].

- Hong Kong Mar CPI Composite Y/Y: 2.0% v 2.1%e [overnight update].

- China PBOC sets Yuan reference rate: 7.1048 v 7.1059 prior.

- China PBOC Open Market Operation (OMO): Sells CNY2B in 7-day reverse repos; Net CNY0B v net CNY0B prior.


- Nikkei 225 opens +0.9% at 37,871.

- Japan Mar PPI Services Y/Y: 2.3% v 2.1%e.

- Bank of Japan (BOJ) announcement related to outright bond buying operations: For 3-5 Years; 5-10 Years, 10-25 Years and >25 Years (inline with previous April ops).

- Japan opens anti-dumping probe into Chinese graphite electrodes - press.

- Former Japan top-currency official Mitsuhiro: 'Very close' to FX intervention should the yen currency weaken more.

- Bank of Japan (BOJ) will discuss the impact of the Yen's rapid slide at this week's policy meeting - Nikkei.

- Japan Cabinet Office (Govt) Apr Monthly Report: Maintains overall economic assessment of seeing a gradual economic recovery despite some sluggishness [overnight update].

- Japan business lobby (Keidanren) Chief Tokura: Think Japan govt will make appropriate decision on intervention; The yen cuurency is too weak given country's economic fundamentals [overnight update].

- Japan ruling LDP party official Katayama: Japanese authorities could intervene in the FX market any time as recent yen declines are excessive and out of line with fundamentals [overnight update].

South Korea

- Kospi opens +1.5% at 2,662.

- South Korea Apr Consumer Confidence: 100.7 v 100.7 prior (update).

Other Asia

- Thailand Central Bank releases Apr monetary policy meeting minutes: recognized that some groups of SMEs and low-income households face tighter credit conditions.

- Thailand Central Bank (BOT) Snr Dir Tanboon and Dep Gov Piti: Current key OCR rates help support Thai Baht levels (inline) - press.

- Taiwan Mar Industrial Production Y/Y: 4.0% v 7.3%e [overnight update].

North America

- (US) President Biden: Congress has passed my legislation to strengthen our national security (as expected).

- Tesla Exec & CEO Musk: Affordable Tesla models to arrive in FY25; Focus on FSD and Robotaxi update in Aug; Investor Relations chief Martin Viecha to resign, effective within a few months - earnings call comments.

- (US) Apr Philadelphia Fed Non-Manufacturing Activity Regional Index: -12.4 v -18.3 prior; New Orders: +6.5 v -3.9 prior.

- (US) Weekly Redbook LFL Sales w/e Apr 20th: 5.3% y/y, Apr MTD +5.1% y/y.

- (US) Apr preliminary S&P Manufacturing PMI: 49.9 V 52.0E (first read in contraction territory this year); Services PMI: 50.9 v 52.0e (15th month of expansion).

- (US) Apr Richmond Fed Manufacturing index: -7 V -8E; Volume of new orders: -9 v -17 prior.

- (US) Mar new Home Sales: 693K V 669KE; Months supply (seasonally adjusted): 8.3 v 8.8 prior.

- JPM CEO Dimon: Sees chance stagflation could happen again - Economic Club of New York.

- (US) Treasury sells $69B 2-year note auction draws 4.898% V 4.595% prior; bid-to-cover ratio: 2.66 V 2.62 prior and 2.70 over the last 12; Stopped through when issued.


- (UK) BOE’s Pill (chief economist): Baseline scenario for cutting Bank Rate remains some way off but can start before pay and services CPI is at target.

- (HU) Hungary Central Bank (MNB) cuts base rate by 50BPS TO 7.75%; as expected.

- (EU) ECB’s Nagel (Germany): Need to be convinced that inflation is heading back to target before we can cut rates.

- (UK) PM Sunak reportedly does not rule out July general election - UK press.

- (IR) Iran Pres Raisi: If Israel attacks Iranian territory then circumstances will completely change, and its possible that there will be nothing left of the Israeli regime.

- (UK) PM Sunak: Confirms UK will increase defense spending ot 2.5% of GDP by 2030; We will put the UK defense industry on a 'war footing' - comments from Warsaw.

Levels as of 01:20 ET

- Nikkei 225 +2.3%; ASX 200 +0.1%; Hang Seng +2.1%; Shanghai Composite +0.4%; Kospi +2.3%.

- Equity S&P500 Futures +0.4%; Nasdaq100 +0.7%; Dax +0.2%; FTSE100 +0.3%.

- EUR 1.0699-1.0715; JPY 154.74-154.90; AUD 0.6482-0.6530; NZD 0.5930-0.5952.

- Gold -0.1% at $2,339/oz; Crude Oil +0.1% at $83.48/brl; Copper +1.1% at $4.4722/lb.

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