China PMI Improves; RBA Cuts More Than Expected; Strong Yen Weighs On JapanEconomic Data
(AU) RESERVE BANK OF AUSTRALIA (RBA) CUTS CASH TARGET RATE BY 50BPS TO 3.75%, MORE THAN EXPECTED
(CN) CHINA APR PMI MANUFACTURING: 53.3 V 53.6E (5th consecutive m/m increase; 13-month high)
(KR) SOUTH KOREA APR EXTERNAL TRADE BALANCE: $2.15B V $3.0BE
(KR) SOUTH KOREA APR CONSUMER PRICE INDEX (CPI) M/M: 0.0% V 0.3%E; Y/Y: 2.5% V 2.8%E (multi-month low); CORE CPI Y/Y: 1.8% V 1.9% PRIOR
(NZ) NEW ZEALAND Q1 AVERAGE HOURLY EARNINGS Q/Q: 1.3% V 0.0% PRIOR; PRIVATE WAGES EXCLUDING OVERTIME: 0.5% V 0.6%E; INCLUDING OVERTIME: 0.5% V 0.5%E
(AU) AUSTRALIA MAR RPDATA-RISMARK HOUSE PRICE ACTUAL: -0.8% V 0.2% PRIOR (3-month low)
(AU) AUSTRALIA Q1 HOUSE PRICE INDEX Q/Q: -1.1% V -0.5%E (fifth consecutive quarter of decline); Y/Y: -4.5% V -3.9%E
(ID) INDONESIA MAR TOTAL TRADE BALANCE: $840M V $760ME
(AU) AUSTRALIA APR AIG PERFORMANCE OF MANUFACTURING INDEX: 43.9 V 49.5 PRIOR
(JP) JAPAN APR VEHICLE SALES Y/Y: 92.0% V 78.2% PRIOR
(ID) INDONESIA APR INFLATION M/M: 0.2% V 0.2%E; Y/Y: 4.5% V 4.5%E; CORE INFLATION Y/Y: 4.2% V 4.2%E
(TH) THAILAND APR CONSUMER PRICE INDEX (CPI) M/M: 0.4% V 0.7%E; Y/Y: 2.5% V 2.9%E; CORE CPI Y/Y: 2.1% V 2.4%E
(MX) Mexico Mar YTD Budget Balance (MXN): -49.5B v -24.3B prior
Markets Snapshot (as of 04:30GMT)
Nikkei225 -1.3%
S&P/ASX +0.6%
Kospi closed
Taiwan Taiex closed
Singapore Straits Times Index closed
Shanghai Composite closed
Hang Seng closed
Jun S&P Futures +0.1% at 1,395
June gold +0.2% at $1,667/oz
June Crude unchanged at $104.84
Overview/Top Headlines
As expected the Reserve Bank of Australia (RBA) cut rates today, but it was a larger-than-expected 50bps. The RBA indicated that inflation was the trigger for the rate cut and that borrowing rates were now appropriate. This could indicate that the RBA is done cutting rates for now, which would counter some analysts belief that there will be a 25bps cut in June. AUD/USD fell over 75 pips and then continued to decline to $1.0324, over 100 pips. Australia 10-year yields fell 13bps.
USD/JPY fell over 0.2% to ¥79.67, putting pressure on Japan equities. Japan MoF Official Nakao said that Japan will take appropriate steps on the yen and that the rise in JPY last week is somewhat rapid. This is especially hard on the markets after the BoJ announced additional easing last week.
China reported April PMI manufacturing at 53.3 was lower than expected, but still the 5th consecutive m/m increase and a 13-month high. Components of the PMI fluctuated with no stand outs. This will hurt the argument for any sort of easing to China's policy or rates. With China markets closed the S&P ASX benefited rising over 0.6% in addition to pricing in the rate cut.
Non-voting FOMC member Fisher commented that the Fed is doing well on price stability and that monetary policy alone will not reduce unemployment it is a very limited tool. Also noted that the Fed has done enough easing but it is not time to start tightening yet.
After a smaller-than-expected trade surplus South Korea Trade Minister Han said that 2012 trade surplus may be lower than initially expected; 2012 exports may fall short of expectations, attributed to the situation in Europe and China. South Korea also recorded a multi-month low in CPI in April. USD/KRW was up 0.1% to KRW1,131.
Speakers/Geopolitical/In The Press
(AU) Australia PM Gillard Labor government's approval rating in the latest poll has fallen again; many see upcoming budget as a make or break for her government. - SMH
(NZ) New Zealand PM Key: Reiterates the Govt is on track to return budget to surplus by FY14/15.
(TW) Taiwan government has lowered its 2012 GDP target to 3.38% from 3.85%.
(BR) Brazil President Rousseff: Interest rates must fall in order for domestic economy to reach its full potential; Government is firm on policies to push private sector banks to lower rates.
Equities
ALS.AU: Dulux makes A$188M offer, A$2/shr, to acquire Alesco Group (43% premium to Monday close).
Hyundai Motor, 005380.KR: Will start a 3rd shift at its Alabama plant starting in September, creating 3,000 jobs. - financial press
QAN.AU: Exec: May cut over 1K jobs at Melbourne airports; Does not need to have 3 Australian maintenance bases.
NAB.AU: Will restructure Yorkshire and Clydesdale branch networks in the UK since no buyer was found; Selling A$9.6B commercial property portfolio. - The Australian
US Equities
MAS: Reports Q1 $0.05 (adj) v $0.00e, R$1.88B v $1.8Be; +3.1% after hours
APC: Reports Q1 $0.92 (ex items) v $0.83e, R$3.45B v $3.4Be; +0.9% after hours
TXRH: Reports Q1 $0.31 v $0.29e, R$324.9M v $324Me; +2.6% after hours
IDTI: Reports Q4 $0.05 v $0.03e, R$119M v $117Me; +6.9% after hours
PLXT: Integrated Device Technology, Inc. to Acquire PLX Technology for $7.00/share cash in $330M deal; +65.6% after hours