TradeTheNews.com Staff
TradeTheNews.com
Asia Market Update: Nikkei, chip-related stocks extend gains after NVDA results; Is a US debt agreement possible before the weekend?; Monday is a US holiday.
General trend
- China major state-owned banks seen selling US dollars in onshore spot FX market, notes USD/CNH was near 7.10 [amid Hong Kong holiday] - financial press.
- [Reminder May 19th (Fri)] (CN) China major state-owned banks said to be seen swapping Yuan (CNY) for USD in onshore FX forwards market - financial press.
- USD/JPY trades near ¥140.
- Japan Fin Min Suzuki: Reiterates FX should reflect fundamentals; will closely watch FX movement.
- South Korea bond yields extend rise following hawkish BOK.
- Equity markets rise in Asia.
- US and Japan to release statement regarding chip cooperation on Fri - Japanese press.
- US data due later on Fri (including Apr PCE).
Headlines/economic data
Australia/New Zealand
-ASX 200 opens -0.1% at 7,132.
-(AU) Australia Apr Retail Sales M/M: 0.0% v 0.3%e.
-(NZ) New Zealand May Consumer Confidence: 79.2 v 79.3 prior.
-(NZ) Reserve Bank of New Zealand (RBNZ) Assistant Gov Silk: Watching if markets price rate cuts too soon; rates need to remain on hold for extended period.
-(NZ) ANZ expects the RBNZ to raise rates by 25bps in Nov [previously expected a rate hike in Aug], believes RBNZ pause does not necessarily mean that interest rates have peaked - US financial press.
China/Hong Kong
-Hang Seng closed for holiday.
-Shanghai Composite opens -0.1% at 3,198.
-(CN) US Commerce Sec Raimondo: Confirms met China Commerce Min Wang in Washington; both sides agreed to keep communication on trade concerns.
-(CN) China Commerce Min (MOFCOM): Both sides agreed to establish communication channels [follows meeting with US Commerce Sec].
-(CN) China to encourage car makers and airlines to have "long partnership" - financial press.
-(CN) China PBOC sets Yuan reference rate: 7.0760 v 7.0529 prior.
-(CN) China PBOC Open Market Operation (OMO): Sells CNY5.0B in 7-day reverse repo; Net injects CNY3.0B v injects CNY5.0B prior.
Japan
-Nikkei 225 opens +0.4% at 30,909.
-*(JP) JAPAN MAY TOKYO CPI Y/Y: 3.2% V 3.4%E; CPI (EX-FRESH FOOD) Y/Y: 3.2% V 3.4%E.
-(JP) Japan Apr PPI Services Y/Y: 1.6% v 1.4%e.
-(JP) Japan BOJ Gov Ueda: Shortening duration of bond yield BOJ targets to 5-year zone from current 10-year would be among options if we were to tweak YCC [from May 25th].
-(JP) Japan Cabinet Office (Govt) May Monthly Report: Raises overall economic assessment (1st upgrade since July 2022).
-(JP) Japan PM Kishida: Can't condone acts of debt-trapping – Tokyo.
-(JP) US and Japan to release statement regarding chip cooperation on Fri - Japanese press.
-Mitsubishi UFJ [8306.JP]: Prices ¥570B in debt [3 tranche offering].
-(JP) Japan: To freeze assets of 78 groups in Russia as part of new sanctions, also includes 17 individuals; Japan to ban providing construction and engineering services in Russia.
Korea
-Kospi opens +0.3% at 2,561.
Other Asia
-Mediatek [2454.TW]: Denies media report related to chip development partnership with Nvidia.
North America
-(US) US debt talks seen centering around raising debt limit for 2 years; debt deal not yet agreed, differences remain on key issues - US financial press.
-(US) US House Speaker McCarthy: There is no agreement; will stay at Capitol, continue to work this weekend.
-(US) White House, Republican proposals differ now by less than $70B on discretionary spending – press.
-(US) Republican Debt Negotiator Graves: Work requirements are a sticking point in the talks with the White House.
-(US) Canadian ratings agency DBRS Morningstar places US 'AAA' credit rating under review with 'negative implications' [**Note: follows Fitch announcement on May 24th].
-(US) Follow Up: Fitch Places Fannie Mae and Freddie Mac Ratings on Rating Watch Negative.
-(US) US Treasury Sec Yellen to meet with IMF Managing Dir on Fri [May 26th] to discuss Article IV Consultation.
-(US) Fed releases factors affecting reserve balances (H.4.1): Discount window borrowing fell to $4.2B v $9.05B w/w; Banks have borrowed $91.9B v $87.0B w/w from new BTFP facility.
-(US) Fed's Collins (non-voter): Rate pause would give us space to assess actions to date.
-*(US) Q1 PRELIMINARY GDP ANNUALIZED Q/Q: 1.3% V 1.1%E; PERSONAL CONSUMPTION: 3.8% V 3.7%E.
-Costco: Reports Q3 $2.93* v $3.36e, Rev $53.7B v $54.90Be.
- JPMorgan: Reportedly JPMorgan developing a ChatGPT-like AI service that gives investment advice - press.
- Baidu [BIDU] CEO: Will very soon officially launch the latest version of ChatGPT like product [Ernie Bot 3.5]- financial press.
Europe
-(EU) ECB’s Knot (Netherlands): Need rate hike in June and July, open minded about Sep.
Levels as of 01:20 ET
- Nikkei 225, +0.8%, ASX 200 +0.1% , Hang Seng closed; Shanghai Composite +0.4% ; Kospi +0.2%.
- Equity S&P500 Futures: -0.2%; Nasdaq100 -0.2%, Dax flat; FTSE100 -0.1%.
- EUR 1.0740-1.0719 ; JPY 140.10-139.70 ; AUD 0.6516-0.6490 ;NZD 0.6079-0.6048.
- Gold +0.2% at $1,948/oz; Crude Oil -0.1% at $71.74/brl; Copper +0.8% at $3.6193/lb.
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