Economic Data
(JP) BANK OF JAPAN (BOJ) LEAVES TARGET RATE RANGE UNCHANGED BETWEEN 0.0% TO 0.10% (AS EXPECTED); Keeps economic assessment unchanged; Maintains asset purchase fund at ¥70T
(JP) JAPAN APR MERCHANDISE TRADE BALANCE TOTAL: -¥520B V -¥471BE; ADJUSTED: -¥480B V -¥617BE
(US) NORTH AMERICA SEMI EQUIPMENT INDUSTRY APR SALES BOOK TO BILL RATIO: 1.10 V 1.13 PRIOR (3RD CONSECUTIVE MONTH ABOVE PARITY, 1st decline in 7 months)
(AU) AUSTRALIA APR DEWR INTERNET SKILLED VACANCIES M/M: -0.8% V -0.5% PRIOR (4-month low)
(AU) AUSTRALIA MAR WESTPAC LEADING INDEX M/M: 0.4% V 0.0% PRIOR
(AU) AUSTRALIA MAR CONFERENCE BOARD LEADING INDEX M/M: +0.2% V 0.0% PRIOR
(SG) SINGAPORE APR CPI M/M: 0.5% V 0.3%E; Y/Y: 5.4% V 5.2%E
Markets Snapshot (as of 05:00GMT)
Nikkei225 -1.8%
S&P/ASX -1.1%
Kospi -1.3%
Shanghai Composite -0.6%
Hang Seng -1.7%
June S&P Futures -0.5% at 1,308
June gold flat -1.1% $1,556/oz
July Crude -0.8% at $91.14
Overview/Top Headlines
Short-covering on hopes of China stimulus appears to have run its course, as European worries re-emerged late in the US session and build more bearish momentum in Asian hours. Former Greek PM Papademos indicated there is a real risk Greece would exit the euro given the increasingly apparent political stalemate surrounding austerity rejection. Papademos did suggest that the pain of the "grexit" would be worse than heeding lender demands and subsequently clarified his position that no preparations for an exit were taking place, but the damage had been done, sending EUR back below $1.27. US equities finished near the lows, AUD and NZD fell to 6-month lows against the greenback, while front-month crude oil fell to 2012 lows. Attention turns to the informal meeting of European officials in Brussels later today, even though the momentum for a more radical solution such as the launch of euro bonds that boosted risky assets early in the week is clearly waning.
As widely expected, Bank of Japan left its policy target, asset purchase fund, and economic assessment unchanged, reiterating its view of "Japan's economy shifting toward a pick-up phase, although activity has remained more or less flat." Despite being telegraphed by Japanese press and disappointments in the MoF reverse auctions in recent session, Japanese Yen fell over 30 pips to ¥79.50. JPY gains also effectively reversed the weakness overnight after a 2-notch cut of Japan's sovereign rating by Fitch. Moody's indicated it was keeping its rating and stable outlook, but pointed to the parliament debate on taxes as critical for future ratings. PM Noda seized on those comments, reminding that markets are closely monitoring consumption tax increase legislation developments.
World Bank matched the overnight OECD cut of China 2012 GDP target to 8.2%, which is still above the 7.5% official goal. China's top 4 banks were reported to have lent only CNY34B through the first 3 weeks of May, supporting last month's indication that May lending is far below pace. China govt officials continued to talk up fiscal stimulus objectives, as Vice Premier Li Keqiang called for expansion of domestic demand through affordable housing and health care reform projects.
Speakers/Geopolitical/In the press
(KR) South Korea Financial Supervisory Service (FSS): Bad debt ratio for loans by local lenders in Apr rose to 1.21% of total from 1.09% in Mar - Korean press
(IN) India PM Singh: Govt needs to take steps to boost foreign and local investment - US financial press
(JP) Japan PM Noda: Staying in close cooperation with BOJ regarding deflation; Still expects decisive steps from BOJ; not at a stage where we need to discuss things like revising the BOJ law
(CN) According to China Ministry of Land and Resources, land area of real estate projects under construction reached 400K hectares; Expected to keep up with rising housing demand for the next 10 years - China Daily
(US) According to the latest NBC News poll, Pres Obama holds a 47% to 43% lead over expected Republican nominee Mitt Romney
(ES) Tens of thousands of striking teachers and their students marched in Spain today in protest to govt cuts to education spending - financial press
(ES) Spain govt to outline details of Bankia bailout on Wednesday; May announce the size of liquidity injection - financial press
Equities
(JP) Nikkei225 falls to lowest level since Jan below 8,570
MQG.AU: Macquarie and BofA/ML appointed as lead bookrunners for proposed listing of Altain Khuder, the owner of Tayan Nuur iron ore mine in the southwest of Mongolia - financial press
US Equities
DELL: Reports Q1 $0.43 v $0.46e, R$14.4B v $14.9Be; -12.7% afterhours
PETM: Reports Q1 $0.85 v $0.73e, R$1.63B v $1.6Be; +9.7% afterhours
GES: Reports Q1 $0.30 v $0.27e, R$579.3M v $572Me; +7.0% afterhours