General Trend:
- Telecom and IT firms underperform in Shanghai after US gov’t targets more Chinese tech companies
- Consumer Discretionary, Energy and Financial firms are among the gainers in Australia
- Cansino Biologics [6185.HK] moves between gains and losses after data presentation on coronavirus vaccine.
- Equity futures rise amid holidays in US and UK, Asian indices generally open higher, with only Hong Kong swinging between gains and losses as tensions increase between HK and China over China wanting to assert more control over the city state.
- Japan lifts state of emergency, airlines stronger on the news, Econ Min noted that one was not needed anywhere in Japan at this point
- Japan compiling a second extra budget see ~¥100T
- BOK to hold rate decision May 28th where it is expected to announce a rate cut
- UK Chancellor of the Exchequer (Fin Min) Sunak authorized bailout plan for “strategically important” companies; Govt to buy stakes in these companies who are facing acute financial difficulties – FT
- Germany Fin Min Scholz denies press report of €150B stimulus program in Germany
- Reminder US markets are closed on Monday for holiday, it is also a bank holiday in UK
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.3%
- (NZ) New Zealand government said it is considering a national unemployment insurance program, to also make temporary tax-free payments to people who lost their jobs due to coronavirus – US financial press
- (AU) Reserve Bank of Australia (RBA) adds A$726M to banking system through repos vs A$1.91B prior
- (NZ) Reserve Bank of New Zealand (RBNZ) buys NZ$400M v NZ$450M prior in government bonds as part of QE (NZ$400M sought)
- (AU) Analysts note that Reserve Bank of Australia (RBA) may increase its purchases to buffer the impact of A$46B in repos maturing in June
- (AU) Australia sells A$2.0B v A$2.0B indicated in 2.25% Nov 2022 bonds, avg yield 0.2384%, bid to cover 4.53x
- (AU) Reserve Bank of Australia (RBA) skips offering to buy bonds for 8th consecutive session
- YOW.AU Proposes capital return to shareholders equal to A$0.04/share
Japan
- Nikkei 225 opened +1.3%
- (JP) Japan said to be considering second extra budget worth >¥100T ($929B); expected to include ¥60T to expand low-interest loan scheme for companies, ¥27T for other financial aid programs – Nikkei
- (JP) Follow Up: Tokyo, Japan considering opening shopping malls and theaters before the end of May
- (JP) Japan Econ Min Nishimura: Reiterates seeking expert opinion on ending state of emergency, avoid travel to other prefectures through May 31, emergency declaration is no longer needed in any region of the country
- (JP) Japan Econ Min Nishimura: Panel approves declaration to lift emergency
- (JP) Japan Health Min Kato: Will start anitbody testing on 10K people in June
- (JP) Japan Fin Min Aso: Expect unemployment rate to go up a little in May; bottom hasn’t fallen out of Japan’s economy – speaking to Diet
Korea
- Kospi opened +0.5%
- (KR) North Korea leader Kim presided over key party meeting to talk about increasing nuclear was deterrence – Yonhap
- (KR) South Korea Govt announced plan to require high-risk entertainment establishments like clubs and bars to keep a quick response (QR) code-based customer register, starting in June – Yonhap
- (KR) South Korea reports additional 11 coronvirus cases, total 11,206; 1 additional death, total 267
- (KR) Analysts expect Bank of Korea (BOK) to cut rates at this weeks meeting – Yonhap
China/Hong Kong
- Hang Seng opened -0.9%; Shanghai Composite opened +0.1%
- (HK) Protesting in Hong Kong return after China move to implement national security laws in Hong Kong (announcement made at NPC) – press
- (HK) Hong Kong Govt: Foreign politicians’ criticisms are alarmist speculation (re national law)
- (CN) China President Xi: Need to analyze China’s economic situation from a comprehensive, dialectical and long-term perspective, should be efforts to foster new opportunities amid challenges and make new advances amid changes – speaking Sat from NPC
- (CN) China Foreign Min Wang Yi: ‘Political virus’ is spreading in US along with Covid-19; US and China should look for ways to avoid a new cold war – annual press conference
- (CN) China National Development and Reform Commission (NDRC) Chairman: confident that May economic data will show improvement in consumption
- Various Chinese companies commented on being added to US blacklist, all noting their operations would not be impacted, most noting they have no business in the US
- (CN) China National Health Commission Coronavirus Update for May 24th: 11 additional cases (11 imported v 2 prior) v 3 prior; Additional deaths: 0 v 0 prior; Additional Asymptomatic cases: 40 v 36 prior
- (CN) China PBOC sets Yuan reference rate: 7.1209 v 7.0939 prior (weakest fix since Feb 2008)
- (CN) China PBoC Open Market Operation (OMO): Skips Reserve Repo Operations for the 37th consecutive session; Net CNY0B v CNY0B prior (longest consecutive skips since 2016)
- (CN) China National Development and Reform Commission (NDRC) Official Ning Jizhe: A certain level of growth is still crucial for the economy and to realize a series of economic and social development goals – speaking from sidelines of NPC
- (CN) China State Council Research Office Dir Huang Shouhong: There was intense debate on whether to drop the 2020 GDP target or not; final decision was made to free local governments from the burden of a numeric target and to encourage them to focus on protecting jobs, livelihoods and small businesses but growth cannot be allowed to go into a free fall – speaking from NPC
Other
- (TW) Taiwan dismisses China Foreign Min call for unification – press
North America
- (US) US State Nevada Gov setting June 4th as re-opening date for casinos – press
- (CN) US White House National Security Adviser Robert O’Brien said the US government will likely impose economic sanctions on Hong Kong and China if China moves ahead with national security law for HK – NBC
- BAYN.DE Said to have reached deals on a large number of the 125K Roundup lawsuits in the US, agreements are part of $10B plan to end all claims – press
Europe
- (UK) Chancellor of the Exchequer (Fin Min) Sunak authorized bailout plan for “strategically important” companies; Govt to buy stakes in these companies who are facing acute financial difficulties – FT
- (DE) Germany Fin Min Scholz denies press report of €150B stimulus program in Germany
- (FR) France reports 115 additional coronavirus cases, total 144.9K, Additional deaths 35, total 28.4K (smallest daily increase in cases since lockdown began on March 17th)
Levels as of 1:15ET
- Hang Seng -0.9%; Shanghai Composite +0.1%; Kospi +1.1%; Nikkei225 +1.5%; ASX 200 +1.7%
- Equity Futures: S&P500 +0.4%; Nasdaq100 +0.5%, Dax +0.3%; FTSE100 +0.3%
- EUR 1.0909-1.0888; JPY 107.78-107.56; AUD 0.6550-0.6522; NZD 0.6109-0.6084
- Commodity Futures: Gold -0.5% at $1,727/oz; Crude Oil +1.0% at $33.56/brl; Copper +0.0% at $2.39/lb
