Mixed trading amid lack of market-moving data

Asia Market Update: Mixed trading amid lack of market-moving data; Yen creeping back to 156; Focus on UK BOE rate decision tonight.

General trend

- Asian equities were mixed, with no news to really push the market one way or the other. Troubled developer Country Garden said it could not meet a Yuan bond interest payment, but China property markets seemed to shrug off the news.

- China’s April trade balance fell in USD terms, but rose in CNY-denominated trade.

- More jaw-boning from Kanda and Suzuki about intervention ‘if/when necessary’ did not turn the Yen around, which is creeping back to its overnight lows for the week. Overnight a Japanese official said the MOF had indeed intervened twice last week, but Kanda nor Suzuki would confirm.

- The Yen was not helped by the release of Japan’s labor cash earnings, which showed Japanese real wages having now been in 2 years of decline.

- Currencies in general flat over the past 24 hours, ahead of BOE rate decision tonight.

- BOJ Summary of Opinions inline, saying will adjust the degree of monetary accommodation as necessary.

- US equity FUTs down -0.1% to -0.2%during Asian trading.

Looking ahead (Asian time zone)

- Thu May 9th (Thu eve UK BOE rate decision).

- Fri May 10th NZ Apr PMI, JP Current A/c, TSM Apr Rev, (Fri eve UK Q1 GDP, Fri night ECB meeting minutes, Michigan May Consumer Sentiment.

- Sat May 11th CN PPI/CPI.

Holidays in Asia this week

- Thu May 9th Indonesia.

- Fri May 10th Indonesia.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens -0.1% at 7,792.

- New Zealand Fin Min Willis: Economic situation is challenging for govt books (NZ Gov’t to release budget on May 30th).

- New Zealand sells total NZ$500M vs. NZ$500M indicated in 2030, 2032 and 2041 bonds.

China/Hong Kong

- Hang Seng opens flat at 18,306; Shanghai Composite opens flat at 3,128.

- CHINA APR TRADE BALANCE: $72.4B V $81.0BE.

- CHINA APR TRADE BALANCE (CNY-DENOMINATED): 513.5B V 415.9B PRIOR.

- Country Garden (2007.HK) Says cannot make interest payments of CNY65.95M on $11B worth of Yuan bonds due today - financial press.

- (HU) Hungary Foreign Min Szijjarto: Hungary and China have agreed to cooperate on nuclear energy [overnight update].

- Country Garden (2007.HK) Reportedly asks China State Guarantor to pay bond interest – press [overnight update].

- (RU) Russia said to have started developing nuclear-powered unit for joint lunar station with China - Russian press [overnight update].

- China PBOC sets Yuan reference rate: 7.1028 v 7.1016 prior.

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

Japan

- Nikkei 225 opens +0.1% at 38,242.

- BOJ SUMMARY OF OPINIONS FOR APRIL: Will adjust the degree of monetary accommodation as necessary (inline).

- JAPAN MAR LABOR CASH EARNINGS Y/Y: 0.6% V 1.4%E (Japan real wages mark 2 years of decline).

- Japan Mar Preliminary Leading Index CI: 111.4 v 111.2e; Coincident Index: 113.9 v 114.0e.

- Japan Apr Total Reserve Assets: $1.28T v $1.29T prior.

- Japan Apr Tokyo Avg Office Vacancies: 5.4% v 5.5% prior.

- Japan sells ¥4.0T vs. ¥4.0T indicated in 6-Month Bills; Avg Yield: 0.0789% v 0.0418% prior, bid-to-cover: 3.24x v 4.20x prior.

- Japan BOJ Gov Ueda: Low real rates are supporting the economy and inflation - parliamentary testimony.

- Japan Fin Min Suzuki: Reiterates important for currencies to move in stable manner reflecting fundamentals (inline) - Japanese press.

- Japan top FX diplomat Kanda: Will not comment on FX, nor intervention.

- Japan media: anonymous govt official confirms that Japan intervened in the FX market twice last week, on April 29th and May 2nd.

- BOJ Gov Ueda: Reiterates BOJ will adjust degree of easing if price trend rises; Hard to say what neutral interest rate is [overnight update].

- Sees signs that virtuous cycle is strengthening [overnight update].

South Korea

- Kospi opens flat at 2,743.

- South Korea Mar Current Account: $6.9B v $6.9B prior.

- South Korea Pres Yoon: Govt focused on changing economy structure to private-led - Korean press.

Other Asia

- Philippines Q1 GDP Q/Q: 1.3% v 1.0%e; Y/Y: 5.7% v 5.9%e.

- Indonesia Central Bank (BI) maintains both 2024 and 2025 CPI between 1.5-3.5% range (within target band) [overnight update].

North America

- (IL) US Pres Biden: If Israel goes into Rafah, I won't supply the weapons historically used - TV interview.

- (US) MBA Mortgage Applications w/e May 3rd: +2.6% v -2.3% prior.

- (US) MAR FINAL WHOLESALE INVENTORIES M/M: -0.4% V -0.4%E.

- (US) DOE CRUDE: -1.4M V -0.5ME; GASOLINE: +0.9M V -1ME; DISTILLATE: +0.6M V -1ME.

- (US) Fed's Collins (non-voter): Have not seen further disinflationary progress in 2024; Policy is moderately restrictive, which is appropriate for risks; There are risks to cutting rates too soon.

- (US) Atlanta Fed GDPNow: Raises Q2 GDP forecast to 4.2% from 3.3% prior.

- (US) TREASURY'S $42B 10-YEAR NOTE AUCTION DRAWS 4.483% V 4.093% PRIOR; BID-TO-COVER RATIO: 2.49 V 2.56 PRIOR AND 2.51 OVER THE LAST 4 AUCTIONS; Tails when issued yield.

- (US) Fed's Cook (voter): Overall risks from CRE are sizable but manageable; Fed has increased supervision of banks with large CRE exposure.

Europe

- (IR) Advisor to Iran's Supreme Leader Kharrazi says Iran has the 'capability to build a nuclear weapon' - press.

- (UK) Think tank NIESR sees first BOE rate cut in August; Lowers UK econ growth to 0.8% (prior 0.9%).

- (UK) Apr RICS House Price Balance: -5% v -2%e.

- (HU) Hungary Central Bank (MNB) Apr Minutes: Decision to cut by 50bps was unanimous; patient approach is needed.

- (EU) ECB’s Wunsch (hawk, Netherlands): Still see significant risks in wages and services prices.

- (EU) ECB's Holzmann (Austria): Do not see a reason to lower rates too much too quickly - press interview.

Levels as of 01:20 ET

- Nikkei 225 +0.2%; ASX 200 -1.1%; Hang Seng +1.1%; Shanghai Composite +0.7%; Kospi -1.4%.

- Equity S&P500 Futures -0.1%; Nasdaq100 -0.2%; Dax -0.1%; FTSE100 +0.1%.

- EUR 1.0734-1.0758; JPY 154.16-155.70; AUD 0.6570-0.6587; NZD 0.5993-0.6009.

- Gold +0.1% at $2,325/oz; Crude Oil +0.6% at $77.45/brl; Copper +0.3% at $4.5553/lb.