May 12 ASIAN MACRO INITIAL THOUGHTS Futures indicate a higher open


12 May

Asia
Australia 
Futures indicate market to open lower -39pts with caution ahead of the housing data.  Age care in focus after the Federal Government unveiled its “recovery budget” but consumer also +VE on another tax offset.  Oil rose +VE Santos and Woodside along with Gold miners (Evolution and New Crest) Data due New Home Sales Apr (Mar was 90.3% MoM  (F/cast was 30%)Building Permits Apr (Mar was 20.1% MoM (F/cast was 17.4%)
Japan 
Nikkei futures opened +18pts and have been rising currrently +55pts expect initial bargain hunting but then more cautious trading ahead of US inflation data.
S Korea 
Expect markets to open higher with initial bargain hunting after Tuesday’s selling. Good unemployment data +VE but upside limited ahead of today’s inflation data from the US.
Taiwan 
Market to open higher with bargain hunting after yesterday’s heavy sell off (-3.8% the third worst day ever) but upside limited by inflation data due today from US, Germany and France.
China 
Market to open lower following yesterday’s moves where the market closed higher. No data schedules but new loans data could be released at anytime. The ‘wild card’ remains the action of ’Team China’ to support the market.
HK 
ADR’s indicate +143pts @ 28,156 with only SInopec, CCB and CK Hutch’s ADR’s closing in the red; so expect a choppy start with margin call selling and short covering competing
US Futures 
Opened Dow -30pts S&P -0.12% and NDX-0.14%. Expect caution ahead of the US inflation data, of course if it is less than expected there could be a strong bounce.

Shippers remain buoyant as demand for raw materials and finished products  continues to rise.

DOW -136%, NDX -0.09%, S&P -0.87%, Russel 2K -0.26% 
Dow opened lower and sold down as much as 600 pts but then worked slightly better. S&P opened lower and then oscillated around the opening level and closed off the early lows.  NDX opened lower but worked better and from around 1pm traded around flatInitial moves were rotation out of tech and into reflation names (cyclicals)and assets that benefit from inflation. But that reversed through the day (possible short covering) with Amazon, Netflixs and others seeing interest as the day progressed.
Tesla -1.9% but off the early -4% on news it had halted plans for it Shanghai plant as its export hub
Banks JPMorgan Chase -1.7%, Citigroup -0.4% Wells Fargo -1.9%, Amex -2.7%
Work from home names: Facebook +0.2%, Apple -0.7%, Amazon +1.1%, Netflix +1.7%,  Disney -1.4%, Zoom Video +4.1%, Alphabet -1% and Microsoft -0.4%,
Tech 
NXP Semi +1.9%, Nvidia +0.3%, Micron -0.2%, AMD +1.1%, Skyworks +0.6%
Re-opening stocks 
Boeing -1.8%, Caterpillar -1.4%, Simon Property -3.2%, Kohl’s -3.1%, Nordstrom -3.4%, Gap -1%, United Airlines -2.5%, Carnival -1.5%, Wynn Resorts -0.6%, Chevron -2.6%, Exxon Mobil -3.2%,  
Lock down names 
Campbell Soup -0.2% General Mills -1.1%, JM Smucker -1.2%
DATA
NFIB Business Optimism Apr 99.8 vs 98.2 Mar (F/cast was 98.7)
Redbook +13.3% YoY vs 14.2% prior
JOLT’s Job Openings Mar 8.123m vs 7.526m Feb (F/cast was 7.4m).
Help wanted jumped from February by 597,000, or 8%, to 8.12 million, hires rose just 215,000, or 3.7%, to just over 6 million; shows employers struggling to fill positions. Key reasons parents can’t work due to closed schools/daycare, health concerns, younger workers moving into new fields, lack of required skills, enhanced federal benefits.
42 day Bill Action 0.005% vs 0.01% prior
3 year Note Action +0.329% vs 0.376% prior
After market
API Crude Oil Stock Change -2.533m vs -7.7m (Consensus was -2.25m)
USD was weak vs Yen & Euro. Bitcoin +0.5% @ 56,541.02, VIX +11% @ 21.84,
US T10 @ 1.622 % on inflation concerns
.OIL Brent +0.54%, WTI +0.82% concerns about shortages after the Colonial Pipeline hack.
Gold +0.04% off earlier lows, Silver +0.9%, Copper +1.7% Platinum -0.04%, Palladium +0.6% after choppy trading .
AHEAD MBA Mortgage Applications and 30 yr Mortgage Rate, inflation Rate, Core Inflation Rate, EIA Oil Report, Monthly Budget Statement

