Morning Report APAC: Asia equities still on a roll
- Malaysia’s ringgit extends gains in early trade to seven-month high over USD
- US crude drops toward $38/barrel due to an increase in American supplies
- ADP employment rose 200,000 in March, higher than expectations of 195,000
By Saxo APAC Sales Trading
Economic data of the day (Singapore Time - GMT + 8 )
0500: KRW – Business Survey Non-Manufacturing (Actual 71 vs. 67) Manufacturing (A:70 vs 66)
0700: KRW – Industrial Prod MoM (Exp. 0%, Prev. -1.8%) YoY (Exp. -0.2%, Prev. -1.9%)
0800: NZD – Business Confidence (Prev. 7.1)
08:00: AUD – New Home Sales (Prev. 3.1%)
08:30: AUD – Private Sector Credit MoM (Exp. 0.5%, Prev. 0.5%) YoY (Exp. 6.5%, Prev. 6.5%)
1300: JPY – Housing Starts YoY (Exp. -2.4%, Prev. 0.2%)
1300: JPY – Construction Orders YoY (Prev. -13.8%)
1400: EUR –German Retail Sales MoM (Exp. 0.4%, Prev. 0.7%) YoY (Exp.2.2%, Prev. -0.8%)
1555: EUR –German Unemployment Change (Exp. -6k, Prev.-10k)
1630: GBP – Mortgage Approvals (Exp. 73.5k, Prev. 74.6K)
1630: GBP – GDP QoQ (Exp. 0.5%, Prev. 0.5%) YoY (Exp.1.9%, Prev. 1.9%)
1630: HKD – Retail Sales Value YoY (Exp. -7.8%, Prev. -6.5%) Volume YoY (Exp.-6.5%, Prev. -5.2)
1700: EUR – CPI YoY (Exp. -0.1%, Prev. -0.2%) Core YoY (Exp. 0.9%, Prev. 0.8%)
2030: CAD – GDP MoM (Exp. 0.3%, Prev. 0.2%) YoY (Exp.1.1%, Prev. 0.5%)
2030: USD – Initial Jobless Claims (Exp. 265k, Prev. 265k) Continuing Claims (Exp. 2200k, Prev. 2179k)
2100: USD – ISM Milwaukee (Prev. 55.2)
2145: USD – Chicago Purchasing Manager (Exp. 50.7, Prev. 47.6)
1300: USD – Fed’s Evans Speaks on Econ and Policy
1500: GBP – Bank of Governor Mark Carney Speaks at FSB Briefing in Tokyo
1500 – IMF’s Lagarde, PBOC’s Zhou speak at French Treasury seminar
2145: USD – Fed’s Evans Answers Q&A on Econ and Policy in NY
- US: ADP employment rose 200,000 in March, higher than expectations of 195,000 and confirmed ongoing robust labour market conditions.
- Slight upside surprise in the flash German CPI inflation read for March rose 0.8% month on month and 0.1% year on year. This suggests a little upside risk to tomorrow's flash euro area inflation release for March
- Chicago Federal Reserve president Charles Evans spoke twice, initially to CNBC and then again in a prepared speech to the Forecasters Club in New York. He saw risks tilted towards the downside, suggesting a “very shallow path” for interest rates was likely in the next three years. Evans said the “hurdle is high” for an April hike and said seasonal issues with inflation measurements could muddy the data until late summer. Evans is the most overtly dovish of the current regional Fed presidents but also included some more confident comments, saying US economic fundamentals are quite good and repeating last week’s view that at least two hikes are probable this year.
- Europe: There was a dip in the headline Economic Sentiment Indicator in March from 103.9 to 103.0. Industrial and service sector confidence declined despite an improvement in March’s PMIs. By country, German sentiment was steady but sentiment in France and Italy declined.
COP, BRL, MXN and ZAR gained 1.5%, 0.7%, 0.3% and 0.8% against the USD, respectively. In G10, CAD and NOK were 0.6% and 0.5% higher, but the EUR posted only a modest gain 0.2%, and JPY was nearly unchanged during the session.
Watch for quarter-end flows to dominate currencies today.
