Hang Seng shines in Asia again as markets catch breath after price whipsawing post-FOMC

Asia market update: Hang Seng shines in Asia again as markets catch breath after price whipsawing post-FOMC, incl. another 5 Big Figure Yen drop; Asia PMI day.

General trend

- US news and data dominated the aftermath in Asian trading, as generally quiet markets caught their breath after volatile trading in the NY session.

- Apparent further intervention in the Yen, as post-FOMC another 5 Big Figure drop from ~157.5 to ~153. However, just as on Monday USD/JPY has since pushed steadily higher again, retracing about 2/3 of the Yen gains during Asia trading. Japanese authorities again refused to say whether intervention had in fact occured.

- Hang Seng up over 2% again, leading Asia by a substantial amount with mainland prop indices +4%; Said to be continued reaction to govt rules relaxing property purchase rules and requirements in multiple Chinese cities, including Beijing.

- South Korea Apr CPI a fraction lower than expected.

- Asia PMI day.

- Bank of Japan March Minutes (two meetings ago) revealed no new information.

- US equity FUTs +0.5% to +0.6% during Asian trading.

Looking ahead (Asian time zone)

- Fri May 3rd AU Mar Home Loans & Investment (Fri night US Apr NFP, Apr ISM Services).

Holidays in Asia this week

- Thu May 2nd China.

- Fri May 3rd China, Japan.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens flat at 7,571.

- Australia Mar Trade Balance (A$): 5.0B v 7.3Be.

- Australia Mar Building Approvals M/M: 1.9% v 3.4%e.

- New Zealand Mar Building Permits M/M: -0.2% v 14.9% prior.

- New Zealand sells total NZ$500M vs. NZ$500M indicated in 2030 and 2033 bonds.

- RBNZ Gov Orr & Dep Gov Hawkesby: House prices are in a sustainable zone; Better for economy to have diversified trade - comments post-RBNZ bi-annual Financial Stability Report.

China/Hong Kong

- Hang Seng opens flat at 17,760; Shanghai Composite closed for holidays (through Monday, May 6th).

- China President Xi calls for ‘all-out’ rescue effort following highway collapse – China media.

- Some Democrats [Senators Sherrod Brown, Bob Casey and Tammy Baldwin] are pushing Pres Biden for higher China tariffs; the review of the China tariffs could be completed by as early as May.

- Politico.

- Reportedly China copper producers plan to export the largest amount of copper in 12 years amid near record-high LME prices – press [overnight update].

- China reportedly bans cities with big home stockpiles from new land sales - Press.

Japan

- Nikkei 225 opens -0.7% at 38,004.

- Japan Apr Monetary Base Y/Y: 2.1% v 1.6% prior.

- Japan Apr Consumer Confidence: 38.3 v 39.8e (lowest since Jan).

- Bank of Japan (BOJ) Mar Minutes (2 decisions ago): Vital to communicate no rapid rate hikes plan.

- Former Japan Finance Min official Ito says authorities are trying to generate market expectations that the USD/JPY ceiling is ¥160.

- Japan sells ¥5.8T vs. ¥5.8T indicated in 3-Month Bills; Avg Yield: 0.0259% v 0.0089% prior; bid- to-cover: 2.93x v 3.07x prior.

- Japan sells ¥498.2B v ¥500B indicated in 1-5 yr JGB's in liquidity enhancement auction: Avg accepted spread -0.008%, bid-to-cover: 3.60x.

- Follow up: Japan, France to cooperate on key minerals supply - Japanese press.

- Japan top FX diplomat Kanda: Nothing to say on whether Japan intervened in FX - Japanese press.

- Japan reportedly considering regulations on AI development – Nikkei [overnight update].

South Korea

- Kospi opens -0.5% at 2,679.

- South Korea Apr CPI M/M: 0.0% V 0.1%E; Y/Y: 2.9% V 3.0%E.

