Asian Market Update: Yellen Put pauses ahead of PMIs; Slowing profits, rising bad loans weigh on China banks
***Economic Data***
- (AU) AUSTRALIA FEB SKILLED VACANCIES M/M: 2.7% V 4.0% PRIOR
- (AU) AUSTRALIA FEB PRIVATE SECTOR CREDIT M/M: 0.6% (4-month high) V 0.5%E; Y/Y: 6.6% V 6.5%E
- (AU) AUSTRALIA FEB HIA NEW HOME SALES M/M: -5.3% V +0.6% PRIOR; first decline in 3 months; biggest decline in 19 months
- (NZ) NEW ZEALAND MAR ANZ ACTIVITY OUTLOOK: 29.4 V 25.5 PRIOR; BUSINESS CONFIDENCE: 3.2 V 7.1 PRIOR
- (NZ) New Zealand Feb M3 Money Supply Y/Y: 7.3% v 7.6% prior
- (KR) SOUTH KOREA FEB INDUSTRIAL PRODUCTION M/M: 3.3% V 0.0%E; Y/Y: +2.4% V -0.2%E
- (KR) SOUTH KOREA APR BUSINESS MANUFACTURING SURVEY: 70 V 66 PRIOR; NON-MANUFACTURING SURVEY: 71 V 67 PRIOR
- (UK) MAR GFK CONSUMER CONFIDENCE: 0 V -1E
***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 +0.1%, S&P/ASX +1.3%, Kospi -0.6%, Shanghai Composite +0.4%, Hang Seng -0.2%, Jun S&P500 -0.1% at 2,053
***Commodities/Fixed Income***
- Apr gold +0.1% at $1,229/oz, May crude oil -1.1% at $37.89/brl, May copper -0.4% at $2.18/lb
- GLD: SPDR Gold Trust ETF daily holdings fall 1.2 tonnes to 819.3 tonnes
- (CN) PBOC SETS YUAN MID POINT AT 6.4612 V 6.4841 PRIOR; 3rd straight stronger setting; Strongest Yuan setting since Dec 15th
- (CN) PBOC to inject CNY100B in 7-day reverse repos
- (JP) Japan investors bought net ¥1.16T in foreign bonds v bought ¥2.28T in prior week; Foreign investors sold net ¥359B in Japan stocks v sold ¥678B in Japan stocks in prior week
***Market Focal Points/FX***
- Asian equity markets are mixed as the risk-on rally fanned by dovish Fed chair Yellen remarks appears to have run its course. The focus is turning to monthly manufacturing PMI figures in tomorrow's session, followed by March non-farm payrolls report on Friday. Australia index outperformed thanks to strength in the materials space, even as goldminers retreated from the overnight gains. In FX, USD/JPY is trading near session lows ahead of Tokyo close - falling about 40pips from the highs to 112.20. AUD/USD and NZD/USD pairs were down some 30pips to 0.7640 and 0.6890 respectively. PBoC also set Yuan much stronger in response to two straight days of weaker greenback.
- In key economic data, HIA housing figures from Australia saw their biggest drop in 19 months, though resident economist said the initial stage of down cycle in new home building would be moderate before possibility of more pronounced declines down the line. ANZ New Zealand confidence slowed, though the forward looking Activity Outlook showed improvement. Korean industrial output was also a welcome positive surprise amid recent speculation regarding further BOK easing with a new less hawkish Board taking reins next months.
- Among notable speakers, BOJ Gov Kuroda reiterated central bank's intentions to bring inflation to a stable 2% target before easing off the accommodative stance. Kuroda added there was no evidence in the market about concern that investors see BOJ underwriting govt debt. That sentiment was shared by Fin Min Aso. In China, an influential former PBoC adviser Yu called for more aggressive fiscal response to slowing property investment. He said fiscal deficit target could be expanded to 5% from the current 3% to stimulate demand, since the anticipated 10% slide in real estate investment may shave off about 1% of overall GDP. Separately in China, local press reported that the govt has placed a ceiling on the amount of local govt debt at below CNY17.2T at the end of 2016. Another report saw expectations of PBoC planning to offer loans targeted at boosting consumption with the focus on rural regions.
***Equities***
US equities / ADRs:
- MDVN: Reportedly has hired advisors to stave off potential takeover - press; +13.0% afterhours
- WBMD: To enter S&P400 index, replacing SUNE after the close of trading on April 1; +2.8% afterhours
- MU: Reports Q2 -$0.05 v -$0.09e, R$2.93B v $3.24Be; +1.0% afterhours
- PRGS: Reports Q1 $0.27 v $0.29e, R$89.5M v $93.0Me (1 est); authorizes new $100M share repurchase program (7% of market cap); -11.1% afterhours
Notable movers by sector:
- Consumer discretionary: China Eastern Airlines 670.HK +0.5% (FY15 result); China Southern Airlines Co 1055.HK +2.8% (FY15 result); China Yurun Food Group 1068.HK +0.8% (FY15 result)
- Consumer staples: Inner Mongolia Yili Industrial Group Co 600887.CN +2.2% (FY15 result)
- Financials: China Construction Bank 939.HK -1.6% (FY15 result); Industrial and Commercial Bank of China (ICBC) 1398.HK -1.1% (FY15 result); Dalian Wanda Commercial Properties Co. 3699.HK +17.9% (parent considers privatization and delisting)
- Industrials: China Railway Construction Corp 1186.HK +2.6% (FY15 result); Chongqing Changan Automobile Co 000625.CN +9.5% (private placement); China Railway Group 601390.CN +1.1% (FY15 result); China Cosco Holdings Co 601919.CN +1.2% (FY15 result); China Shipping Container 601866.CN +1.3% (FY15 result); Takata Corp. 7312.JP +5.6% (airbag recall costs)
- Technology: Sharp Corp 6753.JP -4.4% (deal approved); Toshiba Corporation 6502.JP +6.8% (acquisition)
- Materials: Angang Steel 347.HK +2.0% (FY15 result)