USD Index Extends Drop

General trend

• Nikkei has underperformed, continued to decline following the lower open; the index is currently near the lows [USD/JPY declined overnight; Automakers track declines seen in the US (Subaru and Toyota commented on chip shortages)].
• Topix Real Estate, Electric Appliances, Air Transportation and Insurance indices were also among the decliners in Japan; Marine Transportation index rises.
• S&P ASX 200 has moved lower after the flat open, currently trades near the worst levels [Financial, Consumer Staples and Resources indices are among the decliners].
• Australian production updates have been in focus [Rio Tinto and Lynas decline; Western Areas rises]; Challenger Ltd drops over 14% on guidance.
• BHP is due to issue Q3 production update on Wed (April 21st).
• Shanghai Composite ended the morning session modestly higher after the lower open [Consumer indices outperformed].
• Hang Seng and HK TECH indices pared decline [Meituan moved between gains and losses after announcing multi-billion dollar capital raise]; Li Ning rose after Q1 update; China Tower declined after Q1 results, China Mobile is due to report later today.
• NZD rises ahead of Q1 CPI data due on Wed (April 21st).
• Companies due to report during the NY morning include Abbott Labs, AutoNation, Comerica, Dover Corp, Fifth Third Bancorp, Johnson & Johnson, Lockheed Martin, Manpower, Northern Trust, Omnicom, Procter & Gamble, Philip Morris, Travelers, Xerox.

Headlines/Economic data

Australia/New Zealand

• ASX 200 opened 0.0%
• RIO.AU Reports Q1 Pilbara iron ore shipments 77.8Mt v 72.9Mt y/y; Pilbara iron production 76.4Mt v 77.8Mt y/y; Affirms all guidance.
• LYC.AU Reports Q3 NdPr production 1.4Kt v 1.4Kt y/y; REO production 4.5Kt v 4.5Kt y/y; Avg selling price A$35.50/kg (record high) v A$19.80/kg y/y.
• (AU) RESERVE BANK OF AUSTRALIA (RBA) MEETING MINUTES: REITERATES WOULD FURTHER EXTEND BOND BUYING IF ASSISTS MEETING GOALS; ECONOMY STILL HAS SPARE CAPACITY, UNEMPLOYMENT TOO HIGH; Return to pre-COVID level occurs earlier than originally expected.

Japan

• Nikkei 225 opened -1.1%
• (JP) Bank of Japan (BOJ) said to be considering cutting CPI forecast for FY21/22, mostly due to price cuts to mobile phone fees – Nikkei.
• (JP) Said that China Military has conducted multiple cyber attacks on Japan – Press.
• (JP) Bank of Japan (BOJ) Gov Kuroda: Reiterates will take time to reach 2.0% CPI Target.
• (JP) Japan Econ Min Nishimura: Strong sense of crisis on coronavirus spread; Will consider Osaka State of emergency if formal request made.
• (JP) Japan Former Fin Min Azumi: Japan needs to consider canceling Olympics; More vaccinations are needed in-country.
• (JP) Japan MoF sells ¥1.2T v ¥1.2T indicated in 0.5% 20-year JGBs: avg yield: 0.4380% v 0.5130% prior; bid to cover 3.34x v 3.40x prior.

Korea

• Kospi opened 0.0%
• (KR) South Korea Vice Fin Min: WIll focus on managing risks that can come from global interest rate increases.
• 064350.KR Speculated that Siemens is interested in buying a stake – Korean press.

China/Hong Kong

• Hang Seng opened -0.5%; Shanghai Composite opened -0.3%.
• 3690.HK To place 187M existing shares owned by Tencent at HK$273.80/shr (~3.2% of existing issued capital); Tencent to also purchase ~11.4M new shares issued by the co. (~0.2% of issued share capital); To issue ~$2.98B in convertible bonds due 2027 and 2028.
• (HK) Hong Kong chief Exec Lam: See 2021 GDP at 3-5%, there have been many challenges over recent years, seems the worst time is over – local media.
• (CN) China PBOC sets Yuan reference rate: 6.5103 v 6.5233 prior.
• (CN) China PBOC Open Market Operation (OMO): Injects CNY10B in 7-day reverse repos v CNY10B in 7-day reverse repos prior; Net CNY0B v Net CNY0B prior.
• (CN) CHINA PBOC MONTHLY LOAN PRIME RATE (LPR) SETTING: LEAVES BOTH 1-YEAR AND 5-YEAR RATES UNCHANGED (12TH CONSECUTIVE MONTH OF STEADY RATES).
• (CN) China President Xi: China has kept deepening reform and opening up – Boao Forum.

Other

• 2317.TW Foxconn Chairman Young Liu: Expects component shortage to ease in Q2 2022.

North America

• TSLA CEO Musk: Data logs recovered so far [in Texas crash] show Autopilot was not enabled & this car did not purchase full-self driving; moreover, standard Autopilot would require lane lines to turn on, which this street did not have.
• TSLA Follow Up: On Tuesday investigators are expected to serve search warrants on Tesla, the investigators are seeking to obtain all of the data from the vehicle that crashed in Texas – financial press.
• WHR Raises dividend 12% to $1.40 from $1.25 (indicated yield 2.38%); Announces has added $2.0B to share repurchase (13.6% of market cap).

Europe

• (DE) Germany CDU leader Laschet has won the vote in the CDU Leadership Committee (becomes a candidate to replace Merkel) – US financial press.
• (DE) Said that EU Will impose antitrust fines on certain German auto manufacturers – Press.

Levels as of 01:15ET

• Hang Seng +0.1%; Shanghai Composite +0.4%; Kospi +0.4%; Nikkei225 -2.1%; ASX 200 -0.7%.
• Equity Futures: S&P500 +0.2%; Nasdaq100 +0.2%, Dax 0.0%; FTSE100 -0.1%.
• EUR 1.2072-1.2033; JPY 108.31-107.97; AUD 0.7801-0.7753; NZD 0.7219-0.7173.
• Commodity Futures: Gold +0.1% at $1,772/oz; Crude Oil +1.0% at $64.06/brl; Copper +0.9% at $4.28/lb.