PBOC Gov Yi Echos Xi Comments On China Opening Measures

Apr 11 18, 06:20 GMT

General Trend:

Asian equity markets trade mixed following Tuesday’s gains: Trade remains on the radar, along with Syria and US politics
Energy shares gain, track Tuesday’s rise in oil prices
Softbank rises over 4% amid renewed merger speculation between Sprint and T-Mobile
PBoC Gov Yi Gang suggests yuan depreciation will not be used as trade tool, gives date for previously announced moves to open up financial sector; comments on US/China interest rate differential
China announced plans to expand daily quota for China/Hong Kong stock link program
China aims to start Shanghai-London stock connect within 2018.
China Vice Fin Min says previously announced cuts in import tariffs on autos and other products to be implemented ‘as early as possible’
China March CPI and PPI slow amid easing of Lunar New Year impact
Japan March Banking Lending slows to 5-year low; Feb machine orders unexpectedly rise
RBA Gov Lowe reiterates no strong case for near-term policy adjustment, next rate move likely to be up; notes potential trade risks
US March CPI and Fed FOMC Minutes due for release later on Wednesday

Headlines/Economic Data

Japan

Nikkei 225 opened +0.1%; closed -0.5%
TOPIX Retail Trade index -2%; Securities +1.6%, Iron & Steel +0.9%
(JP) Moody’s Report: Japan aging population poses both near-term and long-term credit challenges
(JP) Japan Feb Core Machine Orders M/M: +2.1% v -2.5%e; Y/Y: 2.4% v 0.0%e
(JP) JAPAN MAR PPI (CGPI) M/M: -0.1% V -0.1%E; Y/Y: 2.1% V 2.0%E
(JP) Japan Mar Bank Lending Ex-Trusts Y/Y: 1.9% v 2.1% prior; Incl Trusts Y/Y: 2.0% v 2.1% prior
(JP) Japan researchers find 16M tons of rare earth deposits, equivalent to a few hundred years of global consumption – Nikkei
Looking ahead: Bank of Japan (BoJ) Gov Kuroda may speak on Thursday
(JP) Former Japan lawmaker Shizuka Kamei plans to visit North Korea in May in order to hold talks with top leaders – Japanese Press

Korea

Kospi opened +0.2%
(KR) South Korea Mar Unemployment Rate: 4.0% v 3.6%e (prior 3.6%)
(KR) South Korea Feb M2 Money Supply m/m: 0.5% v 1.3% prior; y/y: 6.2% v 5.5% prior; L Money Supply m/m: 0.5% v 1.0% prior; y/y: 6.8% v 6.8% prior
Looking Ahead: Bank of Korea (BoK) interest rate decision expected on Thursday (unchanged expected)

China/Hong Kong

Hang Seng opened +0.1%, Shanghai Composite +0.2%
Hang Seng Energy index +2.4%, Financials +1.4%, Info Tech +0.8%; Telecom -0.9%, Consumer Goods -0.8%
Shanghai Composite Property Sub-index rises over 1%
(CN) China Researcher: Need to be wary of structural inflation risks – China Daily
(CN) PBoC Gov Yi Gang: Will not allow yuan to depreciate
(CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations for 2nd consecutive day; Net: CNY20B drain v CNY30B drain prior
(CN) China PBoC sets yuan reference rate at 6.2911 v 6.3071 prior
(CN) PBoC Gov Yi Gang: Interest rate differential with the US is in ‘comfortable range’; to implement opening policies by June 2018
(CN) China Commerce Ministry (MOFCOM) sees Q1 retail sales up ~10% y/y – financial press
Rusal, 486.HK Said to have asked customers to pay in Euros and not Dollars in order to get around US sanctions – financial press
(CN) CHINA MAR CPI M/M: -1.1% V 1.2% PRIOR; Y/Y: 2.1% V 2.6%E; PPI Y/Y:3.1% V 3.3%E
(CN) Asia Development Bank (ADB): Raises China 2018 GDP growth forecast to 6.6% v 6.4% in Dec

