- The major Asia-Pac bourses traded mixed as markets failed to fully benefit from a mild tailwind after the gains in Wall St
- DUP Party has threatened it would bring down the government in the event that Northern Ireland is required to stay in the customs union post-Brexit
- Looking ahead, highlights include ECB and Riksbank rate decisions & press conferences, US durables, weekly jobs, advanced goods trade balance and a slew of earnings
The major Asia-Pac bourses traded mixed as markets failed to fully benefit from a mild tailwind after the gains in Wall St and as focus across global stock markets turned to a deluge of earnings. Nikkei 225 (+0.5%) was underpinned by recent JPY weakness and with Tokyo Electron the outperformer after its FY net firmly topped estimates, while the KOSPI (+1.3%) was the biggest gainer amid optimism ahead of tomorrow’s inter-Korean summit and after tech giant Samsung Electronics released its Q1 final results. Elsewhere, ASX 200 (-0.2%) was indecisive as Australia also reflected on the broad weakness during the prior day’s holiday closure, while Shanghai Comp. (-0.9%) and Hang Seng (-0.8%) were downbeat amid the backdrop of rising money market rates and another substantial consecutive net liquidity drain of CNY 150bln by the PBoC. Finally, 10yr JGBs were quiet with markets focused on earnings releases and amid a lack of Rinban announcement. Furthermore, the BoJ also kick-started its 2-day policy meeting today in which the central bank is expected to maintain policy settings, while focus would also be on the forecasts in the Outlook Report and whether there will be any changes to inflation estimates with the inclusion of the newly appointed Deputy Governors including known-reflationist Wakatabe.
China MOFCOM repeated its opposition to unilateralism and protectionism, while it added that some Chinese firms have given up on the US market amid uncertainty. In other news, a China MIIT official said China is working on a significant tariff reduction for auto imports, while there were also reports that China is mulling lowering car import tariffs to 10% or 15% from the current 25%, with a decision possibly as early as next month (Newswires)
PBoC injected CNY 100bln via 7-day reverse repos, which resulted to a net daily drain of CNY 150bln. (Newswires)
PBoC set CNY mid-point at 6.3283 (Prev. 6.3066)
Fitch affirmed Japan at A; outlook stable. (Newswires)
South Korean GDP Growth (Q1 P) Q/Q 1.1% vs. Exp. 1.1% (Prev. -0.2%). (Newswires)
South Korean GDP Growth (Q1 P) Y/Y 2.8% vs. Exp. 2.9% (Prev. 2.8%)
UK PM May is said to issue a wish list of her trade demands for a Brexit trade deal. (Newswires)
UK PM May has held a cabinet meeting with Conservative Brexiteers whereby she was asked to stick to her plan of making a clean break from the EU. (Newswires)
UK DUP Party which has an agreement with the Conservative Party has threatened it would bring down the government in the event that Northern Ireland is required to stay in the customs union post-Brexit. (Telegraph)
UK House of Lords defeated PM May’s government on legislation over Brexit regarding the adoption of wide-ranging law-making powers post-Brexit. (Guardian)
UK Chancellor Hammond said UK is at the beginning of talks with EU regarding the finance sector post-Brexit. (Newswires)
Price action was relatively quiet which provided the greenback’s major counterparts some reprieve from the recent losses. As such, EUR/USD and GBP/USD were off lows but remained below the 1.2200 and 1.4000 handles respectively, while USD/JPY maintained a firm footing above 109.00 after being fuelled by USD strength and the improved risk tone during US trade. Elsewhere, commodity-linked currencies are mixed with AUD and CAD mildly supported after WTI crude reclaimed USD 68.00/bbl, although NZD languished on cross-related flows as AUD/NZDextended on upside after support held at 1.0700.
Bank of Canada Governor Poloz said people need to be ready for higher interest rates, while he added it is a question regarding timing and pace but noted there are risks of moving too quickly as well as moving too slowly. (Newswires)
Commodities were mixed in which WTI crude futures edged mild gains after breaking away from the prior day’s narrow trading range and the USD 68.00/bbl level. Gold prices were flat but remained near its lowest levels in over a month as the USD-index remained above 91.00, while copper was weaker alongside the downbeat risk appetite observed in its largest consumer China.
South Korea said that President Moon will meet with North Korea leader Kim at the border on Friday at 0930 local time (0130 BST). In related news, there were also comments from a BoK official that any economic cooperation with North Korea will bolster South Korean consumer sentiment. (Newswires)
French President Macron said he thinks US President Trump will not want US to remain in Iran nuclear deal based on prior statements. (Newswires)
The auction of 5yr notes saw a stops-through by 0.1bps while the yield was the highest since September 2018. Directs took the largest portion since July 2014 whilst dealers and indirects saw coverage below recent averages. Most of the action was concentrated in the long-end of the curve as investors reallocated assets into long-term debt which pushed the 10yr and 30yr higher by c.4bps. The 30yr yield has touched a 2-month high in the session and extended gains above 3.2150 and settled just below that level. 5s10s, 5s30s and 2s10,2s30 spread both widened by c.2bps. US 10yr T-Notes futures settle 8 ticks lower at 119-02+.
Moody’s affirmed US at AAA rating and maintained stable outlook. Moody’s said would consider changing US rating and outlook if it concluded in the approaching years that policymakers lack capability to respond decisively to mitigate adverse fiscal dynamics in medium-term. (Newswires)
US official noted that priorities for US at April 27th NATO meeting are financial burden sharing with members with focus on Germany, as well as underscoring Russian aggression and Syria regarding alliances’ talks in considering Europe southern frontier. (Newswires)
US President Trump lawyer Cohen said he will assert 5th amendment right in all proceedings related to the Stormy Daniels case. (Newswires)