General Trend:
- Hang Seng drops over 3% upon return from 2 day holiday, gaming companies decline after data showed revenue drop accelerated in April; Financials and Energy companies also trade broadly lower in HK
- China equity Futures decline by over 4% vs last cash close on Thursday
- Markets in Shanghai are closed May 1-5th
- Sectors moving higher in Australia include Consumer Staples and Financials; Westpac rises after initially declining on earnings and dividend announcement
- Japan markets to be closed for Golden Week holiday on May 4-6th
- Offshore yuan (CNH) declined to 6-week low before rebounding
- Commodity currencies trade generally weaker in the face of lower bond yields, equity declines and drop in oil prices.
- April PMI manufacturing data hits record lows in various Asian countries (Indonesia, Malaysia, Philippines)
- Hong Kong Q1 advance GDP data due later today (economy expected to remain in recession)
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened 0.0%
- WBC.AU Reports H1 (A$) Cash profit 993M (ex-items 2.28B) v 3.18B y/y, Net interest income 9.0B v 8.26B y/y, Net Op Rev 10.6B v 9.9B y/y; defers decision on dividend
- (AU) Reserve Bank of Australia (RBA): Excess cash at exchange settlement (ES) accounts at A$60.6B v A$63.7B prior
- (AU) AUSTRALIA MAR BUILDING APPROVALS M/M: -4.0% V -15.0%E
- (AU) Reserve Bank of Australia (RBA) adds A$1.83B to banking system through repos v A$520M prior
- (NZ) Reserve Bank of New Zealand (RBNZ) buys NZ$450M v NZ$450M prior in government bonds as part of QE operation
- (AU) Australia Apr Melbourne Institute Inflation m/m: -0.1% v +0.2% prior; y/y: 1.2% v 1.5% prior
- (AU) Australia sells A$1.5B v A$1.5B indicated in 3.25% April 2025 bonds, avg yield 0.3888%, bid to cover 5.43x
- (AU) Reserve Bank of Australia (RBA) offers to buy total of A$500M in bonds v skips prior
- (AU) Australia Apr ANZ Job Advertisements m/m: -53.1% v -10.0% prior (largest decline on record)
- (NZ) Reserve Bank of New Zealand (RBNZ) To offer term lending facilities to banks starting May 26th
Japan
- Nikkei 225 closed for holiday, re-opens May 7th
- (JP) According to Japan press, PM Abe to will extend state of emergency due to coronavirus to May 31st
- (JP) Japan Econ Min Nishimura: Confirms wants panel to discuss emergency extension through May 31; Wants to maintain the regional framework for emergency in Japan
- (JP) Japan Panel recommends extension of state of emergency until May 31st (as expected)
Korea
- Kospi opened -2.1%
- (KR) North Korea leader Kim makes first public appearance in 20 days amid reports of his failing health – South Korean press
- (KR) SOUTH KOREA APR CPI M/M: -0.6% V -0.3%E; Y/Y: 0.1% V +0.4%E; CPI Core Y/Y: 0.3% v 0.4%e (lowest since Nov 1999)
- (KR) North Korea reported to have shot at and hit South Korea border guard post, No casualties reported – Yonhap
- (KR) South Korea Apr PMI Manufacturing: 41.6 v 44.2 prior (lowest reading since Jan 2009, 4th consecutive contraction)
China/Hong Kong
- Hang Seng opened -3.0%; Shanghai Composite closed for holiday
- (CN) US President Trump: Tariffs would be the “ultimate” punishment on China; If China doesn’t buy US goods, US will end deal
- (CN) China National Health Commission Coronavirus Update for May 3rd: 3 additional cases ( 3 imported v 1 prior) v 2 prior; Additional deaths: 0 v 0 prior; Additional Asymptomatic cases: 13 v 12 prior
- (CN) China PBOC Gov Yi Gang: China Economic recovery from coronavirus pandemic better than expected – China Press
- (CN) China PBOC approves Baoshang Bank to transfer assets, liabilities and business (first takeover of commercial bank by China since 1998) – press
- (CN) Chinese Academy of Fiscal Sciences President Liu Shangxi: Massive fundraising effort necessary to offset ‘unprecedented’ impact of coronavirus pandemic; PBOC should look to raise up to CNY5.0T from the sale of special bonds – SCMP
- (HK) Hong Kong Exchange Fund Q1 Investment loss HK$86.1B v profit HK$120.9B y/y
- (HK) Hong Kong monetary Authority (HKMA) Deputy Chief Yuen: HK banks will face pressure on higher credit costs this year although asset quality remains healthy
Other
- (PH) Philippines Apr PMI Manufacturing: 31.6 v 39.7 prior (record low, 2nd consecutive month of contraction)
North America
- BRK.A Reports Q1 Net EPS (Class A) -$30,653 v +$13,209 y/y, Rev $61.3B v $60.7B y/y; sells entire stakes in all airlines
- BA Said to have found debris mistakenly left behind by workers in fuel tanks or other interior spaces of ~50% of the MAX aircraft it inspected – financial press
- (US) President Trump: We can have it both ways, open economy and stay safe; Will do more to help Americans; Will not do more stimulus without a payroll tax cut – Fox Town Hall
Europe
- (UK) Govt backed loan program, “Bounce Back Loans”, to help small businesses survive the coronavirus lock down goes into effect Monday, May 4th
Levels as of 1:15ET
- Hang Seng -4.2%; Shanghai Composite closed; Kospi -2.2%; Nikkei225 closed; ASX 200 +1.1%
- Equity Futures: S&P500 -0.9%; Nasdaq100 -1.0%, Dax -2.7%; FTSE100 -0.7%
- EUR 1.0975-1.0935; JPY 106.94-106.67; AUD 0.6413-0.6373; NZD 0.6058-0.6008
- Commodity Futures: Gold +0.4% at $1,708/oz; Crude Oil -5.9% at $18.62/brl; Copper -0.8% at $2.29/lb
