Asian Market Update: Japan Manufacturing PMI back in contraction
***Economic Data***
- (JP) JAPAN MAR PRELIMINARY PMI MANUFACTURING: 49.1 V 50.5E (1st contraction since Apr 2015, lowest since Feb 2013)
- (AU) AUSTRALIA Q4 HOUSE PRICE INDEX Q/Q: 0.2% V 0.0%E; Y/Y: 8.7% V 8.5%E
- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 116.0 v 116.4 prior
- (AU) Australia Jan Conference Board Leading index m/m: -0.4% v -0.2% prior
- (TW) Taiwan Feb Unemployment rate Y/Y: 3.9% v 3.9%e
***Index Snapshot (as of 04:30 GMT)***
- Nikkei225 +1.3%, S&P/ASX +0.1%, Kospi -0.1%, Shanghai Composite -0.8%, Hang Seng -0.4%, Jun S&P500 -0.1% at 2,040
***Commodities/Fixed Income***
- Apr gold +0.1% at $1,245/oz, May crude oil -0.2% at $41.45/brl, May copper -0.2% at $2.28/lb
- GLD: SPDR Gold Trust ETF daily holdings rise 2.7 tonnes to 821.7 tonnes; 5th straight increase; highest since Dec 2013
- SLV: iShares Silver Trust ETF daily holdings rise to 10,274 tonnes from 10,218 tonnes; highest since Apr 2015
- (CN) PBOC SETS YUAN MID POINT AT 6.4971 V 6.4824 PRIOR; 2nd straight weaker setting
- (CN) PBOC to inject CNY80B in 7-day reverse repos
- (JP) BOJ offers to buy ¥70B in JGBs with maturity less than 1-yr and ¥450B in 5-10yr JGBs
***Market Focal Points/FX***
- Japan March preliminary PMI fell to its lowest level since early 2013, returning to contraction for the first time in a year. Markit economist noted there was some deterioration in operating conditions this month, with contraction in output and new orders implying industrial output is also declining. Disappointing PMI from Japan comes amid ongoing dispute about fiscal policy and the need to postpone the next round of sales tax. Fin Min Aso reiterated that he does not believe fiscal action is needed at this time and that economic fundamentals are solid. Cabinet Sec Suga was less resolute than last week when he ruled out delay to sales tax hike, stating govt may in fact delay the hike if revenues fall. Econ Min Ishihara said it was too soon to evaluate the negative rate policy impact, calling for a 3-month period before judging its success.
- In China, PBoC weakened Yuan fix for the 2nd straight session, while Finance Ministry official denied rumors of a sideline deals at the recent G20, stating there is no secret pact between US and China for FX adjustment path. Earlier, a note from a Goldman analyst forecast capital outflows in Feb to slow to $36B from $88B in Jan and deemed near-term credit risks in China as manageable, though medium-term challenges remain.
- Down under, Australia Q4 house price index was slightly higher than expected. A report on IMF activities to US Congress was published this week, and Australian press noted that the RBA has been censured by US Treasury for talking down AUD and attempts to change direction of exchange rate back in Sept of 2015. S&P affirmed New Zealand credit rating with a Stable outlook, cheering the country's monetary and fiscal policy flexibility, economic resilience, and public policy stability against high external imbalances, high household and agriculture sector debt, dependence on commodity income, and risks to its financial system stability.
- USD majors traded in narrow ranges - USD/JPY capped at 112.20, AUD/USD in a 30pip range below $0.76, and NZD/USD in about a 25pip range above 0.6750.
***Equities***
US equities / ADRs:
- PBR: Reports Q4 net loss BRL36.9B v loss BRL26.6B y/y, EBITDA BRL17.1B v BRL20.7Be, Rev BRL85.1B v BRL85.9Be; -5.0% afterhours
- MFRM: Reports Q4 $0.53 adj v $0.56e, R$619M v $624Me; -6.3% afterhours
- CAMP: Guides Q4 $0.32 v $0.30e, R$71M v $76Me; Announces completion of Lojack acquisition; -8.9% afterhours
Notable movers by sector:
- Consumer discretionary: Intime Department Store Group Co 1833.HK -2.7% (FY15 result); Ajisen China Holdings 538.HK +10.2% (FY15 result)
- Financials: Ardent Leisure Group AAD.AU +11.8% (divestment); Greenland Hong Kong 337.HK -5.9% (FY15 result); Sino-Ocean Land 3377.HK -5.5% (FY15 result)
- Technology: Haier Electronics Group 1169.HK -0.5% (FY15 result); Sharp 6753.JP -3.6% (update on Hon Hai deal)
- Telecom: TPG Telecom TPM.AU +6.5% (H1 result)
- Healthcare: China Medical System Holdings 867.HK -2.4% (FY15)