Foreign exchange movements
European sovereign bond yields gradually rose through the day, with 10-year yields up 2bps in the UK and 2bps in Germany. US Treasury yields were also higher, with the 10-year 2bps higher, supported by the solid ADP report.
It was generally a positive session for equities. In Europe, steelmakers were in demand after India’s Tata Steel announced plans to sell its UK business. The announcement sparked hopes of Continental consolidation. ThyssenKrupp surged 8.3%, ArcelorMittal 3.6% and Outokumpu lifted 6.5%.
US markets opened with the major indices enjoying a still-fresh tailwind from the Fed chair Janey Yellen's dovish comments yesterday. Consumer services and insurance were the day's strongest sectors, while real estate and utilities lagged.
After the close, Micron reported a beat on earnings, but missed on revenue, citing 10% declines in both DRAM average selling prices and sales volume.
Watch for Fed optimism to continue to push stocks higher today in the Asian session.
Japan- Colopl (3668 JP): To launch tender offer for Eighting (3785 JP)
- Evolable Asia (6191 JP): Starts trading on Mothers after IPO priced at 1,800 yen
- Hitachi Transport (9086 JP): Confirms capital tie-up with Sagawa; shares rose 5.8% yesterday after Nikkei report on deal
- Mitsumi Electric (6767 JP): Holders to receive 0.59 share of Minebea (6479 JP) for each share held in merger; equals around 504 yen/share at today’s close vs Mitsumi’s average of 572 yen since deal announced in December; Mitsumi also posts wider-than- expected preliminary. full-year losses
- PR Times (3922 JP): Starts trading on Mothers after IPO priced at JPY 1,340
- Sharp (6753 JP): Foxconn announces it will acquire company Nikkei tweets
- Takata (7312 JP): Fell 19% in last 20 minutes of trading yesterday after company said to put worst-case airbag recall costs 2.7 trn yen
- Toshiba (6502 JP): Selling 80.1% stake in lifetsyle unit to Midea for JPY 53.7 bn; expects to post pre-tax gain of JPY90 bn for April to June quarter
– Edited by Adam Courtenay
This report was compiled by the Saxo APAC Sales trading team in Singapore – the home of social trading. Follow the team on @SaxoStrats or post your comment below to engage with Saxo Bank's social trading platform. Follow us on @SaxoStrats on Twitter
All material contained herein is provided for your general information. The information and commentaries are not intended to be and do not constitute financial advice, investment advice, trading advice or any other advice or recommendation of any sort offered or endorsed by Saxo Capital Markets Pte. Ltd. (“SCM SG”). Any expression of opinion (which may be subject to change without notice) is personal to the presenter and/or author; they do not reflect the view or opinion of SCM SG or its affiliates, neither do they constitute an endorsement of SCM SG’s view or analysis of the same.
None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. SCM SG does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment based on any commentaries or information provided here.
For further information, please click here.
Saxo Capital Markets Pte Ltd ("Saxo Capital Markets") is a licensed subsidiary of Saxo Bank A/S, an online trading and investment specialist. Saxo Capital Markets serves as the APAC headquarters and holds a capital markets services licence under the Monetary Authority of Singapore; and a commodity broker licence issued by the International Enterprise Singapore. Clients can trade Forex, CFDs, Stocks, Futures, Options and other derivatives via SaxoWebTrader and SaxoTrader, the leading multi-asset online trading platforms.
Trading risks are magnified by leverage - losses can exceed your deposits. Trade only after you have acknowledged and accepted the risks. You should carefully consider whether trading in leveraged products is appropriate for you based on your financial circumstances. Please consider our Risk Warning and General Business Terms before trading with us. Please see full General Disclaimer.
Thousands of serious traders receive free news and analysis from Saxo Capital Markets each day. Saxo Capital Markets never sends these emails unsolicited; they are sent following acceptance of your membership and subscription request by Saxo Capital Markets at saxomarkets.com.sg. If you do not wish to receive any emails from Saxo Capital Markets in the future, please reply to this email with the word "UNSUBSCRIBE" in the subject header.
Samsung Hub | 3 Church Street | # 30-01 | Singapore 049483
Company No. 200601141M