General Trend:
- Japanese equities underperform as the new quarter and fiscal year begin, USD/JPY declined on Tuesday
- Declining sectors in Japan include Securities, Real Estate and Electric Appliances
- Shanghai Composite rises less than 0.5% during morning session
- IT and Telecom Services firms rise in China, Guangdong province plans to spend ~CNY50B on 5G-related construction projects in 2020 (Chinese press)
- Macau casino revenues drop over 79% in March (in line with ests)
- Australian equities outperform, sectors moving higher include Energy and Resources
- Aussie 10-year bond yield declines by over 10bps; RBA conducted daily QE-related bond purchases and released the minutes from its March emergency policy meeting
- New Zealand 20-yr bond yield rises over 5bps, NZ DMO raised issuance forecast due to the fiscal impacts from coronavirus
- China has started to report asymptomatic cases of coronavirus
- US March ADP employment data due later today
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +1.0%
- (AU) AUSTRALIA MAR AIG PERFORMANCE OF MANUFACTURING INDEX: 53.7 V 44.3 PRIOR
- FCG.NZ Reports Feb NZ Milk Collection 133.5M KGMS, +0.3% y/y; Season to date collections -0.3% y/y
- (AU) Reserve Bank of Australia (RBA) offers to buy total of A$3.0B in bonds v A$3.0B prior
- (NZ) New Zealand Treasury Sec McLiesh: See at least 10% contraction in Q2 GDP
- (NZ) New Zealand Fin Min Robertson: GDP will take a serious hit as will unemployment
- (AU) RESERVE BANK OF AUSTRALIA (RBA) MARCH 18TH MEETING MINUTES: Term funding scheme and the three-year bond yield target were both significant policy developments that would not have been under consideration in normal times, no appetite for negative rates
- (AU) Reserve Bank of Australia (RBA): Excess cash at exchange settlement (ES) accounts at A$72.2B v A$66.8B prior
- (AU) Reserve Bank of Australia (RBA) adds A$1.35B to banking system through repos v A$2.89B prior
- (AU) AUSTRALIA FEB BUILDING APPROVALS M/M: 19.9% V 3.0%E
Japan
- Nikkei 225 opened -1.2%
- (JP) JAPAN Q1 TANKAN LARGE MANUFACTURING INDEX: -8 V -10E (lowest level since March 2013); OUTLOOK SURVEY: -11 V -15E
- (TH) Thailand Central Bank and Bank of Japan (BOJ) signed bilateral local currency swap agreement, effective March 31 2020
- (JP) Bank of Japan (BOJ) Gov Kuroda: If CPI nears 2% target will need to adjust monetary policy; buying bonds to achieve price stability target – speaking in Diet
- (JP) Japan Mar Final PMI Manufacturing: 44.8 v 44.8 prelim (lowest since Apr 2009, 11th consecutive month of contraction)
- (JP) Japan PM Abe: We want a stimulus larger than during the fall of the Lehman Brothers, fiscal stimulus will be funded through bond issuance
- (JP) Bank of Japan (BOJ) announcement related to daily bond buying operation: Cuts purchases of 3-5 yr JGBS
- (JP) Japan Chief Cabinet Sec Suga: Govt is ready to do whatever is needed to maintain employment and keep the economy stable; Japan at brink of coronavirus emergency situation
Korea
- Kospi opened -1.0%
- (KR) South Korea reported to have a tentative agreement with US for military cost sharing – Yonhap
- (KR) South Korea Fin Min Hong: Daily exports may show negative growth; export shock from virus hasn’t materialized yet
- (KR) South Korea Mar Trade Balance: $5.0B v $5.5Be; Exports y/y: -0.2% v 1.6%e; Imports y/y: -0.3% v 0.7%e
- (KR) South Korea Mar PMI Manufacturing: 44.2 v 48.7 prior (lowest reading since Jan 2009)
- (KR) South Korea to hold general election April 15th, stock exchange to be closed
- (KR) Bank of Korea (BOK) sells 2-year Monetary Stabilization Bonds (MSB); avg yield 1.03% v 1.25% prior
China/Hong Kong
- Hang Seng opened -1.0%; Shanghai Composite opened -0.3%
- (CN) China State Council: China will further support its small and medium-sized enterprises (SMEs) to mitigate the impact of the COVID-19 epidemic while increasing local government bond issuance to shore up effective investment; will further use targeted RRR cuts for small and medium sized banks
- (CN) China State Council extends new energy vehicles subsidies an additional for 2-years; will use fiscal money to compensate the replacement of diesel vehicles in key areas such as Beijing , Hebei and Tianjin; the exemption of used car VAT tax from May 1 to end of 2023
- (CN) China National Health Commission Coronavirus Update for March 31st: 36 additional cases (35 imported) v 48 prior; Additional deaths: 7 v 1 prior; Asymptomatic cases: 130 (1st day reporting this figure)
- (CN) China PBoC Open Market Operation (OMO): Skips v injects CNY20B in 7-day reverse repos prior; Net CNY0B v injects CNY20B prior
- (HK) Macau Mar Gaming Rev (MOP) 5.3B, Y/Y: -79.7% v -79.5%e
- (CN) China PBOC sets Yuan reference rate: 7.0771 v 7.0851 prior
- (CN) CHINA MAR CAIXIN PMI MANUFACTURING: 50.1 V 45.0E; New orders, export orders and employment still in contraction
- HSBC and Standard Charter decline after canceling dividends and share buybacks
- (CN) China Trade Min: Will stabilize trade and foreign investment; Restarting supply chains will bring new challenges; China supply chain resumption faces new challenges
- HUAWEI.CN Reports FY19 (CNY) Net 62.7B v 59.3B y/y, Rev 858.8B v 721B y/y
Other
- (SG) Singapore prelim Q1 URA Property Index: 0.0% v 0.5% prior
North America
- (US) Weekly API Crude Oil Inventories: +10.5M v -1.2M prior
- (US) Fed’s Mester (hawk, voter in 2020): expect to see some very bad numbers on the economy; US unemployment to rise above 10% due to coronavirus – CNBC interview
- (US) Pres Trump: its a matter of life and death that people follow the social distancing guidelines for the next 30 days; Holding back some equipment including 10K ventilators for a surge in coronavirus cases; US will go through “Very tough 2 weeks”
- (US) Mafnitude 6.5 earthquake reported in Challis, Idaho (southern) – USGS
- (US) Energy Dept may rent space for excess oil supplies in Federal space, using strategic reserve would ease storage squeeze for drillers; low demand has created a backlog of oil needing storage
- (US) White House Official: Will not reopen Obamacare exchanges during pandemic [responds to prior press speculation]
Europe
- RNO.FR Expected to announce deal with union that will guarantee full pay to 36,000 workers, in exchange workers would work extra days in the future – Les Echos
- (UK) Bank of England (BOE) and Prudential Regulation Authority (PRA) issues directive asking banks to not pay dividends, suspend share buybacks or pay bonuses to senior staff
- (FR) France Mar New Car Registrations 62.7K units, -72.3% y/y
Levels as of 1:15ET
- Hang Seng -1.4%; Shanghai Composite +0.3%; Kospi -0.7%; Nikkei225 -2.7%; ASX 200 +3.6%
- Equity Futures: S&P500 -1.9%; Nasdaq100 -1.5%, Dax -1.0%; FTSE100 -2.6%
- EUR 1.1039-1.1006; JPY 107.94-107.25; AUD 0.6159-0.6109; NZD 0.5986-0.5927
- Commodity Futures: Gold +0.1% at $1,597/oz; Crude Oil +0.1% at $20.50/brl; Copper -0.7% at $2.20/lb
