General Trend:
- While Asian equities opened higher, current trading is more mixed
- China pharmaceutical stocks rise after China announced tax incentives
- Japan’s Fast Retailing outperforms after March domestic SSS +13% y/y
- Samsung Electronics declines ahead of expected prelim Q1 results on Friday
- Activists target South Korea: Elliott discloses stakes in Hyundai and Kia
- Markets on the lookout for countermeasures from China, after US revealed tariffs list following market close. China govt announces meeting later today on US/China trade situation
- Weaker Services Data: Japan March Services PMI slowest growth in 17-months; China Caixin Services PMI slows to 4-month low
- Australia Feb Retail Sales above ests, amid gains in household goods and rebound in department stores; Aussie gains
- Australia money market rates continue to rise after recent RBA statement noted the increase in short-term rates
- Sri Lanka Central Bank unexpectedly cut lending rate to address tepid growth outlook and rise in short-term rates
- China to inject $9.7B into nationalized insurer Anbang
- Chinese markets to close for holiday on Thursday-Friday
Headlines/Economic Data
Japan
- Nikkei 225 opened +0.6%; closed +0.1%
- TOPIX Real Estate index +1.4%, IRON & Steel +0.8%; Electric Appliances -0.8%
- Japanese mega-banks trade broadly lower
- (JP) Japan Mar Composite PMI: 51.3 v 52.2 prior; Services PMI: 50.9 v 51.7 prior (slowest pace of growth in 17-months)
- Sony, 6758.JP Expects Q1 gain of ¥105B from sale of ~17% of stake in Spotify
- (JP) Some analysts see weakening earnings momentum for Japan companies – Japanese Press
Korea
- Kospi opened +0.2%
- (KR) South Korea Financial Services Commission to require top 5 financial conglomerates and 2 other large institutions to reduce the number of intra-group transactions – Korean press
- (KR) South Korea denies reports that US has requested monthly FX intervention report
- 005380.KR Elliott discloses $1B total stake in Hyundai Mobis, Hyundai Motor, and Kia Motors
- (KR) Bank of Korea (BOK) sells KRW2.98T in 2-yr monetary stabilization bonds (MSB) at 2.12%
China/Hong Kong
- Hang Seng opened +0.3%, Shanghai Composite +0.2%
- Hang Seng Telecom index -1.2%, Info Tech -0.7%, Financials -0.1%; Property/Construction +0.8%, Utilities +0.8%
- Hong Kong Consumer Goods companies rise over 1% as these items were not the focus of the US tariff list
- (CN) China Mar Caixin PMI: Services: 52.3 v 54.5e (4-month low); Composite: 51.8 v 53.3 prior
- (US) USTR announces $50B list of specific tariffs against China over IP trade violations
- (CN) US list of China goods violates international trading rules – Xinhua
- (CN) China US Embassy Official: To resort to WTO and take corresponding measures of equal scale and strength against US products
- (CN) China Commerce Min (MOFCOM): Resolutely opposes proposed US tariffs under section 301; china to announce countermeasures soon
- (US) Treasury Sec Mnuchin: Will continue to engage with China on reciprocal trade
- (CN) PBoC Working Paper said global central banks can adopt negative rates as a conventional tool
- (CN) China said to give preferential tax treatment to generic drug companies, issues more subsidies to soy farmers – financial press
- (CN) China PBoC Open Market Operation (OMO): Skips OMO (9th straight session) v skipped prior; Net: CNY0B drain v CNY0B drain prior
- (CN) China PBoC sets yuan reference rate at 6.2926 v 6.2833 prior
- (CN) China PBOC: China will control macro leverage ratio and credit risk in key areas
- (CN) China Commerce Ministry (MOFCOM): To adjust tariffs on ethylene glycol and diethylene glycol, effective April 12th; products are sold by companies including BASF, Sasol, INEOS, Eastman and Equistar
- (HK) HK$ 1-yr HIBOR rises for the 21st day, longest run since 1992
Australia/New Zealand
- ASX 200 opened +0.1%
- ASX 200 REIT index +1%; Telecom -0.4%
- (NZ) New Zealand Govt 8-month financials: Budget surplus NZ$2.85B, NZ$494M better than expected
- Yowie, YOW.AU Company’s chocolates to be placed in 8.5K 7-Eleven stores and 6,000 CVS Health outlets in USA in May
- (AU) Australia sells A$600M v A$600M indicated in May 2028 Bonds, avg yield: 2.6149% v 2.7039% prior, bid to cover 4.17x v 3.35x prior
- (AU) AUSTRALIA FEB BUILDING APPROVALS M/M: -6.2% V -5.0%E; Y/Y: -3.1% V 0.3%E
- (AU) AUSTRALIA FEB RETAIL SALES M/M: 0.6% V 0.3%E
- (NZ) New Zealand Treasury: Consumption should continue to support growth
- Looking Ahead: New Zealand to offer NZ$100M in 2040 bonds at auction on Thursday; Australia Feb Trade Balance to be released
Other Asia
- (TW) Taiwan said to demand permit for imports of steel from China – Local Press
North America
- US equity markets ended broadly higher: Dow +1.7%, S&P500 +1.3%, Nasdaq +1%, Russell 2000 +1.3%
- S&P 500 Energy +2.1%, Health Care +1.5%
- (US) Fed’s Brainard (voter, dove): US trade policies add material uncertainty to economic outlook
- US) Fed’s Kashkari (dove, non-voter): It’s not clear that more rate hikes are justified; Fed is probably close to the neutral rate level
- (US) Fed confirms to name San Francisco Fed Pres Williams to New York Fed, effective June 18th
- (US) In March, Trump lawyers said to have been told by Special Counsel Mueller that the President is not a criminal target at this point; Trump remains under investigation – Washington Post
- (US) Weekly API Oil Inventories: Crude: -3.3M v +5.3M prior
- Looking Ahead: US March ADP Nonfarm Employment Change due for release, along with ISM Non-Manufacturing PMI, Weekly DoE Crude Oil Inventories
Europe
- (UK) BRC Mar Shop Price Index y/y: -1.0% v -0.8% prior (largest decline since Feb 2017
- WPP.UK Confirms has opened an independent counsel to conduct an investigation in response to an allegation of personal misconduct against Sir Martin Sorrell, Chief Executive Officer
- Looking Ahead: Euro Zone March Prelim CPI to be released
- Conviviality [CVR.UK]: China private equity company ZQ Capital thought to be front runner to acquire Conviviality – UK press
Levels as of 02:00ET
- Hang Seng -0.4%; Shanghai Composite +0.5%; Kospi -1.4%
- Equity Futures: S&P500 -0.3%; Nasdaq100 -0.6%, Dax -0.3%; FTSE100 -0.2%
- EUR 1.2287-1.2269; JPY 106.62-106.41; AUD 0.7717-0.7680;NZD 0.7296-0.7256
- Jun Gold +0.0% at $1,337/oz; May Crude Oil -0.3% at $63.31/brl; May Copper -0.3% at $3.06/lb
