Economic Data
(CN) CHINA Q1 REAL GDP Q/Q: 1.6% V 2.0%E; Y/Y: 7.7% V 8.0%E; YTD Y/Y: 7.7 % V 8.0%E
(CN) CHINA MAR INDUSTRIAL PRODUCTION Y/Y: 8.5% V 10.0%E (lowest since May 2009); YTD 9.5% V 10.0%E
(CN) CHINA MAR URBAN FIXED ASSETS YTD Y/Y: 20.9% V 21.3%E
(CN) CHINA MAR RETAIL SALES Y/Y: 12.6% V 12.6%E; YTD Y/Y: 12.4% V 12.5%E
(CN) China Mar power consumption increases 2% y/y to 424.1B kwh - Chinese press citing NEA
(AU) AUSTRALIA FEB HOME LOANS M/M: 2.0% V 1.5% (first rise in four months); INVESTMENT LENDING: 1.8% V 4.4% PRIOR; OWNER-OCCUPIED HOME LOAN VALUE: 1.2% V 1.2% PRIOR
(NZ) NEW ZEALAND MAR PERFORMANCE SERVICES INDEX: 55.4 V 55.5 PRIOR (6th month of expansion)
(UK) UK APR RIGHTMOVE HOUSE PRICES M/M: 2.1% V 1.7% PRIOR (four straight increase); Y/Y:0.4% V 1.2% PRIOR
Markets Snapshot (as of 04:00 GMT)
Nikkei225 -1.4%
S&P/ASX -1.5%
Kospi -0.4%
Shanghai Composite -0.9%
Hang Seng -1.5%
June S&P500 -0.4% at 1,576
June gold -4.1% at $1,440/oz
May Crude Oil -2.6% at $88.95/brl
Observations/Insights
Asian markets are in the red across the board, with disappointing economic data out of China accelerating further profit-taking across the risky assets. Soft economic data from China, tracking evidence of cracks in the U.S. recovery story, is an alarming reminder that these economies may not be out of the woods, and that the respective impact of policymakers cooling steps and sequester still bear close monitoring. Commentary from China Stats Bureau following the release was particularly telling, as spokesperson Sheng defended 2013 economy being off to a steady start, but also warned the potential GDP rate is a moving target with a pronounced downside bias. Sheng did indicate China will still attain the 7.5% GDP target, and acknowledged the Q1 slowdown is due to government policy controls. Concurrently, the World Bank cut Developing East and China 2013 GDP outlook by 0.1pt to 7.8% and 8.3% respectively.
In the eurozone, Spanish press reported the government is awaiting EU approval granting it a 2-year extension to achieve 3% to 2016. The extension is said to come with conditions of accelerated structural reform. Under the new agreement, the report noted, the EU may allow Spain to reach a deficit of 6.2% in 2013 vs 4.5% original target. In Italy, Bersani and Berlusconi traded jabs over the ongoing political deadlock - the former calling for the end of "demagoguery", and latter advancing himself to any new round of elections in the absence of a stable government.
Selloff in the gold markets accelerated from Friday's late-day drop despite the initial bounce. June gold was down some $70 from the highs to trade just above $1,420/oz, as analysts offer a range of explanations - from the expectation of higher U.S. real interest rates to the precedent of ELA funding for the EZ periphery tapping the not insignificant gold reserves of nations such as Italy and Spain.
Currencies
JPY and USD are gaining sharply against the risk-on currencies, with most pronounced losses felt in AUD and NZD after the China data. AUD/USD and NZD/USD are down about 100pips at $1.0420 and $0.8480 respective session lows. The JPY traded through the ¥98 hande against the dollar, as the pair reached a 1-week low around 97.55. On the crosses, the AUD/JPY was off by as much as 2 big figure at 101.80. EUR/USD was also susceptible to a pullback, falling back below $1.31 to $1.3065 session lows.
