Fresh RRR Cut Chatter Coming From China Officials; Shirakawa Commits To Powerful Easing If Needed For JapanEconomic Data
(JP) JAPAN MAR MERCHANDISE TRADE BALANCE TOTAL: -¥82.6B V -¥223BE; ADJ MERCHANDISE TRADE BALANCE: -¥621B V -¥446BE (multi-year low)
(BR) BRAZIL CENTRAL BANK (COPOM) CUTS SELIC TARGET RATE BY 75BPS TO 9.00%; AS EXPECTED (2nd consecutive 75BPS cut)
(NZ) NEW ZEALAND Q1 CONSUMER PRICES (CPI) Q/Q: 0.5% V 0.5%E (3-quarter high); Y/Y: 1.6% V 1.6%E
(KR) SOUTH KOREA MAR DEPARTMENT STORE SALES Y/Y: 1.6% V 2.9% PRIOR; DISCOUNT STORE SALES Y/Y: +3.2% V -6.4% PRIOR
(AU) AUSTRALIA MAR RBA FOREIGN EXCHANGE TRANSACTIONS (A$): 944.0M V 372M PRIOR
(AU) AUSTRALIA Q1 NAB BUSINESS CONFIDENCE: -1 V 1 PRIOR
(NZ) NEW ZEALAND MAR ANZ NZ JOB ADS M/M: -1.0% V 4.6% PRIOR
(JP) Japan investors bought ¥116B in foreign bonds last week v ¥1.9T sold in prior week
Markets Snapshot (as of 04:30GMT)
Nikkei225 -0.9%
S&P/ASX +0.4%
Kospi -0.4%
Taiwan Taiex unchanged
Singapore Straits Times -0.1%
Shanghai Composite -0.1%
Hang Seng +0.4%
S&P Futures +0.1% at 1,380
June gold -0.1% at $1,638/oz
May Crude -0.1% at $102.62
Overview/Top Headlines
Asian markets were cautious in the session with currencies little changed ahead of Spain's bond auction today. US 10-yr yield stayed below 2% for the 5th day. Brazil cut its interest rate by 75bps to 9.00% getting close to a record low for the BRICS nation. China's third largest lender, China Construction Bank, has tightened lending to domestic property firms, instructing 38 branches across China to halt loans to small developers. Lending to property firms at the 38 branches accounted for more than 15% of their total loans.
There was additional talk about an imminent RRR cut in China. Xinhua news agency reported comments from an un-named PBoC official saying that the PBoC will increase reverse repo operations and cut the RRR in order to increase liquidity, also reiterated that the central bank will continue its 'prudent' monetary policy and fine tune policies at the appropriate extent and timing. Says there is a need to ensure that there are reasonable levels of liquidity in the interbank market and support stable and relatively fast economic growth.
AUD/USD rose about 30 pips on the report above $1.0385. Later in the session former PBoC Advisor Li said that targeted policy easing is likely in the coming months; Banks reserve ratio (RRR) will be fine-tuned. He also noted that Australia will be central to diversifying reserves. Japan reported a multi-year low adjusted trade deficit of -¥621B. BOJ Gov Shirakawa said he was fully committed to powerful monetary easing to achieve 1% inflation target, USD/JPY extended above ¥81.50, highs for today's session on the comments.
USD was also stronger against the Korean won, Singapore dollar and Philippine peso, though gains for the greenback were limited. Silver and copper were slightly weaker both down a few cents, while wheat gained 0.8% to $6.15 and corn +1.3% to $6.09 with some chatter that farmers may shift some of their corn fields to soybeans.
Speakers/Geopolitical/In The Press
(JP) BoJ's Yamaguchi: Particular focus should be paid to impact yen; It is unpredictable whether peripheral EU countries can go ahead with fiscal and structural reform.
(TW) Taiwan Central Bank: May use monetary policy to counter inflation if needed.
(EU) IMF Chief Lagarde: Euro yields are reflecting some of the economic fragility; Global economic recovery is "extremely unstable."
(KR) Bank of Korea (BOK) Gov Kim: raising rates depends on 3 variables - stable financial markets, public's rate expectations and if growth remains at trend.
Equities
Hyundai Motor, 005380.KR: CEO: Aims to sell 1.5M vehicles in South Korea markets this year. - Financial Press
WF: South Korea's Financial Services Commission (FSC) Chairman: To announce plans to privatize Woori Finance within the first half of the year. - Korean Press
FMG.AU: Reports Q3 Iron ore production: 13.6M tons v 9.7M tons y/y; Shipped 12.6M tons v 8.4M tons y/y.
WPL.AU: Reports Q1 Rev $1.2B v $1.3Be; Q1 Output 14.1MMBOE, -10% y/y.
STO.AU: Reports Q1 Rev A$754M v A$501M y/y; Production 12.5 MMBOE v 12.9Me; Sales 14.0 MMBOE.
TLS.AU: Confirms will pay A$0.28 dividend in FY12 and FY13; Affirms FY12 guidance Rev to increase "low single digit."
US Equities
YUM: Reports Q1 $0.76 v $0.73e, R$2.74B v $2.7Be; -2.0% after hours
SWK: Reports Q1 $1.09 (adj) v $1.13e, R$2.65B v $2.6Be; -1.9% after hours
STLD: Reports Q1 $0.23 (ex $0.03 financing adjustment) v $0.21e, R$1.98B v $2.1Be; -0.8% after hours
QCOM: Reports Q2 $1.01 (adj) v $0.96e, R$4.94B v $4.8Be; -3.3% after hours
MAR: Reports Q1 $0.30 v $0.29e, R$2.55B v $2.6Be; +3.1% after hours
EBAY: Reports Q1 $0.55 v $0.52e, R$3.30B v $3.2Be; +6.7% after hours
CCK: Reports Q1 $0.46 (adj) v $0.45e, R$1.95B v $1.9Be; +1,3% after hours
AXP: Reports Q1 $1.07 v $1.00e, R$7.61B v $7.6Be; -0.4% after hours