General Trend:
- China’s NPC is expected to approve the HK national security proposal today (May 28th)
- South Korean chipmakers rise after guidance from Micron
- Australia’s Financials index rises over 4%; Some analysts have noted the prior underperform of the sector, easing of lockdown measures
- Gaming, Property and Tech firms are among the early decliners in HK; Financials trade mixed
- Iron/Steel and Banks are among the sectors moving higher in Japan
- Japanese automakers rise ahead of earnings from Nissan, US automakers rose on Wed’s session
- Financials outperform in early trading in Shanghai amid continued liquidity injections from the PBOC; Telecom services companies lag after court ruling related to Huawei’s CFO
- Singapore Telecom drops on lowered dividend
- Twitter declines over 2% in afterhours trading, Trump expected to unveil executive order related to social media; Nasdaq FUTs lag in Asia
- Roche [ROG.CH]: Initiates phase III clinical trial of Actemra/RoActemra plus remdesivir in hospitalised patients with severe COVID-19 pneumonia
- RBA Gov: Economic downturn might not be as severe; Decline in jobs may be 15% instead of original 20% projection
- Korean yields decline as BoK cut rates by 25bps
- BOK Gov: Rates are now very close to the effective lower bound
- South Korea reports daily coronavirus cases hit a 2-month high amid rise in cases at logistics center
- China Premier Li Keqiang is due to meet the press on Thursday (May 28th) afternoon (8 GMT) following the conclusion of the 13th NPC
- China’s Commerce Ministry (MOFCOM) sometimes holds weekly news conferences on Thursday
Australia to sell 2025 bonds on Friday
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.4%
- (AU) AUSTRALIA Q1 PRIVATE CAPITAL EXPENDITURE Q/Q: -1.6% V -2.6%E
- SML.NZ Cuts 2019/20 base milk price to $7.05/kgMS (prior $7.25)
- (AU) Reserve Bank of Australia (RBA) Gov Lowe: Evidence that Mid March economic package is working as expected; Health outcomes better than expected, Economic downturn might not be as severe – speaking in parliament
- (NZ) Reserve Bank of New Zealand (RBNZ) Financial System Policy Head Fiennes: Negative official cash rate (OCR) would not pose major stability concerns; RBNZ has scope to increase lending to banks if needed, could tweak capital buffer transition period if needed, will not change decision on capital levels
Japan
- Nikkei 225 opened +0.9%
- After the close yesterday Japan confirmed details of extra budget
- (JP) Japan Investors Net Buying of Foreign Bonds: -¥432.9B v -¥463.5B prior week; Foreign Net Buying of Japan Stocks: +¥75.4B v -¥223.2B prior week
- (JP) Japan MoF sells ¥2.0T v ¥2.0T indicated in 0.10% 2-year JGBs, avg yield: -0.172% v -0.140% prior, bid to cover: 5.28 x v 5.43x prior
Korea
- Kospi opened +0.8%
- (KR) BANK OF KOREA (BOK) CUTS 7-DAY REPO RATE 25BPS TO 0.50%; AS EXPECTED (fresh record low); cuts outlook for CPI and GDP; raises 2021 GDP outlook
- (KR) South Korea Fin Min Hong: Govt and auotmakers to set up guarantee fund of KRW500B to provide more loans to auto parts firms that have been hit by virus; public sector will buy 9,500 cars by the end of September to prop up auto parts firms – Yonhap
- (KR) South Korea reports 79 additional coronavirus cases (2-month high); 0 additional deaths
China/Hong Kong
- Hang Seng opened -0.4%; Shanghai Composite opened +0.1%
- HUAWEI.CN Canadian Judge: US charges against CFO Meng are also crimes in Canada; US has met the legal test to seek Meng’s extradition
- (HK) China Embassy in US: Reiterates Hong Kong affairs are internal; US Security Legislation is “very narrow”; China will take necessary counter measures
- (CN) China National Health Commission Coronavirus Update for May 27th: 2 additional case (2 imported v 1 prior) v 1 prior; Additional deaths: 0 v 0 prior; Additional Asymptomatic cases: 27 v 28 prior
- (CN) China PBOC sets Yuan reference rate: 71277. v 7.1092 prior
- (CN) China PBoC Open Market Operation (OMO): Injects CNY240B in 7-day reverse repos v injects CNY120B in 7-day reverse repos prior; Net injection CNY240B v CNY120B prior
- (HK) Hong Kong Legislative council adjourns with tensions reported between pro democracy and pro establishment lawmakers – financial press
North America
- (US) Weekly API Crude Oil Inventories: +8.7M v -4.8M prior
- BA Resumes 737 MAX production at its Renton, WA facility; production to gradually ramp up this year – press
- (HK) Trump administration reportedly mulling suspending Hong Kong’s preferential US Tariff rate for exports to US as a response to new planned securities law – press
- (US) Sec of State Pompeo: announces that US can no longer certify Hong Kong autonomy from China; says no reasonable person can assert today that Hong Kong maintains high degree of autonomy from China given facts on the ground
- (US) White House: President Trump will sign a social media Executive order on May 28th
- (HK) US Mission to UN seeking Security Council meeting on Hong Kong – press
Europe
- (PT) Portugal PM Costa: Portugal will approve economic stabilization plan next week; supplementary budget will be presented in the first half of June
- (EU) UK PM Johnson reported to meet with European Leaders in Brussels next week (1st in person visit) to discuss Brexit terms – press
Levels as of 1:15ET
- Hang Seng -1.8%; Shanghai Composite -0.5%; Kospi -0.4%; Nikkei225 +1.8%; ASX 200 +1.4%
- Equity Futures: S&P500 +0.2%; Nasdaq100 -0.3%, Dax +0.4%; FTSE100 +1.1%
- EUR 1.1035-1.1000; JPY 107.91-107.69; AUD 0.6636-0.6589; NZD 0.6194-0.6173
- Commodity Futures: Gold +0.1% at $1,713/oz; Crude Oil -3.4% at $31.66/brl; Copper +0.1% at $2.39/lb
