A mixed day for the region with mostly modest moves. The mainland Chinese markets initially traded well following their three day weekend. However, they were unable top maintain those gains. Australia bounced after lagging last week.
Sectors were fairly split. Basic materials are the day’s clear winner better by more than 1% with energy improving c. 0.5%. To the downside by c. 0.5% are consumer discretionary and utilities.
There are a number of reports indicating the PBoC may once again make “targeted” decreases to the reserve-ratio requirement this month. The central bank will also make use of its medium term lending facility with CNY 367b in such loans maturing.
Other Important Headlines
- Press reports indicate BHP +1.7% is preparing to cut more than 700 white collar jobs.
- Jefferies initiated coverage on a number of Macau gaming names but it didn’t help their trading performance. Sands China -1.4% and Wynn Macau -0.5% are rated buys while MGM China -2.5% and Galaxy Ent. -2.4% are holds.
- The U.K. is reviewing the gaming renewal practices of Sony -0.2% and Nintendo -1.8% for potential competition and fairness violations.
- Shinsegae Grp Vice Chair Chung will increase his stake in E-Mart +5.25% to 10.3% from 9.8%.
- China’s foreign currency holdings gained for a fifth month during March increasing by $8.58b to $3.1t. Its gold holdings rose for the 4th consecutive month.
- After the close, Gree announced its parent will sell a 15.0% stake in the company.
Europe spent the first few hours of the day to the downside. However, the markets have managed to reach the flat line, as a whole. There is a mix across the various indices. Volumes are once again dreadful.
The current Brexit deadline is Friday. PM May continues talks with the Labour Party while also planning to speak with EU leaders via phone today. Tomorrow, she will meet with German Chanc. Merkel and French Pres. Macron in Brussels tomorrow.
The commodities markets are generally higher. Iron ore is strong with Citibank bullish. Crude has been trading higher with fighting in Libya raising production concerns.
- BMW -0.3% is recouping most of the day’s initial losses. After Friday’s close, the car maker announced it will take a provision of at least €1b for EU antitrust and emission fines. As a result, it is lowering its FY auto EBIT margin outlook by 1 to 1.5% points.
- Merck KGAA +0.4% has improved its bid for Versum Materials to $53 per share. Versum is recommending the offer. The prior bid was $48 per share. This leaves Entergis out in the cold.
- The German press say the ECB’s banking authority will need to see “significant synergies” from a Deutsche Bk -1.7%, Commerzbank -2.5% merger.
On Our Side of the Pond
- Pinterest has set the IPO price range at $15 to $17 per share. The issue size will be 75m shares and the roadshow commences today.
- Boeing is weaker pre-market following Friday’s announced 737 production cuts. Bank of America is downgrading the shares.
- US Durable Goods are due while up in Canada housing data will be released.
Markets and Macro
|JN||BoP Current Account Balance||Feb||¥2633.5b||¥2676.8b||¥600.4b||—|
|JN||BoP Current Account Adjusted||Feb P||¥1920.9b||¥1957.6b||¥1833.0b||—|
|JN||Trade Balance BoP Basis||Feb P||¥591.3b||¥489.2b||-¥964.8b||—|
|AU||ANZ Job Advertisements MoM||Mar||—||-1.70%||-0.90%||-0.80%|
|JN||Consumer Confidence Index||Mar||41.5||40.5||41.5||—|
|JN||Eco Watchers Survey Current SA||Mar||47.8||44.8||47.5||—|
|JN||Eco Watchers Survey Outlook SA||Mar||49.1||48.6||48.9||—|
|GE||Current Account Balance||Feb||19.0b||16.3b||18.3b||18.8b|
|GE||Exports SA MoM||Feb||-0.50%||-1.30%||0.00%||0.10%|
|GE||Imports SA MoM||Feb||-0.60%||-1.60%||1.50%||1.40%|
|FR||Bank of France Ind. Sentiment||Mar||101||100||101||100|
|EC||Sentix Investor Confidence||Apr||-2||-0.3||-2.2||—|
|UK||BoE/TNS Inflation Next 12 Mths||Feb||—||3.20%||3.20%||—|
|CA||Building Permits MoM||Feb||2.00%||—||-5.50%||—|
|CA||Bloomberg Nanos Confidence||5-Apr||—||—||55.4||—|
|US||Factory Orders Ex Trans||Feb||—||—||-0.20%||—|
|US||Durable Goods Orders||Feb F||-1.60%||—||-1.60%||—|
|US||Durables Ex Transportation||Feb F||0.10%||—||0.10%||—|
|US||Cap Goods Orders Nondef Ex Air||Feb F||—||—||-0.10%||—|
|US||Cap Goods Ship Nondef Ex Air||Feb F||—||—||0.00%||—|
|UK||BRC Sales Like-For-Like YoY||Mar||-0.80%||—||-0.10%||—|