Australia/New Zealand

ASX 200 opened +0.1%
ASX 200 Utilities index -1.6%, Telecom -1.3%, Consumer Discretionary -1.1%, Financials -1%, REIT -0.7%; Energy +1.3%, Resources +1.1%
(AU) RBA Gov Lowe: Reiterates next rate move likely to be up not down, may come as a shock as it will be first one in 7-yrs; no argument to change policy currently
(AU) Australia buys back A$600M in 2019 and 2020 bonds
South32, S32.AU Colombia court ruled that water emissions from Cerro Matoso nickle project cause locals to suffer health issues including cancer – AFR
(AU) Australia Apr Westpac Consumer Confidence Index: 102.4 v 103.0 prior; M/M: -0.6% 0.2% prior
(AU) Australia to implement new laws on cryptocurrency
(AU) Australia sells A$600M v A$600M indicated in 2.75% Nov 2028 bonds, avg yield 2.7069% v 2.7124% prior, bid to cover 4.25x v 4.46x prior
(AU) Australia Mar TD Inflation Gauge m/m: +0.1% v -0.1% prior
(NZ) New Zealand to probe steel dumping allegations related to China and Malaysia
Looking Ahead: RBNZ Assistant Gov McDermott expected to give speech on inflation targeting on Thursday

North America

US equity markets ended higher: Dow +1.8%, S&P500 +1.7%, Nasdaq +2.1%, Russell 2000 +1.9%
S&P500 Energy +3.3%, Technology +2.5%
VirnetX [VHC] Texas Court rules Apple to pay $502.6M to VirnetX in Patent case; +41% after hours
Hilton [HLT] Prices upsized offering of $1.50B (prior $500M) in 5.125% senior notes due 2026 (6.2% of market cap)
(US) US President Trump said to consider firing Deputy AG Rosenstein – US Media
(US) Fed’s Bostic (FOMC voter, dove): Does not comment on monetary policy in initial remarks
(US) White House press sec Sanders: Encouraged by President Xi comments on trade but want to see concrete actions
(CN) Pres Trump: “Very thankful for President Xi of China’s kind words on tarrifs and automobile barriers…also, his enlightenment on intellectual property and technology transfers. We will make great progress together!”
(US) Trade officials in the US are concerned that some companies are enabling steel producers in China to avoid the US tariffs – US financial press
(US) TREASURY’S $30B 3-YEAR NOTE AUCTION DRAWS: 2.450%; BID-TO-COVER RATIO: 2.85 V 3.94 PRIOR AND 2.91 OVER THE LAST 12 AUCTIONS
(US) Weekly API Oil Inventories: Crude: +1.8M v -3.3M prior

Europe

(EU) ECB spokesperson: Nowotny’s views are his own and do not represent the view of the Governing Council [Note: Nowotny stated that it was too early to say when rate hikes would begin but could start the process with 20bps hike in Deposit Rate to -0.20%]
(FR) France Fin Ministry: sees 2018 GDP growth at 2%, 2019 at 1.9%, and 2020-2022 at 1.7%
21st Century Fox [FOXA]: European Commission reportedly raids Fox HQ in London; Fox says it is cooperating – press
Rusal [RUALR.RU]: Reportedly to begin asking customers to pay in Euros – press
Looking Ahead: ECB President Draghi is expected to speak

Levels as of 02:00ET

Hang Seng +0.8%; Shanghai Composite +0.8%; Kospi -0.2%; ASX 200 -0.5%
Equity Futures: S&P500 -0.5%; Nasdaq100 -0.4%, Dax -0.2%; FTSE100 -0.0%
EUR 1.2370-1.2353; JPY 107.23-106.97; AUD 0.7769-0.7748;NZD 0.7375-0.7346
Jun Gold -0.0% at $1,345/oz; May Crude Oil -0.2%at $65.36/brl; May Copper -0.8% at $3.11/lb