- South Korea Apr PMI Manufacturing: 49.4 v 49.8 prior (second month of contraction).

- South Korea financial regulator proposes detailed guidelines for "corporate value-up programme"; Guidelines to be finalized by end of May.

- South Korea may raise KDB capital by KRW1.5T to further help chip sector - Korean press.

- South Korea Central Bank (BOK): Will closely monitor markets and consult with Econ ministries to respond to any volatility in financial markets (responding to FOMC decision earlier).

Other Asia

- MSFT To invest $2.2B in cloud and IT tech in Malaysia over next 4 years - financial press.

- Indonesia Apr CPI M/M: 0.3% v 0.3%e; Y/Y: 3.0% v 3.1%e.

- Taiwan Apr PMI Manufacturing: 50.2 v 49.3 prior (moves into expansion for first time since May 2022).

- Indonesia Apr PMI Manufacturing: 52.9 v 54.2 prior (31st month of expansion).

- Malaysia Apr PMI Manufacturing: 49.0 v 48.4 prior (19th month of contraction).

- Vietnam Apr PMI Manufacturing: 50.3 v 49.9 prior (moves back into expansion after 1 month of contraction).

- Thailand Apr PMI Manufacturing: 48.6 v 49.1 prior (9th month of contraction).

- Philippines Apr PMI Manufacturing: 52.2 v 50.9 prior (8th month of expansion).

- India Apr Final PMI Manufacturing: 58.8 v 59.1 prelim (confirms 34th month of expansion).

North America

- (US) Apr ADP employment change: +192K V +180KE; Notes pay growth continues to slow to smallest pace of pay gains since Aug 2021; Hiring was broad-based in April.

- US) Treasury quarterly refunding; to sell $58B V $58BE in 3-year notes; $42B V $42BE in 10-year notes; $25B V $25BE in 30-year bonds; Announces first treasury buyback op to begin May 29th with weekly ops.

- (US) Apr final S&P Manufacturing PMI: 50.0 V 49.9E.

- (US) Mar construction spending M/M: -0.2% V 0.3%E.

- (US) Mar JOLTS job openings: 8.49M V 8.690ME (lowest since May 2021).

- (US) Apr ISM Manufacturing : 49.2 V 50.0E; prices paid: 60.9 V 55.4E; New Orders: 49.1 v 51.0e (lowest since May 2022).

- (US) DOE CRUDE: +7.3M V -1.5ME; GASOLINE: +0.3M V -1ME; distillate: -0.7M V -0.5ME.

- (US) Atlanta Fed GDPNow: Cuts Q2 GDP forecast to 3.3% from 3.9%.

- (US) US banking regulators could announce finalized bank capital rules as early as August; Despite push back from banks, officials will adjust rather than redo the July 2023 proposal - press.

-(US) FOMC leaves target range unchanged AT 5.25-5.50%; Repeats waiting for greater confidence on inflation to cut; Confirms will slow balance sheet runoff starting in June to $25B from $60B in UST; Maintains MBS runoff at $35B (as expected).

Europe

-(IL) Axios' reporter Barak Ravid: Netanyahu told Blinken during their meeting today he won't accept a deal that will include ending the war. He said if Hamas doesn't drop this demand there will be no deal and Israel will invade Rafah, per Israeli and U.S. officials.

Levels as of 01:20 ET

- Nikkei 225 +0.1%; ASX 200 +0.3%; Hang Seng +2.4%; Shanghai Composite closed; Kospi -0.1%.

- Equity S&P500 Futures +0.5%; Nasdaq100 +0.6; Dax +0.3; FTSE100 +0.5%.

- EUR 1.0706-1.0722; JPY 154.22-156.30; AUD 0.6515-0.6540; NZD 0.5914-0.5935.

- Gold +0.6% at $2,323/oz; Crude Oil +0.6% at $79.46/brl; Copper -0.2% at $4.5598/lb.