Auto Sector Jumps On China Plans To Cut Import Tariff

May 23 18, 07:31 GMT

General Trend:

Asian equity markets trade generally lower, in line with US session; Upcoming FOMC minutes in focus
Barclays said to explore possible merger with Standard Chartered (FT)
China coal producers drop after price warning, auto dealers rise as China confirmed plan to reduce auto import tariff
Australian energy producer Santos declines over 9%, rejected $10.9B bid from Harbour Energy
New Zealand milk giant Fonterra down over 7% after outlook
Steel & Tube drops over 20% on profit warning, breach of debt covenant
South Korean chipmakers track gains in Micron
HK IPO market in focus: Didi Chuxing speculated to consider H2 listing
Foxconn Industrial Internet plans to raise CNY27.1B in Shanghai IPO
Japan May prelim manufacturing PMI weakens to 9-month low amid decline in new order growth and employment
China revises April trade surplus, exports downwards
RBNZ talks unconventional monetary policy, Kiwi weakens
AUD/JPY underperforms: Q1 construction data below ests, JPY broadly stronger
Emerging Market (EM) assets under pressure ahead of FOMC minutes: Lira (TRY) declines over 2%, Rupiah (IDR) down over 0.2%
Indonesia Central Bank continues to intervene in the bond market; 10-year yield rises above 7.50%
Vietnam equity markets extend losses seen on Tuesday’s session; Dong (VND) currency weakens
North Korea/US summit still in doubt
New Zealand DMO expected to sell NZ$200M in April 2025 bonds on Thursday
Bank of Korea (BoK) expected to leave rates unchanged at Thursday’s meeting, vote in focus

Headlines/Economic Data

Japan

Nikkei 225 opened -0.4%; closed -1.2%
TOPIX Marine Transportation index -2.6%
Utility TEPCO [9501.JP] declines over 1.5%: Japan nuclear regulator finds 6 erosions at 6 plants (Japan press)
(JP) Nikkei survey: Almost half of Japan restaurants plan price hikes this FY due to ingredient costs and labor scarcity
(JP) JAPAN MAY PRELIM PMI MANUFACTURING: 52.5 V 53.8 PRIOR (9-month low)
(JP) Japan Nationwide Dept Store Sales Y/Y: 0.7% v 0.1% prior; Tokyo Dept Store Sales Y/Y: 1.9% v 0.1% prior

Korea

Kospi opened -0.1%
(KR) Pres Trump: there is substantial chance summit with North Korea’s Kim will not work out in June; summit will be great if it happens; if not, that’s OK, too – comments at meeting with South Korea Pres Moon
(KR) South Korea President Moon: No need to doubt N. Korea/US summit will happen
(KR) South Korea Q1 Household Credit (KRW): 1,468.0T v 1,450.9T prior (slowest annual growth since March 2015)
(KR) Bank of Korea (BoK) expected to leave interest rates unchanged at Thursday, May 23rd meeting, could be a split vote; most see rate hike in July as the BoK does not meet in June – financial press poll

China/Hong Kong

Hang Seng opened -0.1%, Shanghai Composite -0.3%
Hang Seng Energy index -3.1%, Property/Construction -1.3%, Financials -1.2%
(CN) China regulator is targeting lower prices for benchmark coal – Chinese Press
(CN) Pres Trump: not pleased with how trade talks went with China; talks were a start but am not satisfied
763.HK Republicans in congress are said to be putting together legislation that would block attempts by the administration to rescue ZTE
(CN) China PBoC Open Market Operation (OMO): Injects CNY150B in 7-day and 14-day reverse repos v CNY100B prior; Net: CNY30B drain v CNY0B injection prior
(CN) China PBoC sets yuan reference rate at 6.3773 v 6.3799 prior
(CN) China Govt plans to cut the import duty on cars from 25% to 15%, effective July 1st – financial press (yesterday after the close)
(CN) CalSTRS said to be not interested in purchasing China A-shares in 2018 – HK Press

Australia/New Zealand

ASX 200 opened 0.0%, closed -0.1%
ASX 200 Energy index -2.5%, Resources -0.5%, Consumer Discretionary -0.3%, REIT +1.5%, Financials -0.1%; Utilities +1.1%, Telecom +0.9%
Fonterra, FCG.NZ Reports 9M (NZ$) Rev 14.8B, +7% y/y; total volumes 16B LMEs, -5% y/y
(AU) Australia Apr Westpac Leading Index m/m: +0.2% v -0.1% prior
Santos, [-9%], STO.AU Board rejected ‘best and final’ offer worth $10.9B from Harbour Energy, terminated talks
(NZ) Moody’s: New Zealand 2018 budget shows commitment to maintaining fiscal surpluses and reducing debt
(AU) Australia Apr Skilled Vacancies m/m: -0.5% v +0.9% prior
(NZ) New Zealand PM Ardern to meet with oil and gas representatives, including union members, in a series of closed meetings in New Plymouth Friday. This is the first meeting since Coalition Government’s announcement in April to end offshore oil and gas exploration once the current permits expired.- NZ press
(NZ) RBNZ Assistant Gov McDermott: Would consider buying foreign govt bonds in a crisis; Prepared to use QE in a crisis
(AU) AUSTRALIA Q1 CONSTRUCTION WORK DONE Q/Q: 0.2% V 1.3%E

Other Asia

TSM Said to begin manufacturing of chips for a new version of the iPhone – US financial press
(MY) Malaysia sells 2028 bonds, avg yield 4.202%; bid to cover 1.85x
(MY) Malaysia Apr CPI Y/Y: 1.4% v 1.6%e
(SG) Singapore Apr CPI M/M: -0.5% v -0.1%e; Y/Y: 0.1% v 0.5%e

North America

US equity markets ended lower: Dow -0.7%, S&P500 -0.3%, Nasdaq -0.2%, Russell 2000 -0.8%
S&P500 Energy -1.3%, Industrials -1.2%
(US) Weekly API Oil Inventories: Crude: -1.3M v +4.9M prior
(US) US President Trump: House Ways and Means Committee working on additional tax cuts by Nov
(US) Weekly API Oil Inventories: Crude: -1.3M v +4.9M prior

Europe

BARC.UK Said to be looking into possible merger with Standard Charter – FT
(US) Pres Trump said to aim for 10% cut in European steel and aluminum exports to the US – press
Reportedly OPEC may consider raising production at the June meeting to offset production decline in Venezuela and Iran export disruptions due to US sanctions – press
NH Hotel [NHH.ES]: Mincor International unit to pay €192M for 30M shares
(CH) SNB Maechler says sovereign money could cause decline in Franc currency (CHF) – US financial press

Levels as of 02:00ET

Hang Seng -1.1%; Shanghai Composite -1.1%; Kospi +0.3%
Equity Futures: S&P500 -0.2%; Nasdaq100 -0.5%, Dax -0.1%; FTSE100 -0.1%
EUR 1.1789-1.1750; JPY 110.91-110.37; AUD 0.7583-0.7535;NZD 0.6944-0.6893
Jun Gold -0.1% at $1,290/oz; Jul Crude Oil -0.4% at $71.89/brl; Jul Copper -0.3% at $3.11/lb