China MOFCOM Issues Strong Comments On Trade War

General Trend:

• Asian equities trade generally lower, in line with US trading
• Markets still waiting for next move by US regarding Syria
• Energy companies track advance in oil prices
• Japan retail earnings in focus: Aeon and Ryokin Keikaku gain after earnings and guidance, Lawson Inc declines
• Nikkei-weighed Fast Retailing scheduled to report earnings after the close
• PBoC Gov says Q1 data has been a bit better than expected ahead of GDP figures expected on April 17th
• China Commerce Ministry plays down recent comments from President Xi on trade
• Bank of Korea (BOK) votes unanimously to leave rates unchanged; 3-year bond yields decline
• RBNZ official says the central bank plans to start publishing accounts of policy meetings
• Hong Kong Monetary Authority (HKMA) declines to enter market, as HKD hits weak end of trading band
• Singapore Monetary Authority (central bank) expected to issue semiannual monetary policy statement and Q1 advance GDP data on Friday
• China Trade Balance is scheduled to be released April 12-13th; March bank lending data may be released later today

Headlines/Economic Data

Japan

• Nikkei 225 opened -0.1%; closed -0.1%
• TOPIX Electric Appliances index -0.8%, Iron & Steel -0.6%, Securities -0.4%
• Takata, 7312.JP To be acquired by Joyson & Pag fund KSS for $1.59B in equity and debt; to be rebranded Joyson Safety Systems
• (JP) Bank of Japan (BOJ Gov Kuroda: Reiterates economy is expected to continue expanding moderately; CPI moving around 1%; affirms to maintain QQE with yield curve control for as long as needed to reach 2% inflation in stable manner
• Toshiba, 6502.JP Likely to miss deadline for China chip sale approval; planning to go ahead with sale to Bain
• (JP) BoJ Executive Dir Maeda: BOJ is moving steadily toward CPI goal; will continue monetary easing persistently, still distant from price target – Parliament
• (JP) Japan MoF sells ¥565B v ¥700B indicated in 0.8% (0.8% prior) 30-yr bonds; Avg yield: 0.714% v 0.75% prior; Bid to cover: 4.34x v 4.24x prior
• (JP) Japan govt said to be looking at new budget balancing goal by mid-2020 – financial press
• (JP) Bank of Japan (BOJ) Regional Report: Cuts assessment for 1 of 9 regions; Raises view in 2 of 9 regions

Korea

• Kospi opened +0.3%
• (KR) South Korea Finance Min Kim: Reiterates South Korea is NOT fx manipulator; spoke with US Treasury Sec Mnuchin over the phone regarding FX policy
• (KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 1.50%; AS EXPECTED
• (KR) BOK Gov Lee: A stronger won could reduce room for policy rate increase; FX rate not the only factor for monetary policy

China/Hong Kong

• Hang Seng opened +0.6%, Shanghai Composite -0.2%
• Hang Seng Info Tech index -1%, Materials -0.8%, Services -0.7%, Property/Construction -0.5%, Financials -0.4%; Energy +2%
• (CN) China may raise Qualified Domestic Limited Partnership (QDLP) quota at the appropriate time – Chinese press
• (CN) China FX Regulator SAFE said to study Qualified Domestic Institutional Investor (QDII) reform
• HK$ touched key HK$7.85 level (low end of band) for the first time since band was implemented in 2005
• (HK) Hong Kong Monetary Authority Comments after HKD hit weak end of trading band: Has not been asked by a bank to purchase HKD at $7.85/USD
• (CN) China PBoC sets yuan reference rate at 6.2834 v 6.2911 prior
• (CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations for 3rd consecutive day; Net: CNY20B drain v CNY20B drain prior
• (CN) PBoC Gov Yi Gang: Q1 data has been a bit better than expected; Belt-Road initiative needs to involve private and sustainable finance – PBOC-IMF Belt and Road Forum
• (CN) China YTD Foreign Direct Investment (FDI): CNY227.5B v CNY139.4B prior; y/y: +0.5% v 0.5% prior
• (CN) China MOFCOM’s Gao: China’s opening is not relevant to US/China trade spat, hope the US does not misjudge the situation. Not a matter of if China willing to negotiate with US, its about US not showing sincerity. US actions so far are typical trade protectionism unilateralism.
• Rusal, [+5.8%], 486.HK Russia ready to provide temporary liquidity to co if needed
• (CN) China said to be planning to raise fuel prices Friday; Gasoline by CNY55/ton; Diesel by CNY50/t – Chinese press

