Mar 31 ,2024
Synopsis:
Asia equities poised to open firmer Monday in light activity over the Easter holidays. Futures in Japan and mainland China maintained mild gains. Hong Kong, Australia/NZ remain closed for Easter Monday. US contracts advanced following mostly higher closes in US markets in rangebound trading Thursday with narrative broadly positive after consolidating quarterly gains. Treasuries were mostly weaker. Dollar index was up 0.2%, with solid performance vs euro. Gold finished up 1.2%, setting a new record high. Bitcoin futures were up 3.9%. WTI crude settled up 2.2% and notched its third straight monthly gain.
US core PCE inflation was largely benign while Fed Chair Powell continued to promote patience with the timing of rate cuts, generally consistent with earlier remarks from Waller. Markets still anticipate easing to begin mid-year. Timing set to remain the key theme for Q2, as markets debate the sustainability of momentum following solid performance in Q1. S&P 500 logged biggest gains since 2019 with encouragement from contributions outside of Magnificent Seven. Attention turns to next round of labor market data this week, climaxing with Friday's payrolls (early consensus points to 200K+ with unemployment rate edging lower), as well as Fed speeches and ISM manufacturing index.
In Asia, China official manufacturing March PMI beat expectations and marked the first expansion in six months, underpinned by growth in production, new orders and exports. Headlines prompted positive takeaways, adding to strength in earlier activity and export data, though did not move the needle in terms of the skepticism toward achievement of the government growth target without stronger stimulus amid ongoing overhang from property market weakness. Latest CREIC data showed new home sales remained in deep contraction in March though easing from the prior month.
Macro calendar begins with BOJ Tankan survey, expected to show lower manufacturing optimism contrasting with further improvement among nonmanufacturers. FY23 capex plans seen revised lower, though in line with usual seasonal dynamics. Follows unexpected decline in February industrial production and softer Tokyo core inflation, dampening speculation on how soon BOJ will follow up with another rate hike. Yen dynamics remain in the spotlight, though there was no meaningful follow-through on last week's FX intervention discussions. Japan Finance Minister Suzuki told parliament Friday that he suspects speculative moves sustaining yen weakness despite narrowing interest rate gap.
Pre-open Company News:
China Ministry of Agriculture: weekly wholesale livestock and poultry prices (22-Mar to 28-Mar)
IMG.CN -- IAMGOLD completes first gold pour at the Côté Gold Mine
4503.JP -- FDA accepts Astellas's sNDA for IZERVAY to treat GA secondary to AMD
K71U.SP -- Keppel REIT T to acquire 50% interest in Sydney freehold Grade A office building for A$363.8M (~SG$321M)
Estimated weekend box office revenues in US, Canada $136.0M, +38.9% y/y - Box Office Mojo
Indian Oil Corp, Panasonic Energy sign binding term sheet to form JV; terms undisclosed
4523.JP -- Eisai submits sBLA for LEQEMBI (lecanemab-irmb) for IV maintenance dosing for treatment of early Alzheimer's disease to FDA
On Deck:
Japan:
Economic:
08:50 JST: Tankan Large Non-Manufacturing Index NSA; consensus
08:50 JST: Tankan Large Manufacturing Index NSA; consensus
Earnings:
SHIMAMURA (8227.JP), Nextage Co. (3186.JP)
South Korea:
Economic:
11:00 KST: Trade Balance NSA; consensus +$4.2B
11:00 KST: Import NSA Y/Y; consensus
11:00 KST: Export NSA Y/Y; consensus +6.2%
Indonesia:
Economic:
11:00 SAST: CPI NSA Y/Y; consensus +3%
Market Data:
Gold (Jun 24): +$22.40 or +1.00% to $2260.80
WTI Crude (May 24): ($0.08) or (0.10%) to $83.09
$-¥: +0.02 or +0.01% to 151.3910
$-KRW: (5.12) or (0.38%) to 1345.3000
A$-$: +0.00 or +0.23% to 0.6532
$-INR: (0.01) or (0.01%) to 83.3831
$-CNY: (0.01) or (0.10%) to 7.2203
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