Economic Data
(CN) CHINA APR ACTUAL FOREIGN DIRECT INVESTMENT (FDI) Y/Y: -0.7% V 2.8%E (6th straight month of decline); YTD -2.4% Y/Y TO $37.9B
(AU) RESERVE BANK OF AUSTRALIA (RBA) MAY MEETING MINUTES: MEMBERS JUDGED DESIREABLE RATE MOVE BELOW DEC LEVELS; NEEDED TO CUT RATES TO OFFSET HIGHER BANK RATES
(KR) SOUTH KOREA APR EXPORT PRICE INDEX M/M: 0.6% V 0.5% PRIOR; Y/Y: 2.0% V 0.0% PRIOR; IMPORT PRICE INDEX M/M: -1.0% V 1.7% PRIOR; Y/Y: 1.7% V 3.5% PRIOR
(AU) AUSTRALIA APR NEW MOTOR VEHICLE SALES M/M: %-0.7 V 4.0% PRIOR; Y/Y: 7.3% V 4.0% PRIOR
(SG) SINGAPORE MAR RETAIL SALES M/M: 1.6% V 0.4%E; Y/Y: 9.1% V 8.0%E; EX-AUTO Y/Y: 6.5% V 3.5%E
(JP) JAPAN APR CONSUMER CONFIDENCE: 40.0 V 40.8E
(NZ) NEW ZEALAND APR NON RESIDENT BOND HOLDINGS: 62.1% V 60.9% PRIOR
Markets Snapshot (as of 04:30GMT)
Nikkei225 -1.2%
S&P/ASX -0.7%
Kospi -1.0%
Taiwan Taiex -0.1%
Singapore Straits Times Index +0.2%
Shanghai Composite -0.8%
Hang Seng +0.1%
Jun S&P Futures +0.2% at 1,337
June gold -0.4% at $1,554/oz
June Crude -0.5% at $94.29
Overview/Top Headlines
Risk off ahead of EU GDP release later in the European session. After the close Moody's cut ratings on 26 Italian banks from 1-4 notches. Greece continues to struggle with putting together a unity Govt, leaders will meet again this evening. Greece will also have to decide if it will pay €436M to bondholders. There is some speculation if they miss the payment today, there could be up to a 30-day grace period extended. In a meeting of EU leaders today the main focus was on Spain. EU's Juncker noted the current consolidation strategy conforms with EU rules and remains appropriate. Meeting did NOT discuss potential for a Greek exit of Euro Zone. Juncker said they did not talk about a Greek target extension, would only be given under exceptional circumstances.
IMF is visiting Australia for stress tests and will be meeting with regulators and banks. The RBA released May 1st meeting minutes saying that members judged it to be desirable rate move below December levels, also indicated that they did not even entertain a 25bp cut. One of the main reasons given was to offset higher bank rates. Reiterated that growth outside of mining would be below trend and that EU situation continues to cloud the global outlook. AUD/USD remained below parity though continued to inch higher throughout the session testing to $0.9989.
Australia Treasury Sec Parkinson said the high AUD helps spread benefits of mining boom and absorbed shocks by lowering import prices.
China released its April foreign direct investment with the 6th consecutive monthly decline, giving another signal that China is facing an even profounder slowdown. Even with the recent RRR cut it will take some time for the fresh easing to show some impact and given the market's reaction to the cut it is likely that more will need to be done to spur China's growth. Yields around the world continue to fall. EUR/USD traded in a 25 pip range from $1.2838-1.2814. USD/JPY stayed mostly unchanged in the session around ¥79.90, also is a very small range.
Speakers/Geopolitical/In the press
(JP) Japan DPJ's Fujii: If the sales tax bill fails it would cause a sell off in the JGB market
(NZ) Statistics New Zealand revises 2011 GDP using new industry classification to 1.1% from 1.4%; Q4 GDP remains unchanged at 0.3%
(JP) Japan Fin Min Azumi: paying close attention to Greek political developments; Greece issues are the greatest concern for Japan right now
(AU) Moody's Analyst: Australia banks are unlikely to pass on the full RBA cut; There is more downward pressure on Australian banks
(JP) Japan FY11/12 national pension contribution ratio expected to reach a record low - Nikkei
Equities
SNE: Sony and Panasonic Officials: The companies have held prelim talks on OLED TV partnership
HDF.AU: Receives cash offer of A$2.35/shr from Pipeline Partners Australia
PBG.AU: No offer made from KKR, a definitive proposal in the near term is not likely; Affirms FY12 outlook EBITDA A$125-130M (ex-items)
WBC.AU: Cuts mortgage rate for 1 and 3 year loans by 15bps
NSANY: CEO targets boosting capacity to 8M units by FY16 - Japan press
Bank of East Asia, 23.HK: Largest shareholder, CaixaBank, is planning to increase its stake above 20% from its current 17.1% - HK Standard
GRPN: Reports Q1 $0.02 v $0.01e, R$559M v $531Me; issues IPO lockup information; +17.9% after hours