Australia/New Zealand

• ASX 200 opened +0.1%
• ASX 200 REIT index -0.7%, Financials -0.5%; Resources +0.7%, Consumer Discretionary +0.6%, Energy +0.3%
• (NZ) New Zealand Mar Card Spending Retail m/m: 1.0% v 0.5%e; Total m/m: 0.7% v 0.1% prior
• (NZ) New Zealand Govt bans oil exploration; effective immediately – NZ press
• (NZ) RBNZ Assistant Gov McDermott: Including employment into mandate will help flexibility of inflation targeting
• (AU) Australia Apr Consumer Inflation Expectation: 3.6% v 3.7% prior
• (AU) AUSTRALIA FEB HOME LOANS M/M: -0.2% V -0.4%E; INVESTMENT LENDING: 0.5% V 1.4% PRIOR
• (NZ) New Zealand sells NZ$200M in 2.75% 2025 bonds; avg yield 2.6218%; bid to cover 3.02x

Other Asia

• (SG) Singapore Feb Retail Sales M/M: -1.7% v +4.2%e; Y/Y: 8.6% v 4.9%e

North America

• US equity markets ended mostly lower: Dow -0.9%, S&P500 -0.6%, Nasdaq -0.4%, Russell 2000 +0.2%
• S&P500 Financials -1.2%, Health Care -0.8%; Energy +1%
• Costco [CSCO] March US SSS above ests
• (US) FOMC MINUTES FROM MAR 21 MEETING: ALL POLICYMAKERS SAID FURTHER TIGHTENING POLICY LIKELY WARRANTED, ALMOST ALL AGREED GRADUAL APPROACH IS APPROPRIATE
• (US) President Trump tweets ” Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and “smart!” You shouldn’t be partners with a Gas Killing Animal who kills his people and enjoys it!”
• (US) White House Press Sec Sanders: there are a number of options remaining on the table over Syria attack; no final decisions have been made
• (US) TREASURY’S $21B 10-YEAR NOTE REOPENING DRAWS 2.795%; BID-TO-COVER RATIO: 2.46 V 2.50 PRIOR AND 2.48 OVER THE LAST 8
• (US) DOE CRUDE: +3.3M V -0.5ME
• (SY) Bashar Aide: Syria does not fear strike threats by US
• (RU) Russia said to be expecting info on US Syria targets; Russia said to be getting countermeasures on Syria – Russian press
• (MX) Moody’s raises Mexico sovereign outlook to stable from negative; Affirms A3 rating

Europe

• (DE) Germany said to advocate ECB place tougher bad loan standards on banks – press
• (IT) Italy Northern League leader Salvini (euro-skeptic) reportedly may be asked to form a govt next week – press
• (IE) Ireland Central Bank makes ‘small’ upward revisions to 2018 and 2019 GDP growth forecasts – Quarterly Bulletin
• (UK) Mar RICS House Price Balance: 0% v 2%e (ties the lowest since Feb 2013)
• (UK) British Chambers of Commerce (BCC): Domestic demand remains muted, growth being driven by global environment – Quarterly Economic Survey
• Shire [SHP.UK] Takeda Pharam said to be shopping for several trillion yen in loans from banks to acquire Shire – Japan press
• First Group [FGP.UK]: Rejected takeover approach from private equity firm Apollo
• Carrefour [CA.FR]: Reports Q1 Rev €20.8B v €20.9Be

Levels as of 02:00ET

• Hang Seng -0.2%; Shanghai Composite -0.4%; Kospi +0.2%; ASX 200 -0.3%
• Equity Futures: S&P500 +0.2%; Nasdaq100 +0.3%, Dax +0.1%; FTSE100 +0.1%
• EUR 1.2379-1.2356; JPY 106.97-106.70; AUD 0.7772-0.7745;NZD 0.7376-0.7354
• Jun Gold -0.5% at $1,353/oz; May Crude Oil +0.4% at $67.06/brl; May Copper -0.8% at $3.09/lb