Asia Mid-Session Market Update: China Caixin Manufacturing PMI echoes slowdown of official prints; RBA on hold with a more upbeat tone
US Session Highlights
Blue chips slowed down today, with the Dow posting a small loss, while the broader stock market continued its rally. A possible US government shutdown seems averted, with more talk of a vote by this week on a new healthcare bill. Despite some weaker than expected economic data, investors returned to risky assets in particular techs. Apple rose more than 2%, helping propel the NASDAQ to a new high just short of 6,100. Congress and the White House averted a government shutdown by agreeing to a bipartisan federal funding bill of around $1T over the weekend. The deal should be voted through by end of the week and would include an increase in defense and homeland security spending. UK PM May said today that the UK would not agree to any Brexit bill without having an agreement on trade post-Brexit first. Her words come after various EU officials have stated there will be no post-Brexit negotiations until the conditions of UK’s exit from the union have reached an advanced stage.
US markets on close: Dow -0.1%, S&P500 +0.2%, Nasdaq +0.7%
Best Sector in S&P500: Technology
Worst Sector in S&P500: Telecommunications
Biggest gainers: MAC +3.6%; LRCX +3.0%; ALXN +2.9%
Biggest losers: AMG -5.9%; NWL -3.6%; BBBY -3.4%
At the close: VIX 10.11 (-7bps); Treasuries: 2-yr 1.28% (-0.4bps), 10-yr 2.32% (-0.4bps), 30-yr 3.01% (-0.4bps)
US movers afterhours
ANGI: IAC’s HomeAdvisor confirms to combine with Angie’s List; shareholders can elect to receive one ANGI Homeservices share or $8.50/shr in cash; +41.4% afterhours
LMNX: Reports Q1 $0.28 v $0.08e, R$77.8M v $74.0Me; Guides Q2 Rev $74-79M v $75.3Me; +16.2% afterhours
THC: Reports Q1 -$0.52 v -$0.53e, R$4.81B v $4.85Be; announces agreement with Humana- Guides Q2 -$0.20 to -$0.10 v -$0.05e, R$4.85-5.05B v $4.89Be, adj EBITDA $550-600M; +13.7% afterhours
APTS: Reports Q1 FFO $0.36 v $0.34e, R$66.6M v $55.5Me; affirms FY17 FFO $1.40-1.48 v $1.47e, R$285-315M v $234Me (prior $1.40-1.48 v $1.48e; +7.9% afterhours
CYH: Reports Q1 $0.08 v $0.06e, R$4.49B v $4.34Be; +3.4% afterhours
AMD: Reports Q1 -$0.04 v -$0.05e, R$984M v $983Me; -11.2% afterhours
Key economic data
(CN) CHINA APR CAIXIN PMI MANUFACTURING: 50.3 V 51.3E; 7-month low; 10th straight month of expansion
(AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 1.50% (AS EXPECTED)
(JP) JAPAN APR SERVICES PMI: 52.2 V 52.9 PRIOR; COMPOSITE PMI: 52.9 PRIOR
(JP) JAPAN APR MONETARY BASE Y/Y: 19.8% V 20.3% PRIOR; MONETARY BASE END OF PERIOD: ¥462.2T V ¥447.3T PRIOR
(JP) Bank of Japan (BOJ) March 15th Policy Meeting Minutes: Members agreed to closely examine consumer price trend
(KR) SOUTH KOREA APR CPI M/M: -0.1% V 0.1%E; Y/Y: 1.9% V 2.1%E; CORE Y/Y: 1.3% V 1.3%E
(KR) SOUTH KOREA APR PMI MANUFACTURING: 49.4 V 48.4 PRIOR
Asia Session Notable Observations, Speakers and Press
Asian equity markets traded mixed, tracking US indices. Kospi was among the top performers rising to record highs, while Australia saw declines on weakness in energy and metals stocks. Crude oil prices faltered overnight with Libya disclosing higher production and Kuwait also forecasting increased output in the medium term. In FX, dollar majors traded in narrow rangers. AUD/USD was most volatile, sliding after a disappointing China Caixin Manufacturing PMI before lifting to its highs after an upbeat RBA policy statement.