Fixed Income/Commodities
(AU) Australia Newcastle weekly coal exports for week ended Apr 15th: +20.9% v -16% w/w
(CN) China Stats Bureau: Pork prices for early April down by as much as 2.7% - financial press
USD/CNY: (CN) PBoC sets yuan mid point at 6.2454 v 6.1922 prior close (highest Yuan level since 2005 revaluation)
(FR) France reported to be planning currency swap line with China (update) - financial press
GLD: JPMorgan noting the ECB's claim on Cyprus gold reserves to cover losses in the ELA "sets a precent", potentially paving the way for claim on other peripheral countries that may receive aid
GLD: SPDR Gold Trust ETF daily holdings fall by 22.8 tons to 1,158.6 ton (lowest since 1,152 in Apr of 2010) - update as of Apr 12th
Speakers/Political/In the Papers
(JP) Japan BoJ Gov Kuroda: Japan economy of has shown signs of picking up; Reiterates aims to reach 2% CPI target in 2 years - BOJ branch managers meeting
(JP) Japan Dep chief cabinet spokesperson Kato: PM Abe has indicated he won't compromise on the Senkaku Islands dispute
(JP) Japan PM Abe reiterates North Korea should refrain from making provocative statements - Nikkei News
(JP) Japan government's Council on Economic and Fiscal Policy to consider FY15/16 target to cut its deficit by half - Nikkei News
(CN) State Information Center researcher Li Ruoyu suggested that China does not have much room to ease policy, despite weak Q1 GDP data - financial press
(KR) China State Councillor Yang Jiechi: China to work with other relevant parties including US to play a constructive role in resolving North Korea nuclear issue
(KR) South Korea Fin Min Hyun: demand for govt bonds still stable; 2013 growth could reach 2.7% or 2.8% with stimulus.
(KR) South Korea Finance Ministry: Currency, stock volatility widening due to North Korea, yen risks
(NZ) According to Seek.com, March National new online job ads rose 4.9% y/y; Canterruby ads fell 0.7% y/y - NZ Herald
(ES) Spanish govt expects EU to allow it until 2016 to reduce deficit down to 3% of GDP vs 2014 present target - Spanish press
(GR) Troika concludes review of Greece; expected to receive new aid - financial press
(IT) Italy PD's Bersani: Important to deal with the crisis in a rational manner; There has been "enough demagoguery"; Berlusconi: Calling for a new govt or another round of elections - press
(US) Fed's Evans (dove, FOMC voter): seeing progress on improving jobs market; Fed actions have helped the economy; would like to see even more accommodative stance
(US) Fed's Kocherlakota (dovish, FOMC alternate): Fed could decide not to raise rates even if unemployment goes below the 6.5% threshold; reiterates support for lowering the unemployment threshold to 5.5%
Equities
LEI.AU: Thiess unit awarded major contract in Western Australia (WA); 2-yr deal valued at approx A$125M
MGR.AU: Enters into 10-yr lease agreement with QBE Insurance; financial terms not dislcosed
Senex SXY.AU: Reaches annual target of 1M barrels of oil two months before FY-end; Targets FY13 net oil production at a record 1.2M barrels
Sharp 6753.JP: Sharp intends to sell its entire 30M share stake (9.2%) in Pioneer - Japan press; +14.0%
Daiei 8263.JP: To unveil a goal of returning to net profit by FY15 after 5 consecutive years of losses as part of its medium-term business plan in August - Nikkei News; +2.6%
Takeda 4502.JP: May report FY12/13 op profit around ¥160B, in line with prior guidance, -40% y/y - Nikkei News
Mitsubishi UFJ 8306.JP: President: Prepared to acquire local banks in Asia if it is a good opportunity - Nikkei News interview
HSBC 5.HK: Plans to dispose of more non-core Chinese assets for capital raising- Chinese press
LIFE: Thermo Fisher said to be drawing close to a deal for as much as $13B, which would be above $75/shr and above the speculated $65-70/shr range - financial press
BA: FAA orders inspections of 737 units - financial press