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Market Update: Amid an Influx of Earnings, Banking Sector Headwinds in Focus as Mixed Trade Prevails
Today's important market events:
[USD] GDP (QoQ - Q1) - 14:30 CEST
[USD] Initial Jobless Claims - 14:30 CEST
[USD] Pending Home Sales (MoM - Mar) - 16:00 CEST
APAC equities displayed a mixed performance, as several major indices remained subdued due to headwinds in the US banking sector, while market participants sifted through a plethora of earnings releases.
European equity futures are pointing towards a weaker open, with Euro Stoxx 50 futures down 0.3% after the cash market recorded a decline of 0.7% in the previous session.
The DXY has been devoid of a clear trend, while the EUR/USD pair hovers around the 1.1050 level. Meanwhile, GBP/USD has retreated below 1.25, with the NZD outperforming its counterparts.
In the US, the House narrowly passed the Republican debt ceiling bill by a margin of 217 to 215. However, President Biden has played down the likelihood of it becoming law.
Australia/New Zealand:
- The ASX 200 index opened down 0.1% at 7,306 today.
- Australia's Q1 Export Price Index came in at a quarterly increase of 1.6%, beating expectations, while the Import Price Index fell by 4.2%, missing expectations. Financial markets have priced out the risk of a May rate hike by the Reserve Bank of Australia following the release of Q1 and March CPI data, according to the financial press.
- Blackmores (BKL.AU) has agreed to a cash offer of A$95/share from Kirin, with a total deal value of approximately A$1.88 billion. The largest shareholder will vote for the transaction.
- New Zealand's Prime Minister, Chris Hipkins, gave a pre-budget speech stating his desire to see government spending as a percentage of GDP settle in the low 30s, down from the peak of 34-35% during the Covid pandemic.
- The New Zealand Treasury expects Cyclone Gabrielle to add 0.4% to Q1 and Q2 inflation, estimating total damage between NZ$9 billion and NZ$14.5 billion.
- New Zealand sold a total of NZ$400 million versus NZ$400 million indicated in 2028, 2033, and 2051 bonds with bids totaling NZ$1.4 billion. The country's April Business Confidence came in at -43.8, slightly worse than the previous reading of -43.4.
China/Hong Kong:
- The Hang Seng index in Hong Kong opened down 0.1% at 19,736 today, while the Shanghai Composite index in China opened down 0.2% at 3,256.
- The CEO of Hong Kong's Securities Commission announced plans to issue crypto exchange license guidelines in May.
- The People's Bank of China's Open Market Operation sold CNY93 billion versus CNY95 billion in 7-day reverse repo, net injecting CNY59 billion versus CNY63 billion prior. The bank set the Yuan reference rate at 6.9207, down from the previous rate of 6.9237.
- Chinese President Xi Jinping spoke with Ukrainian President Volodymyr Zelenskiy for the first time since the Ukraine War started via a call, telling Zelenskiy that negotiations are the only solution for the conflict.
- The US Commerce Secretary, Gina Raimondo, has said that the US needs to continue to put Chinese companies on the export control list, according to Senate testimony.
- China's Mar YTD Industrial Profits came in at a decline of 21.4%, better than the previous reading of 22.9%, while the Vice Human Resources Minister has reiterated that the employment situation is under pressure and that the country will strive to achieve its job creation target for 2023.
Japan:
- Japan's Nikkei 225 index opened down 0.3% at 28,340 today.
- Former Bank of Japan (BOJ) Official Wakatabe has stated that a forward guidance change is a possibility at the upcoming BOJ decision on Friday, but that he would be surprised if the BOJ changes YCC.
- Japan released its weekly flows data for the period ended April 21, showing Japan buying of foreign bonds at -Â¥1.1 trillion versus +Â¥500.2 billion prior, while foreign buying of Japan stocks came in at +Â¥343 billion, down from +Â¥1.9 trillion prior.
- The Bank of Japan offered to buy 5-10 year JGBs at a fixed rate of 50bps, while also opening a window to buy
South Korea's stock market, the Kospi, opened flat at 2,484, as investors awaited further developments in the country's economy. The May Business Manufacturing Survey reported a positive sentiment, with a reading of 72, up from the previous month's 69.
US President Biden has reiterated America's commitment to extended deterrence for South Korea, stating that a nuclear attack by North Korea would result in the end of the regime responsible for such an action.
Samsung Electronics (005930.KR) has reported its final Q1 earnings, showing a net profit of KRW 1.58 trillion, compared to KRW 11.3 trillion the previous year. The company's operating profit stood at KRW 640 billion, down from KRW 14.1 trillion in the same period last year, while revenue totaled KRW 63.7 trillion, a decline from KRW 77.8 trillion year-on-year.
In other parts of Asia, Metro Pacific Investments (MPI.PH) has received an offer of PHP 4.63 per share from Mitsui, with a total offer of ¥116.9 billion (Mitsui's part is ¥31.9 billion). Indonesia's Trade Minister has announced plans to cut the Palm Oil domestic market obligation to export ratio from 1:6 to 1:4.
In North America, preliminary durable goods orders in March exceeded expectations, rising 3.2% compared to the forecasted 0.7%. Meanwhile, wholesale inventories for the same period remained steady at 0.1%. Goldman Sachs has noted that July could be the deadline for the US debt ceiling and has observed an acceleration in US tax inflows.
Finally, in Europe, Germany's Finance Ministry has predicted a public-sector deficit of 4.25% of GDP for 2023, while Finance Minister Lindner has reiterated the government's view that the EU fiscal proposal needs significant adjustment.
Looking ahead, investors are keenly awaiting updates on key economic indicators such as the US GDP & PCE Prices Advance, as well as the CBRT Policy Announcement and remarks from ECB's Panetta. In addition, supply figures from Italy and the US are also on the radar.
Several major companies are slated to report their earnings, including Delivery Hero, Hellofresh, STMicroelectronics, Deutsche Bank, TotalEnergies, Carlsberg, Sanofi, BASF, AstraZeneca, Unilever, LSE, Barclays, Amazon, AbbVie Exxon, Mastercard, Linde, Lilly, T-Mobile, Altria & Activision.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team
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