Shanghai leads Asian equities after extended holiday

Asia market update: Shanghai leads Asian equities after extended holiday; Foxconn +6%, Israel-Hamas ceasefire over; Buffet remains firm on Apple; AU RBA tomorrow.

General trend

- A quiet day in Asia to start the week, with Japan again on Golden Week holiday (joined today by South Korea and Thailand).

- USD/JPY gained back +0.6% of lost ground, touching up to 154.0.

- Shanghai Composite +1.0% with China April Caixin PMI Services inline for its 16 month of expansion.

- Warren Buffet at Berkshire’s AGM said Apple will remain Berkshire’s top holding, despite selling some of their Apple holdings earlier in the year. Reveals sold all Paramount stock. Reiterates ‘feels extremely good” about their five Japanese trading houses.

- Foxconn (2317.TW) +6.4% on record April Revenues.

- Chinese Pres Xi is travelling in Europe this week, his first trip to the region in five years. He starts in France on May 6th, also visiting Serbia and Hungary.

- China PBOC fixed the Yuan stronger in the 7.09 handle again post the five-day holiday in China, however the market shortly after pushed CNH lower against USD in any case by 0.5%.

- (IL) Ceasefire talks in Cairo are over with no deal; Israel says Rafah attack 'soon'; Palestine health officials report 9 Palestinians killed in a house targeted in Rafah, Southern Gaza.

- Friday night in Asia saw cooler-than-expected US Non-Farm Payrolls for April, rekindling hopes of Fed rate cuts (S&P 500 +1.3%, RUT 2000 +1%). However, the cooler jobs results may add to investor concerns about a growth slowdown, added to last week’s Atlanta Fed GDPNow for Q2 cut to 3.3% (from 3.9%) as well as recent poor business optimism data for small businesses (NFIB index at 88.5 for March was the lowest since Dec 2012. April’s NFIB report due May 14th).

- UST yields continued their slide on Friday, -8bps, finishing the week down at 4.509%.

- US Equity FUTs up slightly during Asian trading.

Looking ahead (Asian time zone)

- Mon May 6th Pres Xi in EU this week, (Mon night US Fed’s senior loan officer survey).

- Tue May 7th AU RBA rate decision, JP Services PMI (Final).

- Thu May 9th CN Apr imports/exports, BOJ Summary of Opinions, (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

- Mon May 6th Japan, South Korea, Thailand.

- Thu May 9Th Indonesia.

- Fri May 10th Indonesia.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.1% at 7,638.

- Australia Apr ANZ-Indeed Job Advertisements M/M: +2.8% v -1.0% prior.

- Australia Apr Melbourne Institute Inflation M/M: 0.1% v 0.1% prior; Y/Y: 3.7% v 3.8% prior.

- Former RBA Gov Lowe said fight against inflation is not done, any upside surprises would mean the case for raising rates would mount [RBA decision due on May 7th] – AFR [update].

- New Zealand Apr ANZ Commodity Price M/M: +0.5% v -1.3% prior.

China/Hong Kong

- Hang Seng opens +0.1% at 18,488; Shanghai Composite reopens +0.9% at 3,132 (reopens after 5-day holiday).

- China Apr CAIXIN PMI SERVICES: 52.5 V 52.5E (16th month of expansion).

- Hong Kong Apr PMI (Whole Economy): 50.6 v 50.9 prior (2nd month of expansion).

- HKMA: Q1 Exchange Fund Investment Income (HK$): 54.3B v 108.0B y/y (second quarter of gains).

- Follow Up: China PBOC Shanghai Office: Affirms to support trade-ins of consumer goods, large-scale equipment renewal.

- China Q1 State-Owned Firms: Rev +3.2% y/y; Profits +2.8% y/y.

- China Labour Day holiday domestic tourism trips +7.6% y/y; Spending +12.7% y/y - Chinese state media.

- China equity market likely to see additional gains in May after hitting YTD highs in Apr; notes looser monetary policies overseas, ‘upbeat’ economic data and foreign inflows; cites analysts – China Securities News.

