Asian Mid-session Update: Shanghai Composite sets new 7-year highs on latest property sector measures
***Economic Data***
- (JP) JAPAN FEB LOANS & DISCOUNTS CORP Y/Y: 3.2% V 2.9% RIOR
- (AU) AUSTRALIA FEB HIA NEW HOME SALES M/M: 1.1% V 1.8% PRIOR; 2nd straight increase
- (AU) AUSTRALIA FEB PRIVATE SECTOR CREDIT M/M: 0.5% V 0.5%E; Y/Y: 6.2% V 6.3%E
- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 112.3 v 111.4 prior
- (NZ) NEW ZEALAND MAR ANZ ACTIVITY OUTLOOK: 42.2 V 40.9 PRIOR; BUSINESS CONFIDENCE: 35.8 (7-month high) V 34.4 PRIOR
- (NZ) New Zealand Feb M3 Money Supply Y/Y: 6.6% v 6.2% Prior
- (NZ) NEW ZEALAND FEB BUILDING PERMITS M/M: -6.3% V -4.6% PRIOR (3rd straight decline)
- (SG) Singapore Feb M1 Money Supply Y/Y: 3.1% v 0.1% prior; M2 Money Supply Y/Y: 3.3% v 2.6% prior
- (KR) SOUTH KOREA FEB INDUSTRIAL PRODUCTION M/M: 2.6% (4-year high) V 0.7%E; Y/Y: -4.7% V -2.5%E
- (KR) SOUTH KOREA FEB CYCLICAL LEADING INDEX CHANGE: 0.6% V 1.0% PRIOR
- (UK) MAR GFK CONSUMER CONFIDENCE: 4 V 2E (highest since June 2002)
***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 flat, S&P/ASX +1.2%, Kospi +0.2%, Shanghai Composite +0.8%, Hang Seng +0.4%, Jun S&P500 -0.1% at 2,073
***Commodities/Fixed Income***
- Jun gold flat at $1,185/oz, May crude oil -1.2% at $48.13/brl, May copper flat at $2.78/lb
- (CN) PBoC to inject CNY25B in 7-day reverse repos (10th consecutive injection); Offer yield at 3.55%, unchanged from prior
***Market Focal Points/FX***
- China property names are outperforming the broader market following an overnight announcement by the PBoC to ease mortgage policy rules. Sector names already staged broad gains in yesterday's session after local press reported the PBoC would cut second homes down-payment ratio to 50% from 70%. Instead, the PBoC went even further, lowering that floor to 40% to help the housing market recover after the latest property price data showed a record y/y rate of decline. China International Capital Corp (CICC) estimated the volume of new home sales as a result of the policy change could be boosted by as much as 5%. Separately in China, PBoC's regular open market operations saw an injection of CNY25B via 7-day reverse repos sold at 3.55%, unchanged from last rate of the prior week.
- Australia's S&P/ASX rebounded following yesterday's selloff, tracking strong performance in the basic materials sector during the US session. Helping sentiment, markets are building positions on expectation of RBA cutting rates once again in its decision next week. Fixed income likelihood of a cut is now above 70%, and analysts with Barclays and Westpac indicated they are now in the easing camp. CBA pointed to the latest private sector credit figures in justifying expectations of another hold before the likely cut in May. Latest HIA new home sales data may also argue for a hold, with the volume of sales exceeding the peak of April 2014. HIA economist said the "signal from both HIA new home sales and ABS building approvals is for further upward momentum to multi-unit dwelling construction in 2015, but a consolidation in detached house building at volumes above the long term average." AUD underperformed among the USD majors, falling over 30pips from the highs below $0.7630 vs USD. NZD/USD rose 20pips to $0.7510 following a 7-month high in ANZ business confidence but pared those gains on renewed USD-bullish flows later in the session.
- Outside Asia, Greek PM Tsipras continued to straddle both sides of the fence between his left-wing constituency and the increasingly more impatient EU lenders. Appealing to the former, Tsipras reiterated Athens will not accept recessionary policies and austerity measures in his speech to Parliament. Tsipras added the negotiations have limits, and that the latest airports leasing deal still needs to be reviewed. In the US, Fed Vice Chair Fischer took some questions after an Atlanta address focused on financial regulations, noting the Fed did not design policy to boost USD and also reiterating a rate liftoff will likely happen this year.
***Equities***
US equities / ADRs:
- DRYS: Announces Agreements to Sell Its Tanker Fleet for $245M; +4.9% afterhours
- TCK: Responds to Market Rumors; not in discussions with Antofagasta; -6.8% afterhours
Notable movers by sector:
- Consumer Discretionary: Qingdao Haier 600690.CN +6.4% (FY14 results); Midea Group 000333.CN +6.3% (FY14 results); Shimamura 8227.JP -4.8% (FY14/15 results); G8 Education GEM.AU -6.2% (delays partial settlement of acquisition)
- Financials: China Vanke 2202.HK +1.8%, Poly Real Estate 600048.CN] +1.9%, China Merchants Properties 000024.CN +3.2% (PBoC eases mortgage policy); Evergrande Real Estate Group 3333.HK +4.1% (FY14 results)
- Materials: Alacer Gold Corp AQG.AU +5.5% (production update); Metcash MTS.AU +2.2% (said to divest unit)
- Industrials: China Railway Group 390.HK +3.2% (FY14 results); China Railway Construction 1186.HK +1.5% (FY14 results); China Rongsheng Heavy Industries 1101.HK -2.9% (FY14 results)
- Technology: FujiFilm Holdings 4901.JP +2.7% (to acquire Cellular Dynamics)
- Healthcare: Blackmores Limited BKL.AU +10.2% (Q3 guidance)
- Utilities: Huadian Power International 1071.HK +4.3% (FY14 results)