Equities Rise And Government Bond Futures Sell Off At Start Of Q2

Apr 01 19, 07:48 GMT

General Trend:

Chinese IT, Materials, Property and Telecom Services companies are among the early out performers
Iron/Steel, Marine/Transportation, Electric Appliances and Machinery firms rise in Japan; Softbank gains
Automakers and megabanks also trade broadly higher in Japan
Printing companies rise in Japan as new imperial era is announced
Japan Display rises over 11%, confirmed talks related to financing agreement
Nikkei-weighted Fanuc rises over 3%, speculated to change CEO
Pharmaceutical company Daiichi Sankyo rises over 9%, extends gains after recently announced collaboration agreement with Astrazeneca
Taiwan’s Hon Hai rises over 9%, FY earnings beat ests
Australia March NAB business confidence hits lowest level since 2015, RBA due to meet on Tuesday
Australia March CoreLogic housing price index sees 18th straight m/m decline
Turkish Lira (TRY) weakens after recent local elections
China yuan denominated government bonds and policy bank bonds will be phased into the Barclays Global Aggregate Bond Index starting in April
China Vice Premier Liu He is expected to visit the US in early April for trade talks

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.4%
RIO.AU Update on Tropical Cyclone Veronica; guides FY19 iron ore production lower end of propr 338-350Mt
(AU) Australia Mar CoreLogic House Price M/M: -0.7% v -0.9 prior (18th consecutive decline)
WOW.AU Announces A$1.7B buyback, to use proceeds from sale of petrol business: Identified ~30 Big W stores for closure, Big W Q3 SSS +6%
(AU) Australia sells A$700M v $700M indicated in 5.50% April 2023 bonds, avg yield 1.4064%, bid to cover 3.99x
(AU) Australia Mar Melbourne Institute Inflation m/m: 0.4% v +0.1% prior; y/y: 2.1% v 1.7% prior
*(AU) AUSTRALIA MAR NAB CONFIDENCE: 0 V 2 PRIOR (lowest reading since Mar 2015); BUSINESS CONDITIONS: 7 V 4 PRIOR
(NZ) New Zealand Treasury: Businesses expect flat growth in 2019 as well as higher costs, tighter margins

Japan

Nikkei 225 opened +1.4%
(JP) JAPAN Q1 TANKAN LARGE MANUFACTURING INDEX: 12 V 13E (lowest since March 2017); OUTLOOK: 8 V 12E; LARGE ALL INDUSTRY CAPEX: 1.2% V 0.7%E
(JP) Bank of Japan (BOJ) Official comments on Q1 Tankan Survey: Some firms said they were feeling impact of overseas economic slowdown
(JP) Japan Mar Final Manufacturing PMI: 49.2 v 48.9 prelim (second consecutive contraction)
(JP) Japan Bankers Association chairman Makoto Takashima: BOJ needs to carefully consider’ the economic impact of driving the short term rate further below zero as doing so would cause policy side effects to grow further – press
(JP) Bank of Japan (BOJ) announces Bond purchases for month of Apr (unchanged m/m)
(JP) Japan Cabinet announces the new imperial era for Japan to be called “Reiwa” meaning culture is born and nourished as people’s hearts are drawn beautifully together
4911.JP Signs joint business plan with Alibaba; financial terms not disclosed
6740.JP Aiming to reach agreement on financing this week; aims for total capital increase of ¥110B with ¥60B-¥80B through issuance of stock and bonds

Korea

Kospi opened +0.6%
102940.KR Has halted INVOSSA sales in South Korea – US financial press
(KR) SOUTH KOREA MAR TRADE BALANCE: $5.2B V $5.1BE; Exports Y/Y: -8.2% v -6.9%e (4th straight decline); Imports Y/Y: -6.7% v -5.2%e
(KR) South Korea Mar Manufacturing PMI: 48.8 v 47.2 prior; new export orders contract for 8th consecutive month, longest decline since 2015
(KR) South Korea President Moon urges North Korea to respond to US requests for talks
(KR) South Korea sells KRW840B v 850B indicated in 3-yr bonds, avg yield 1.710% v 1.895%; bid to cover 3.03x

China/Hong Kong

Hang Seng opened +1.1%; Shanghai Composite opened +0.7%
(CN) CHINA MAR OFFICIAL MANUFACTURING PMI: 50.5 V 49.6E (highest since Sept 2018, first reading above 50 since Oct); Non-manufacturing PMI: 54.8 v 54.3 prior
(CN) CHINA MAR CAIXIN MANUFACTURING PMI: 50.8 V 50.0E (first reading over 50 in 4 months; matches highest reading since July 2018)
(CN) China State Council said it will continue to suspend tariffs on US cars and auto part imports – financial press
(HK) On Friday HKMA purchased HK$4.97B as Hong Kong dollar (HKD) traded at weak end of trading band – financial press
(CN) EU Commission Presidential Candidate Weber: The EU should prevent Chinese firms from going on a “shopping spree” and protect strategic assets
(CN) China PBoC Open Market Operation (OMO): Skips for 9th consecutive session: Net: CNY0 v CNY0 prior
(CN) China PBoC sets yuan reference rate: 6.7193 v 6.7335 prior
(CN) China to conduct coal mine safety inspections from April to June – Local Press
(HK) Macau Mar Gaming Rev (MOP) 25.8B v 25.4B prior; Y/Y: -0.4% v -3.0%e

Other Asia

North America

(MX) US President Trump reiterates threat to close the border with Mexico this week if Mexico does not immediately stop all illegal immigration to the US – tweets
(US) President Trump tweet: Had the Fed not mistakenly raised interest rates, especially since there is very little inflation, and had they not done the ridiculously timed quantitative tightening, the 3.0% GDP, & Stock Market, would have both been much higher & World Markets would be in a better place!

Europe

SWEDA.SE Retained the law firm Nordia as external counsel in relation to an initiated criminal investigation regarding inter alia aggravated swindling
(EU) EU Juncker: We have had a lot of patience with our British friends over Brexit, but patience runs out; Would like UK to reach an accord over Brexit in the next hours/days – speaking to Italian press
(TR) Turkey mayoral election results: Ruling party held on to most locations, opposition regained hold Istanbul and made significant inroads in other parts of Turkey
(TR) Turkey President Erdogan: Will appeal election results where needed; Istanbul mayorship may have been lost but many municipalities were won; we stopped attacks against our economy and will strengthen economy against such attacks
(EU) ECB Knot (Netherlands) said he expects euro zone economy to regain pace in the second half of 2019 – German Press

Levels as of 01:20ET

Hang Seng +1.8%; Shanghai Composite +2.6%; Kospi +1.4%; Nikkei225 +1.4%; ASX 200 +0.6%
Equity Futures: S&P500 +0.7%; Nasdaq100 +1.0%, Dax +0.7%; FTSE100 +0.4%
EUR 1.1220-1.1241; JPY 110.88-111.19 ; AUD 0.7104-0.7128; NZD 0.6813-0.6835
Commodity Futures: Gold -0.1% at $1,297/oz; Crude Oil +0.8% at $60.58/brl; Copper +0.9% at $2.96/lb