Asia Market Update: Asian markets trade mixed with many countries closed for holiday; Oil-related currencies decline, OPEC+ has yet to reach an agreement and the status of Friday’s meeting is not clear; China inflation eases more than expected.
General Trend:
- The Thursday OPEC+ meeting ended without an agreement, Mexico said to have left the meeting without approving any production cut agreement
- Delegate: OPEC+ will not hold a new meeting on Friday (April 10th), will not cut production without Mexico
- Mexico: Ready to cut production by 100K bpd [Note: OPEC+ ministers were said to be trying to convince Mexico to cut its production by 400K bpd vs Oct 2018 levels]
- G20 Energy Ministers are scheduled to hold an extraordinary virtual meeting on April 10th, meeting to focus on energy market stability.
- Boeing said to consider cutting its workforce by 10% (implies ~16K jobs)
- Japanese equities move higher, banks and real estate firms are among the gainers
- Fast Retailing (largest Nikkei component) rises over 1% after H1 results
- Shanghai Composite declines by less than 1% in early trading, sectors moving lower include IT and Telecom Services
- US DOJ recommends revoking China Telecom’s authorization to provide international telecom services to and from the US (press); ZTE declines by over 4% in Shenzhen
- Taiwan’s Largan (Apple supplier) declines by over 2% after issuing Q1 results
- Large DRAM firm Nanya Technology is expected to report Q1 results later today
Headlines/Economic Data
Australia/New Zealand
- ASX 200 closed for holiday
- (AU) Strong demand has been seen for the Australia government program which lets individuals access their pensions early – Local press
Japan
- Nikkei 225 opened +0.8%
- (JP) JAPAN MAR PPI (CGPI) M/M: -0.9% V -0.6%E; Y/Y: -0.4% V -0.1%E
- (JP) Tokyo, Japan Gov Koike: Will announce business closure requests today; To announce subsidies for cooperation
- 9983.JP Reports H1 Net ¥100.5B v ¥114.0B y/y, Op ¥136.7B v ¥172.9B y/y, Rev ¥1.21T v ¥1.27T y/y; Cuts guidance
- 3382.JP Reports FY19/20 Net ¥218.2B v ¥203.0B y/y, Op ¥424.3B v ¥411.6B y/y, Rev ¥6.64T v ¥6.79T y/y, does not guide
- (JP) Japan Fin Min Aso: important to exchange opinions at G20 meeting next week, will clearly explain Japan’s actions at the meeting – speaking to Parliament
Korea
- Kospi opened +0.0%
- (KR) South Korea sells 50-year bonds: avg yield 1.55% v 1.63 prior
- (KR) North Korea leader Kim directed an artillery drill – KCNA
- 020560.KR China regulators approve HDC acquisition of Asiana Airlines – press
China/Hong Kong
- Hang Seng closed for holiday; Shanghai Composite opened +0.1%
- ZTE [763.HK]: Nonexecutive Director Bao resigns after alleged sexual offense
- (CN) CHINA MAR CPI M/M: -1.2% V +0.8% PRIOR; Y/Y: 4.3% V 4.9%E (slowest y/y growth since Oct 2019); PPI Y/Y: -1.5% v -1.1%E
- (CN) China PBOC sets Yuan reference rate: 7.0354 v 7.0536 prior (strongest fix since March 18th)
- (CN) China PBoC Open Market Operation (OMO): Skips Reserve Repo Operations for the 7th consecutive session; Net CNY0B v CNY0B prior
- (CN) China Finance Ministry (MOF) sells 30-year bonds: yield 3.2880% v 3.18%e (vs 3.39% prior); bid to cover 3.1x v 1.5x prior
- (CN) Phase II clinical trials for the first SARS-CoV-2 vaccine (Ad5-nCov) in China to begin ‘soon’ – Chinese press
- (HK) Hong Kong Govt announces new HK$137.5B in measures to support coronavirus impact: HK$80B to help companies pay salaries; HK$20B to aviation industry (after the close yesterday)
Other
- It was reported on Thursday that a production cut agreement by OPEC+ may cut oil production by 10M bpd – FT
North America
- US President Trump: Close to deal on OPEC output cuts, “We will see what happens”; Had a very good call with Russia and Saudi Arabia; Expects announcement from Russia/Saudi Arabia; US could do something where US only uses its own oil; Needs to be an oil price minimum so companies do not shut down
- (US) FED TAKES ADDITIONAL STEPS TO PROVIDE $2.3T IN LOANS TO SUPPORT ECONOMY; TO OFFER $600B IN LOANS THROUGH ‘MAIN STREET LENDING PROGRAM’; TO INCREASE PRIMARY AND SECONDARY MARKET CORPORATE CREDIT FACILITIES; TO SUPPORT STATE AND CITY FINANCES WITH $500B FACILITY
- (US) Fed Chair Powell: economy’s performance will be dictated by how virus evolves; there’s really no limit to Fed lending as long as it’s agreed upon with Treasury and supported by the law – Q&A
- (US) President Trump has completed meeting with meeting with US treasury Sec Mnuchin and airlines; To continue discussions with airlines over weekend
- (US) President Trump: We are at the top of the hill with coronavirus; 19 Drugs in trial at the moment, 26 active planning for trial – daily press conference briefing
- (US) CDC Director Redfield: US is coming to peak of coronavirus cases; We will see substantial infection decline as we reopen economy
- (US) US Agriculture Sec Perdue: USDA plans to make direct payments to farmers
Europe
- (EU) EU Fin Mins of Germany, France, Italy, Spain and the Netherlands agree to a €500B economic support package
- (UK) PM Boris Johnson said to be out of ICU and in good spirits – press – Remains in hospital for close monitoring
Levels as of 1:20 ET
- Nikkei 225, +0.4%, ASX 200 closed, Hang Seng closed; Shanghai Composite -1%; Kospi +0.9%
- Equity Futures: S&P500 closed; Nasdaq100 closed, Dax closed; FTSE100 closed
- EUR 1.0944-1.0920; JPY 108.59-108.32 ; AUD 0.6349-0.6312 ;NZD 0.6092-0.6010
- Gold closed; Crude Oil closed; Copper closed