Earnings: Toyota, Wendy’s, Fossil, Bumble, Allianz, Jack in the Box, Vroom, SoftBank, Sonos, Bayer, 1Life Healthcare

DAX -1.82%, CAC -1.86%, FTSE -2.47% 
Markets opened lower and sold down for the first hour before seeing support, they then drifted lower before seeing a bounce around 3pm but then sold down again with a small uptrend into the close. All sectors weak with Travel & Leisure leading the declines; the sector was -5.7%
German wholesale prices came in higher than expected adding the inflation concerns and the ZEW data was slightly better than expected but largely ignored with inflation being the focus.
Queen Elizabeth presented Prime Minister Boris Johnson's post-pandemic agenda which aims to bolster the economy after the COVID-19 pandemic, defuse tensions that threaten the country’s unity and combat social issues ranging from housing to care for older adults.
Earnings out before the open from Ubisoft -2% and Thyssenkrupp -10%
Hugo Boss holds its AGM Tuesday.
THG +12% after it announced a substantial equity investment led by Japanese giant Softbank.
Evolution Gaming -13.8% after announcing the pricing of block trades.
DATA
EUROZONE 
ZEW Economic Sentiment Index May 84 vs 66.3 Apr (F/cast was 65)
GERMAN 
Wholesale Prices Apr +1.1% YoY vs +1.7% Mar (F/cast was +0.8%)
Wholesale Prices Apr +7.2% MoM vs +4.4% Mar (F/cast was +6.8%)
ZEW Economic Sentiment Index May 84.4 vs 70.7 Apr (F/cast was 69)
ZEW Current Conditions May -40.1 vs -48.8 Apr (F/cast was -42)
AHEAD
EUROZONE Industrial Production
GERMANY Inflation Rate
FRANCE Inflation Rate IEA Oil Report
UK Balance of Trade, GDP Growth Rate, GDP, Business Investment, Industrial Production, Manufacturing Production, Construction Output & Orders, Goods Trade Balance, NIESR Monthly GDP Tracker.

