TradeTheNews.com Asian Market Update: Japan's Tokyo Core CPI for May turns positive for the first time since mid-2011; Nikkei225 recovers after slump

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TradeTheNews.com Asian Market Update: Japan's Tokyo Core CPI for May turns positive for the first time since mid-2011; Nikkei225 recovers after slump

31.05.2013 08:36 Friday
***Economic Data***
- (JP) JAPAN MAY TOKYO CPI Y/Y: -0.2% V -0.4%E; TOKYO CPI EX-FRESH FOOD Y/Y: +0.1% V -0.2%E (1st rise since June 2011)
- (JP) JAPAN APR NATIONAL CPI Y/Y: -0.7% V -0.7%E; NATIONAL CPI EX-FRESH FOOD: -0.4% V -0.4%E
- (JP) JAPAN APR OVERALL HOUSEHOLD SPENDING Y/Y: 1.5% V 3.0%E (4th consecutive rise)
- (JP) JAPAN APR JOBLESS RATE: 4.1% V 4.1%E; JOB-TO-APPLICANT RATIO: 0.89 V 0.87E
- (JP) JAPAN APR PRELIMINARY INDUSTRIAL PRODUCTION M/M: 1.7% V 0.6%E (5th straight rise); Y/Y: -2.3% V -3.4%E
- (JP) JAPAN MAY MARKIT/JMMA MANUFACTURING PMI: 51.5 V 51.1 PRIOR (highest level since Aug 2011)
- (NZ) NEW ZEALAND MAY ANZ BUSINESS CONFIDENCE: 41.8 V 32.3 PRIOR (highest since Jul 2011); ANZ ACTIVITY OUTLOOK: 34.3 V 30.3 PRIOR
- (NZ) NEW ZEALAND Q1 TERMS OF TRADE INDEX: 4.1% V 1.5%E (1st rise in 7 quarters; 3-yr high)
- (NZ) NEW ZEALAND APR MONEY SUPPLY M3 Y/Y: 6.5% V 7.0% PRIOR
- (AU) AUSTRALIA APR PRIVATE SECTOR CREDIT M/M: 0.3% V 0.3%E (5th month of increase); Y/Y: 3.1% V 3.0%E
- (SG) SINGAPORE APR M1 MONEY SUPPLY: 14.1% V 15.5% PRIOR; M2 MONEY SUPPLY: 9.6 % V 8.5% PRIOR
- (SG) SINGAPORE APR BANK LOANS & ADVANCES Y/Y: 20.0% V 19.7% PRIOR
- (SG) SINGAPORE APR CREDIT CARD BAD DEBTS (SGD): 20.4M V 19.9M PRIOR; CREDIT CARD BILLINGS: 3.33B V 3.35B PRIOR

- (UK) UK GFK MAY CONSUMER CONFIDENCE: -22 V -26E (6-month high)
- (US) Weekly Fed Balance Sheet Assets Week ending May 29th: $3.342T v $3.356T (**record high) prior; M1: +$4.8B v +$3.3B prior; M2: -$11.9B v +$12.7B prior
- (MX) Mexico April budget balance (MXN): -300M; YTD budget balance (MXN) 39.8B v 40.2B prior
- (AR) Argentina Apr Supermarket Sales Y/Y: +11.8% v 14.5% prior

***Markets Snapshot (as of 03:00 GMT)***
- Nikkei225 +1.6%
- S&P/ASX +0.2%
- Kospi +0.5%
- Shanghai Composite flat
- Hang Seng -0.2%
- Jun S&P500 flat at 1,654
- Aug gold +0.6% at $1,419/oz
- Jul crude oil flat at $93.63/brl

***Observations/Insights***
- Asian equity markets are mixed to positive in the final trading session of the week, and it is once again the volatility in Japan that is stealing the spotlight from the rest of the region. After a fall of over 5% overnight that had critics crying foul over its recent rally, Nikkei225 recovered over 1.5% to trade back above 13,600. In the bond market, 10-year JGB yields remain contained below 0.9% with an orderly 2bp drop amid reports that Japanese banks have already reduced their JGB holdings to the lowest levels in nearly 2 years. Most notably, the overall Abenomics criticized amid the freefall overnight received a much needed shot in the arm from the latest Japan inflation data, where the stripped-down and most recent Tokyo core component for the month of May showed its first on-year increase since the middle of 2011. USD/JPY, which had been on the defensive after a slightly weaker than expected US GDP report, rose to session high 101.20 after the release of Japanese inflation and also improved industrial production prints. Likewise, EUR/JPY came off the US session lows to trade up to 132 and AUD/JPY rose above the US session high to trade within an earshot of the 98 handle before succumbing to relative AUD weakness ahead of tomorrow's off-market-hour release of China Manufacturing PMI.