- China's Pres Xi: China-France relations "model of peaceful coexistence" - comments made as he begins European trip in France.

- (CA) Canada's Foreign Interference Commission (Interim report): Foreign meddling didn't impact election outcome - China was the main perpetrator of the interference [weekend update].

- Russia Pres Putin said to visit China on May 15-16th - press [weekend update].

- Hong Kong Mar Retail Sales Value Y/Y: -7.0% v +0.9%e; Retail Sales Volume Y/Y: -8.6% v -3.6% [weekend update].

- China PBOC sets Yuan reference rate: 7.0994 v 7.1063 prior (Apr 30th).

- China PBOC Open Market Operation (OMO): Sells CNY2B in 7-day reverse repos; Net drains CNY8B v injects CNY438B prior.

Japan

- Nikkei 225 closed for holiday.

- Berkshire Hathaway’s Warren Buffett Warren Buffett says he "feels extremely good" about Berkshire's investment in five Japanese trading houses - US financial press [weekend update].

South Korea

- Kospi closed for holiday.

- FSS [South Korea Regulator]: Issues interim results of short-selling probe: alleges $155M of illegal short selling by 9 banks - Korean press.

- Bank of Korea (BOK) Gov Rhee: Upcoming Staff Projection to raise 2024 GDP growth forecast [weekend update].

Other Asia

- Indonesia Q1 GDP Q/Q: -0.8% v -0.9%e; Y/Y: 5.1% v 5.1%e.

- Singapore said to examine wide-ranging proposals to revive its stock market - FT.

- Foxconn (2317.TW) Affirms Q2 to show y/y growth; Apr Rev (NT$) 511B, +19% y/y [record sales for the month] - update.

- Singapore Apr PMI (Whole Economy): 52.6 v 55.7 prior.

- Indonesia Central Bank (BI) Dir Susianto: Ready to do more to support Rupiah - FT interview.

- Indonesia Central Bank (BI) Gov Warjiyo: Starting next week, SRBI auction will be held twice a week to attract more inflows (weekend update).

North America

- Berkshire Hathaway: Buffett says Apple to remain Co's top holding; Reveals Co has exited entire PARA stake - AGM comments (update).

- Berkshire Hathaway Reports Q1 (class A) $8,825 v $24,377 y/y, Rev $89.9B v $85.4B y/y.

- (US) Automakers receive extension until 2027 from US Treasury Dept on use of China graphite in EV tax credits – financial press [update].

- (US) Apr change in Nonfarm Payrolls: +175K V +240KE (lowest since Dec 2023) [weekend update] - (US) Apr final S&P services PMI: 51.3 V 51.0E (confirms 15th month of expansion) [weekend update].

- (US) Apr ISM services index: 49.4 V 52.0E (1st contraction since Dec 2022); PRICES PAID: 59.2 V 54.9E (3-month high in prices paid) [weekend update].

Europe

- ECB’s Lane (Ireland, chief economist): My confidence on inflation returning to target is improving – Interview.

- (IL) Ceasefire talks in Cairo are over with no deal; Israel says Rafah attack 'soon'; Palestine health officials report 9 Palestinians killed in a house targeted in Rafah, Southern Gaza.

- (UK) PM Sunak canceled plan to hold general election during summer; an autumn election is now expected, follows the Tories' local election defeats – UK Press [update].

- (UK) John Swinney to become SNP leader in Scotland after challenger drops out - UK press.

Levels as of 01:20 ET

- Nikkei 225 closed; ASX 200 +0.7%; Hang Seng +0.1%; Shanghai Composite +1.1%; Kospi closed.

- Equity S&P500 Futures +0.1%; Nasdaq100 flat; Dax flat; FTSE100 +0.6%.

- EUR 1.0755-1.0772; JPY 152.80-154.01; AUD 0.6605-0.6625; NZD 0.5996-0.6018.

- Gold +0.5% at $2,320/oz; Crude Oil +0.5% at $78.46/brl; Copper +0.5% at $4.5915/lb.