Economic Data
(KR) SOUTH KOREA MAR CURRENT ACCOUNT: $3.0B V $557M PRIOR; GOODS BALANCE: $3.00B V $1.31B PRIOR
(UK) UK APR GFK CONSUMER CONFIDENCE SURVEY: -31 V -30E
(JP) JAPAN APR MARKIT/JMMA MANUFACTURING PMI: 50.7 V 51.1 PRIOR
(JP) JAPAN MAR JOBLESS RATE: 4.5% V 4.5%E; JOB-TO-APPLICANT RATIO: 0.76 V 0.76E PRIOR
(JP) JAPAN MAR NATIONAL CPI Y/Y: 0.5% V 0.4%E; NATIONAL CORE Y/Y 0.2% V 0.1%E (6-month high); APR TOKYO CPI Y/Y: -0.3% V -0.1%E; TOKYO CORE Y/Y: -0.5% V -0.3%E (5-month low)
(JP) JAPAN MAR OVERALL HOUSEHOLD SPENDING Y/Y: 3.4% V 4.1%E (2-year high)
(JP) JAPAN MAR PRELIMINARY INDUSTRIAL PRODUCTION M/M: 1.0% V 2.3%E;
(JP) JAPAN MAR RETAIL TRADE M/M: -1.2% V -0.5%E ; Y/Y: 10.3% V 10.0%E (multi-year high); LARGE RETAILERS' SALES Y/Y: 5.0% V 7.2%E PRIOR
(PH) PHILIPPINES FEB TRADE BALANCE: -$562M V -$1.0B PRIOR; TOTAL IMPORTS: $5.0B V $5.1B PRIOR
(CN) CHINA MAR INDUSTRIAL PROFITS YTD Y/Y: -1.3% V -5.2% PRIOR (2nd consecutive decline)
(TH) Thailand Mar Manufacturing Production Index:; Y/Y: -3.2% v -0.5%e
Markets Snapshot (as of 04:30GMT)
Nikkei225 +0.8%
S&P/ASX flat
Kospi +0.5%
Shanghai Composite -0.2%
Hang Seng +0.5%
Jun S&P Futures -0.4% at 1,391
June gold -0.3% at $1,655/oz
June Crude -0.5% at $104.06
Overview/Top Headlines
European fiscal crisis is once again front and center in the Asia session, overshadowing some modest recovery in the US housing sector as well as the strong earnings report from the likes of Amazon. S&P remained at the forefront of aggressive sovereign oversight, cutting Spain credit rating by 2 notches to BBB+. This cut takes S&P rating one notch below that of Moody's and two notches below that of Fitch. Specifically, Spain is anticipated to be forced to provide further support to the banking sector and is also expected to miss its target of 5.3% debt to GDP this year. Instead S&P sees budget deficit as high as 6.2%, with GDP expected to contract by 4% in 2012 and by 1% in 2013. S&P500 futures sank over 5 handles following the S&P downgrade and never recovered, sitting just above 1,390 in the June contract. Euro fell about 60 pips in the wake of the downgrade to $1.3080, while Asia-Pacific commodity majors were sold more heavily in latter part of the session - AUD/USD and NZD/USD fell about 30 pips to $1.0360 and $0.8110 respectively.
Bank of Japan confounded traders preparing to be either disappointed by ¥5T asset purchase increase or cheer a more aggressive ¥10T boost. Instead, the BOJ increased the JGB component of its program by ¥10T from ¥19T to ¥29T, but also reduced the G fixed-rate fund-supplying operation by ¥5T from ¥35T to ¥30T citing recent episodes of undersubscription. Thus, the BOJ net asset purchase increase was only ¥5T TO ¥70T, as USD/JPY whipsawed below 80.50, above 81.40, and back below 80.90 all within an hour's time. Notably, BOJ also extended the maturity of JGBs to be purchased under its program to 1-3 years range from 1-2 years, pressuring JGB yields on the lower-term side of the curve. BOJ also elevated its prospects for inflation, noting y/y change in CPI will gradually rise to a range of 0.5-1.0% (previously said y/y rate of change in CPI will remain at about 0% for time being).
Speakers/Geopolitical/In the press
(KR) South Korea Fin Min Bahk: Economy getting out of soft patch but domestic demand still slow
(JP) Japan Fin Min Azumi: Will not deny Japan is considering purchase of South Korea bonds; Expects Spain to regain market trust; To monitor BOJ policy decision todays; Need to make full use of monetary policy and deregulation to beat deflation.
(JP) Japan reaches agreement with US Defense Dept regarding US Marines presence on Okinawa; Plan moving 9K marines out of the island; 5K going to Guam and remainder to Australia/Hawaii
Equities
MQG.AU (Macquarie): Reports FY11/12 Net A$730M v A$726Me; Rev A$6.96B v A$7.67B y/y
005930.KR (Samsung Electronics): Reports Q1 Final Net profit KRW5.0T (RECORD HIGH) v KRW2.8T y/y, Op Profit KRW 5.85T v KRW5.3T y/y, Rev KRW45.3T v KRW37T y/y
US Equities
AMZN: Reports Q1 $0.28 v $0.07e, R$13.18B v $12.9Be; +13.8% afterhours
CSTR: Reports Q1 $1.39 (adj) v $1.34e, R$568M v $564Me; -3.4% afterhours
EMN: Reports Q1 $1.22 (adj) v $1.12e, R$1.82B v $1.9Be; +1.5% afterhours
EXPE: Reports Q1 $0.26 v $0.16 y/y, R$816.5M v $791Me; +18.7% afterhours
GILD: Reports Q1 $0.91 v $0.93e, R$2.28B v $2.2Be; -0.2% afterhours
MET: Reports Q1 $1.37 v $1.29e, R$15.9B v $16.7Be; -0.2% afterhours
PFG: Reports Q1 $0.70 v $0.74e, R$2.10B v $2.1Be; -0.6% afterhours
SBUX: Reports Q2 $0.40 v $0.39e, R$3.20B v $3.2Be; -5.0% afterhours
WDC: Reports Q3 $2.52 v $1.58e, R$3.04B v $2.4Be; -8.5% afterhours