***Fixed Income/Commodities***
- (CN) PBoC sets yuan mid point at 6.1796 v 6.1309 prior close (record high setting for yuan)
- (AU) Australia MOF (AOFM) sells A$700M in 2018 bonds, avg yield 2.82%; Bid-to-cover 4.93x
- (JP) Bank of Japan (BoJ): Apr JGB holdings by major Japan banks are down 10.8% m/m; below 100T for the first time in nearly 2 years - financial press

***Speakers/Political/In the Papers***
- (JP) Japan Econ Min Amari: focusing on BOJ measures to achieve 2% inflation target in 2 years
- (JP) Former BoE member Posen: Abenomics is right to have three pronged strategy; Fiscal policy is the most difficult component of Abe's "three arrows"
- (JP) BOJ deputy gov Nirohi Nakaso: Important for BOJ to end deflation; Japan to hit its inflation target in latter half of projection period
- (JP) Japan Fin Min Aso: Currently not mulling plans to delay sales tax increase - financial press
- (JP) Japan PM Abe: To include use of nuclear power as part of the cabinet's growth strategy plan to be unveiled next week - Japanese press
- (JP) Former Morgan Stanley economist Stephen Roach: Concerned Japan PM Abe and BOJ Gov Kuroda are resorting to "financial engineering" to fix economy; Investors concerned that if there is no follow through on structural reforms, then the program may not gain traction - CNBC
- (JP) Japan's Financial Services Agency (FSA) aims to implement new FX margin trading rules designed to protect investors and limit scope for speculation - Japan press

- (CN) China big four banks' May new yuan loans seen at CNY300B - Chinese press
- (CN) China govt may allow county-level LGFV (Local Government Financing Vehicle) aggregate bond - Chinese press
- (CN) Former World Bank chief economist Justin Lin: China growth will be driven by investment - Chinese press
- (CN) China Ministry of Commerce (MOFCOM) spokesperson: Considering possibility of joining TPP talks ahead of the next round of negotiations next month - Shanghai Daily

- (AU) Australia former PM Rudd: confirms he intends to contest election and would serve out a full term
- (NZ) RBNZ Gov Wheeler: May take as long as 3-5 years to close the gap between housing supply and demand in Auckland if supply measures left alone - NZ press

- (KR) Bank of Korea (BOK) Gov Kim: Withdrawal of monetary stimulus could significantly affect emerging markets; Fed should issue a warning before tightening policy
- (TH) Thailand Commerce Ministry revises April exports growth to 2.89% from 10.5% prior at $17.4B

- (UK) British Chambers of Commerce (BCC) raises economic outlook (1st raise since 2008); sees 2013 GDP at 0.9% vs 0.6% prior, 2014 GDP at 1.9% v 1.7% prior

***Equities***
- NFLX: To Join the NASDAQ-100 Index Beginning June 6, 2013
- KKD: Reports Q1 $0.20 v $0.16e, R$120.6M v $116Me; +10.5% afterhours
- GES: Reports Q1 $0.14 v $0.08e, R$549M v $543Me; +10.7% afterhours
- LGF: Reports Q4 $0.61 (adj) v $0.45e, R$785M v $731Me; +3.9% afterhours
- ESL: Reports Q2 $1.12 v $1.21e, R$499.6M v $506Me, lowers outlook; -1.9% afterhours

- MYE.AU: Lowers FY forecast NPAT A$11.1-11.6M v A$12-13M prior, Rev A$245-250M v A$245-255M prior due to uncertainty on project timing
- ORG.AU: CEO cautions on possibile difficulties facing Australia coal industry - Australian press
- YAL.AU: Exec: Plans to reduce costs by an additional 11% in 2013; reaffirms production targets - AGM comments

- TEPCO 9501.JP: President confirms earlier reports of 600B request from the govt
- JAL 9201.JP: President: Reservations for flights on Dreamliner 787 for June are solid - Nikkei News
- Komatsu 6301.JP: President: Does not plan to alter price policy despite weaker JPY; Sales volume in China is on par with last April, decline has stopped - Nikkei News interview
- Sony 6758.JP CEO: premature to speculate about board decision on spin off of assets; going to take time to objectively consider the Loeb plan - CNBC interview

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