Quiet day amid JP/CN holiday as HK continues to outperform

Asia Market Update: Quiet day amid JP/CN holiday as HK continues to outperform; JPY grinds 3-wk high; Apple +6% A/H post-Q2 earnings & $110B stock buyback (US record-high); Focus on US Apr NFP, Apr ISM Services tonight.

General trend

- Yen continued to strengthen today without apparent intervention (for a change); Falling UST yields and rising JP yields saw JPY steadily rise to its highest level vs USD in three weeks at 152.84 (UST 10yr -6bps to 4.58, 10-yr JGBs +1bps to be back to above 0.90% again).

- China CNH also rose its highest level since March amid mainland China holiday.

- Apple stock rose strongly A/H, raising quarterly div to 4.2% and likely a global record-high stock buyback of $110B, a well as promising AI developments soon

- RBNZ goes against the trend for many Central Banks and their work on potential CBDCs (central bank digital currencies) by inviting rural towns in New Zealand to apply for cash service trials, saying that it is committed to New Zealanders continuing to access bank cash.

- Thai April CPI turns positive for the first time in 7 months.

- Some Central Banks in Asia may be looking a little more hawkish, with Taiwan’s Central Bank saying it may need to raise rates again and Thailand April CPI coming in a lot hotter than expected. Thai Commerce Ministry said that May inflation is expected to further accelerate on power and food prices, perhaps justifying the BOT having refused to cut rates this year despite significant political pressure from the Prime Minister.

- US equity FUTs +0.4 to +0.6% in Asian trading today.

Looking ahead (Asian time zone)

- Fri May 3rd (Fri night US Apr NFP, Apr ISM Services).

Holidays in Asia this week

- Fri May 3rd China, Japan.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.1% at 7,595.

- Australia Apr Final PMI Services: 53.6 v 54.2 prelim (confirms 3rd month of expansion).

- Australia Mar Home Loans Value M/M: 3.1% v 1.0%e.

- Macqaurie Group: Reports FY24 (A$) Cash Net 3.52B v 3.65Be, Rev 16.9B v 17.0Be (stock +6%).

- Reserve Bank of New Zealand (RBNZ) invites rural towns in New Zealand to apply for cash service trials - statement.

China/Hong Kong

- Hang Seng opens +1.8% at 18,543; Shanghai Composite closed for holidays (reopens Monday, May 6th).

- China NDRC: Reiterates no overcapacity issue related to new energy industry.

- USD/CNY: CNH rises to the highest level since Mar amid Mainland China holiday, tracks the rise in the Yen.

- (HK) Offshore Yuan (CNH) overnight HIBOR falls 155bps to lowest since Dec 2022 – financial press.

- Certain property developers in Shanghai to allow buyer refunds if buyers fail to sell old homes – US financial press.

- Hong Kong Q1 Advance GDP Q/Q: 2.3% v 0.9%e; Y/Y: 2.7% v 0.8%e [overnight update].

Japan

- Nikkei 225 closed for holiday.

- Bank of Japan (BoJ) accounts data suggests ¥3.26-3.66T (~$22B v ~$37B on Monday) of FX intervention on Wed/Thurs, May 1st/2nd – press [overnight update].

- Japan Top FX Diplomat Kanda: Cannot overlook excessive FX moves having a major impact on domestic economy [overnight update].

South Korea

- Kospi opens +0.8% at 2,704.

- South Korea Central Bank (BOK) Gov Rhee: Closely watching FX volatility - press.

Other Asia

- Singapore Mar Retail Sales M/M: -1.0% v 3.0% prior; Y/Y: 2.7% v 2.8%e.

- Thailand Apr CPI M/M: 0.9% v 0.4%e; Y/Y: +0.2% v -0.3%e;

- Taiwan Central Bank (CBC) Apr Minutes: May have to raise rates again if prices do not fall [overnight update].

North America

- US Treasury Sec Yellen to deliver "major address" at Sedona Forum on May 3rd at 6pm ET.

- Apple reports A/H: Q2 $1.53 v $1.51e, Rev $90.8B v $90.0Be; Announces up to $110B share buyback (~4% of market cap); Raises Quarterly dividend 4.2%; Looking forward for new products announcement next week CEO: Guides Q3 Rev low-single digits growth v +1.3%e (implies Q3 Rev $82.6-84.3B v $82.3Be); Making significant investments in Generative AI; iPhone grew in Mainland China in Q2 - earnings call comments.

- Bank of Canada (BOC) Gov Macklem noted of increased confidence inflation would continue to come down gradually. Getting closer to be able to cut rates.

- (US) MAR TRADE BALANCE: -$69.4B V -$69.8BE.

- (US) Q1 PRELIMINARY NONFARM PRODUCTIVITY: 0.3% V 0.5%E (smallest increase since Q1 2023); UNIT LABOR COSTS: 4.7% V 4.0%E (biggest jump since Q1 2023).

- (US) INITIAL JOBLESS CLAIMS: 208K V 211KE; CONTINUING CLAIMS: 1.77M V 1.79ME.

- (US) MAR FACTORY ORDERS: 1.6% V 1.6%E.

- (US) MAR FINAL DURABLE GOODS ORDERS: 2.6% V 2.6%E; DURABLES (EX-TRANSPORTATION): 0.2% v 0.2%E.

- (US) WEEKLY EIA NATURAL GAS INVENTORIES: +59 BCF VS. +55 BCF TO +57 BCF INDICATED RANGE.

Europe

- (IE) Ireland Apr PMI Services: 53.3 v 56.6 prior (37th month of expansion).

- (EU) ECB's Stournaras (Greece, dove): Now see 3 rate cuts this year as more likely (down from his prior forecast of 4 cuts) - press interview.

- (EU) ECB’s Lane (Ireland, chief economist): There are two-side risks in proceeding through the next phase. We are not pre-committing to a particular rate path.

- ECB's De Cos (Spain) commented that inflation to fall to 2% target in 2025 after fluctuating for rest of 2024. Disinflationary process is advanced, but not yet complete.

- (ES) SPAIN APR MANUFACTURING PMI: 52.2 V 51.4E (3rd month of expansion, above all estimates and highest since June 2022).

- (IT) ITALY APR MANUFACTURING PMI: 47.3 V 50.4E (moves back into contraction, below all estimates and lowest since Dec 2023).

- (DE) GERMANY APR FINAL MANUFACTURING PMI: 42.5 V 42.2E (confirms 22nd month of contraction; lowest since Nov 2023).

- (FR) FRANCE APR FINAL MANUFACTURING PMI: 45.3 V 44.9E (confirms 15th consecutive contraction).

- (EU) EURO ZONE APR FINAL MANUFACTURING PMI: 45.7 V 45.6E (confirms 22nd month of contraction; lowest print since Dec 2023).

Levels as of 01:20 ET

- Nikkei 225 closed; ASX 200 +0.6%; Hang Seng +1.2%; Shanghai Composite closed; Kospi +0.1%.

- Equity S&P500 Futures +0.3%; Nasdaq100 +0.6%; Dax -0.2%; FTSE100 -0.1%.

- EUR 1.0724-1.0740; JPY 152.75-153.80; AUD 0.6562-0.6586; NZD 0.5954-0.5979.

- Gold +0.3% at $2,315/oz; Crude Oil +0.3% at $79.19/brl; Copper -0.1% at $4.4990/lb.