RBA shifts focus to July meeting

Asia Market Update: Modest equity moves seen in Asia amid continuing holidays and mixed US session; USD index rises after prior drop; RBA shifts focus to July meeting; Shanghai and Japan markets return on Thursday.

General trend

- Asia trades generally higher.

- S&P ASX 200 has moved higher after opening flat [Energy and Resources indices rise; Financials lag after prior gain].

- Hang Seng has remained higher after recent losses, index is currently near the opening level [TECH index has moved modestly higher; Banks remain under pressure amid recent earnings reports; SJM is due to report earnings later today].

- NZ Q1 labor market data is due on Wed (May 5th).

- RBNZ is due to present its Financial Stability Report on May 5th [Gov Orr will not attend press conference due to illness].

- Japan and Shanghai markets will remain closed on Wed (May 5th) [trading to resume on May 6th].

- Companies due to report during the NY morning include Apollo Global, Arconic, Berry Global, Bunge, Bausch Health, Broadridge Financial, Cummins, Conoco Phillips, Charles River Labs, Corsair Gaming, CVS, DowDuPont, Eaton Corp, Global Payments, Henry Schein, Ingredion, Gartner, Lamar Advertising, LGI Homes, Louisiana-Pacific, Martin Marietta Materials , Marathon Petroleum, Pfizer, Ferrari, Sabre Corp, Sealed Air, Sysco, Thomson Reuters, Under Armour, Vulcan Materials, Westlake Chemical, Warner Music Group, Zebra Technologies.

Headlines/Economic Data

Australia/New Zealand

- ASX 200 opened 0.2%.

- (AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 0.10%; AS EXPECTED; At July meeting will considering changing 3 year yield target to November 2024 and consider future bond purchases following completion of second A$100B purchase program; Sees underlying CPI for 2021 at 1.5%; mid-2023 at 2.0%; GDP outlook: 2021 4.75%, 2022 3.50%.

- SEK.AU Raises FY21 (A$) Net 150M (prior 100M); EBITDA to 510M (prior 460M), Rev 1.74B (prior 1.7B); To reduce stake in Zhaopin from 61.1% to 23.5% for gross A$697M.

- (NZ) New Zealand Fin Min Robertson: Next budget is one for recovery, hastening debt reduction risks undermining recovery, which has exceeded every forecast; reiterates comments from yesterday that they are looking at immigration policies.

- (AU) Australia Mar Final Trade Balance (A$): 5.6B v 8.0Be; Exports M/M: -2% v +4%e; Imports M/M: 4% v 9%e.

- (AU) Australia Mar Home Loans Value M/M: +5.5% v -0.3% prior; Investment lending M/M: 12.7% v 4.5% prior.

- (AU) Australia MP Ted O'Brien: Communist China is weaponizing trade and investment to pursue geostrategic outcomes for which earlier nations and empires would have used armed conflict, and it’s getting away with it; we should fight it with boycotts and sanctions - AFR.

Japan

- Nikkei 225 closed for holiday.

- 8802.JP To build 7 data centers in the US [northern Virginia], the total investment is estimated at ~¥200B - Japanese press.

- (JP) Japan Hokkaido Prefecture said to be asking Govt to apply coronavirus measures – Nikkei.

- 7270.JP Reports April N.A. sales 61.4K units, +101% y/y (best ever April sales).

- TM Reports Apr N.A. sales 239.3K units, +183% y/y, +30% above Apr 2019.

Korea

- Kospi opened +0.1%

- (KR) SOUTH KOREA APR CPI M/M: 0.2% V 0.0%E; Y/Y: 2.3% V 2.1%E (fastest pace since Aug 2017, first time above target in 2 years); CPI Core Y/Y: 1.4% v 1.2%e.

- 017670.KR To cancel KRW2.64T in Treasury shares with a book value of KRW1.97T - filing.

China/Hong Kong

- Hang Seng opened +0.3%; Shanghai Composite closed for holiday.

- 175.HK To establish JV with Volocopter [air taxi]- SCMP.

- 1638.HK Reports Apr contracted property sales CNY11.3B v 6.5B y/y.

- (CN) According to analysts if Australia terminates lease of port Darwin to the Chinese early it could kill all future Chinese investment into Australia, as it would be the 2nd agreement cancelled under the pre-text of national security - AFR.

Other

- (PH) Philippines Foreign Sec Locsin called China an "ugly oaf" among other things in an expletive laced Twitter rant, which called on China to withdraw their vessels near Scarborough Shoal.

North America

- (US) Fed Chair Powell: the economy is not out of the woods yet, but we are making real progress; economic outlook has "clearly brightened".

- XPO Reports Q1 $1.02 v $0.93e, Rev $4.77B v $4.33Be, raises FY guidance.

- LEG Reports Q1 $0.64 v $0.41e, Rev $1.15B v $1.14Be; Raises Quarterly dividend 5% to $0.42/shr, raises guidance.

- (US) Fed's Barkin (voter, hawk): we have clear forward guidance in place on both rates and tapering - CNBC interview.

- (US) Treasury Q2 financing estimates: Treasury to borrow $463B from April to June v $95B estimated in Feb v $401B q/q.

Europe

- (IE) Ireland Apr PMI Manufacturing: 60.8 v 57.1 prior (record high).

- (IE) EU said to signal flexibility on post-Brexit rules for Northern Ireland - financial press.

Levels as of 01:15ET

- Hang Seng +0.6%; Shanghai Composite closed; Kospi +0.1%; Nikkei225 closed; ASX 200 +0.5%.

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

- EUR 1.2066-1.2037; JPY 109.30-109.03; AUD 0.7765-0.7735; NZD 0.7209-0.7174.

- Commodity Futures: Gold -0.2% at $1,787/oz; Crude Oil -0.1% at $64.39/brl; Copper -0.4% at $4.50/lb.