China Caixin Manuf PMI came in below estimates at 50.3 V 51.3E, which was also its 7-month low. Slower increases in output and new orders were attributed to the decline, along with softer growth in new orders that forced manufacturers to cut payrolls at the fastest pace since January. Slowing growth was also felt in the prices components as the rate of input price inflation softened to a seven-month low. Recall over the weekend, China official manufacturing and non-manufacturing PMIs also hit 6-month lows.
RBA decision saw rates remain at 1.50% as widely expected, but the policy statement was surprisingly more upbeat after last month’s dour assessment of employment. RBA noted improvement in global growth boosting demand for Australian exports, noted employment was now a bit stronger, forecast growth reaching 3% level over next few years, and also anticipating further increase in underlying inflation. AUD/USD rose some 20pips on the RBA statement while the yield on Australia 3-year ticked up 1bps.
China
(CN) China foreign exchange trade system (CFETS): Started a trading platform for credit-default swaps today – Chinese press
(CN) Despite slowing profit growth among China’s top banks in Q1, their NPL ratios have also trended down – Chinese press
(CN) China Securities Regulatory Commission (CSRC) approves IPO applications for 10 companies; Will be allowed to raise combined CNY5.8B – Chinese press
Japan
(JP) Japan Fin Min Aso: Output gap is improving; Jobless rate has fallen below 3% – press
(JP) Japan Center for Economic Research (JCER): Japan Mar GDP estimated at -1.3% m/m; First contraction in 3 months – Nikkei
Australia/New Zealand
(NZ) According to Realestate.co.nz, number of homes available for sale in Auckland has hit a 5-year high, even as many other regions see record lows – NZ press
Korea
(KR) Moody’s: Geopolitical risk for Korea has broadened on rise in risk of conflict on Korean peninsula
(KR) China-Korea border town of Dandong said to be "urgently" recruiting Korean-Chinese interpreters in the event of "emergency situation" in North Korea – Korean press
(KR) Korea’s Kospi rises over 1% above 2,225, above its record close
Asian Equity Indices/Futures (00:00ET)
Nikkei +0.7%, Hang Seng +0.3%, Shanghai Composite -0.2%, ASX200 -0.5%, Kospi +0.8%
Equity Futures: S&P500 -0.1%; Nasdaq flat, Dax +0.2%, FTSE100 +0.5%
FX ranges/Commodities/Fixed Income (00:00ET)
EUR 1.0895-1.0920; JPY 111.75-112.00; AUD 0.7520-0.7550; NZD 0.6900-0.6935
June Gold +0.2% at 1,258/oz; June Crude Oil -0.2% at $48.75/brl; July Copper -1.2% at $2.63/lb
SLV iShares Silver Trust ETF daily holdings rise to 10,308 tonnes from 10,1273 tonnes prior
(CN) PBOC SETS YUAN MID POINT AT 6.8956V 6.8931 PRIOR; Weakest Yuan fix since Apr 11th
(CN) PBOC skips open market operations v injection CNY80B prior in 7-day, 14-day and 28-day reverse repos; First skip after 9 straight injections; Drains net CNY70B
Asia equities notable movers
Yamaha, 7951.JP, +16%, earnings
Belle International Holdings, 1880.HK, +15.6%, privatization
BYD, 285.HK, +8.4%, earnings
Hyundai Motor, 005380.KR, +4.9%, broker note
Japan Display, 6740.JP, -5.7%, revises outlook
KEPCO, 052690.KR, -3.8%, earnings
Pilbara Minerals, PLS.AU, +16.9%, signs financing agreement
MG Unit, MGC.AU, -12.1%, trading update
Woolworths WOW.AU +1.2%, Reports Q3
ANZ ANZ.AU -2.2%, Reports H1