JAPAN 
Nikkei futures opened  +18pts and have been rising currrently +55pts expect initial bargain hunting but then more cautious trading ahead of US inflation data.
Yen currently 108.6
Data due 
Foreign Exchange Reserves Apr (Mar was $1368.5b)
Later Coincident Index Mar (Feb was 89.9 (F/cast was 90.4))
Leading Economic Index Mar (Feb was 98.7 (F/cast was 98.2)
Tokyo reported 925 new covid cases Tuesday (vs 352 Monday)  Osaka 974, nationwide the total was 6,160.  -VE for sentiment
A growing number of Japanese people are dying of COVID-19 at home as more infectious variants of the coronavirus fuel a fourth wave of infections and hospital resources are stretched to the verge of collapse. Public anger with the government over its handling of the crisis is growing as are doubts about the viability of holding the Olympic Games in just over 10 weeks, as a vaccination campaign struggles to build up steam.
Toshiba Corp’s board is set to appoint UBS as financial adviser to work on a strategic review for the Japanese conglomerate as it faces a possible private equity bidding war, people familiar with the matter said.
Takeda Pharmaceutical Co (4502.T) on Tuesday said it may double imports of Moderna Inc's (MRNA.O) COVID-19 vaccine to help Japan speed up COVID-19 inoculation efforts that have trailed most wealthy countries. Japan's biggest drugmaker is handling the imports, and discussions are underway with the government to double shipments to 100 million, Takeda CEO Christophe Weber said.
Nissan said Tuesday it had trimmed its annual net loss but warned its outlook remained clouded by the global chip shortage that has hit the auto industry.  Itnarrowed its net loss to ¥448.7 billion ($4.1 billion) for the fiscal year to March, from a loss of ¥671.2 billion a year earlier, beating its own forecast.  “We are facing big business risks such as the semiconductor supply shortage and a surge in raw material costs,” CEO Makoto Uchida told reporters.
SOUTH KOREA 
Expect markets to open higher with initial bargain hunting after Tuesday’s selling.  Good unemployment data +VE but upside limited ahead of today’s inflation data from the US.
Data out Unemployment Rate Apr 3.7% vs +3.9% Mar (F/cast was +3.9%)
KDCA reported 511 new covid cases Tuesday (vs 463 Monday)
Industry ministry said Tuesday it is examining its cybersecurity readiness of its energy-related infrastructure, as the United States grapples with a major ransomware attack that has disrupted its pipeline system.
Government urged to take swift action as small businesses reel from COVID-19 Revenue plunged for self-employed businesses last year amid pandemic
Kakao Entertainment Corp said on Tuesday it was acquiring U.S.-based online comic app Tapas and serialized fiction app Radish for $510 million and $440 million, respectively.  The purchase will make Kakao, the online comic, talent agency and movie-making unit of South Korean tech giant Kakao Corp, the latest South Korean entertainment firm to expand in North America as Korean entertainment’s global reach widens. +VE
Samsung Electronics Co. on Tuesday introduced its expanded lineup of customizable home appliances to global audiences as the South Korean tech giant aims to boost sales amid the pandemic-driven stay-at-home trend.  +VE
Samsung Electronics on Tuesday unveiled the industry’s first DRAM module which supports the new Compute Express Link (CXL) interconnect standard, a new technology that can enhance the performance of data centers or cloud servers.  +VE
LG Uplus Corp., a major South Korean telecom operator, said Tuesday it will invest 318.1 billion won ($267.9 million) to build a new internet data center amid growing user demand. The move comes after LG Uplus CEO Hwang Hyeon-sik vowed earlier this year to focus on new businesses aimed at corporate customers.  +VE
SK Inc. said Tuesday it has invested an additional 40 billion won ($35.7 million) into a next-generation lithium-metal battery developer Solid Energy Systems after making an initial investment of 30 billion won in 2018.  According to the holding firm of SK Group, the investment will allow the company to become the third-largest shareholder of SES after Singapore’s sovereign wealth fund Temasek and SES founder and CEO Qichao Hu.  +VE
KT Corp.said Tuesday its first-quarter net profit rose 43.7 percent from a year earlier on the back of growth in 5G users and new tech businesses.  KT said growth in its corporate-focused new digital services, which include data center and artificial intelligence platform businesses, also boosted its bottom line.  Major subsidiary BC Card partially recovered from last year's pandemic-induced slump, recording 839.5 billion won in sales in the first quarter, up 5 percent from the previous year.  +VE
Hanwha Solutions said Tuesday that its net profit in the first quarter surged 500 percent on-year to 385.2 billion won ($344.1 million), a record quarterly figure.Revenue increased 6.9 percent to 2.4 trillion won and operating profit spiked 52.4 percent to 254.6 billion won in the same period.  “The record performance was propelled by a booming petrochemical business and the liquidation of some Galleria department store buildings,” a company official said.  +VE
South Korean shipbuilders lost their No. 1 ranking to Chinese rivals in terms of new orders in April, nine months after taking the top spot since July, industry data showed Tuesday. Led by Hyundai Heavy Industries Co. obtained new orders of 34 ships, or 1.19 million compensated gross tons (CGTs), falling behind their Chinese rivals with 53 ships, or 1.64 million CGTs, according to the data provided by global market researcher Clarkson Research Service.  Slight -VE
A nonfungible token of the historic match between between South Korean Go master Lee Se-dol and Google’s artificial intelligence Go player AlphaGo has been auctioned off as a digital content on OpenSea, the world’s largest marketplace for NFTs, officials said Monday.

TAIWAN 
Expect market to open higher with bargain hunting after yesterday’s heavy sell off (-3.8% the third worst day ever) but upside limited by inflation data due today from US, Germany and France.
No data due 
Govt reported 7 cases with the source of 6 under investigation as they hand history of international travel.  In response, health authorities said they will ban indoor gatherings of more than 100 people and ban outdoor gatherings of more than 500 people and increase other social distancing measures. Slight -VE
Taiwan’s foreign minister criticised what he called China’s “shameless lies” on Tuesday in an escalating dispute about Beijing blocking the island from the World Health Organization (WHO), saying China clearly did not care about Taiwan’s people.Wu said China’s Communist Party could not claim to speak for Taiwan as it has never ruled it and only the island’s democratically elected government can represent its people.
The stricter anti-COVID-19 measures that the Central Epidemic Command Center (CECC) has imposed on China Airlines Ltd (CAL) are predicted to reduce the airline’s cargo capacity by about 10 percent, the company said yesterday, rejecting market speculation of a 50 to 80% +VE
The national treasury last month collected NT$132.7 billion (US$4.75 billion) in tax revenue, an increase of 11.4 percent from a year earlier, bolstered mainly by sharp increases in securities and property transactions, the Ministry of Finance said yesterday.
ChipMOS Technologies Inc a display driver IC and memorychip tester and packager, yesterday forecast significant revenue growth for this year as it plans to raise its prices again to reflect the higher cost of copper and other raw materials following strong semiconductor demand.  It has raised its prices an average of 5 to 8 percent since the fourth quarter of last year, it said, adding that the increases were also due to a lack of testing and packaging capacity. +VE
Innolux Corp yesterday announced that net profit last quarter totaled the highest in 15 quarters and that the strong momentum should carry into this quarter, sparking a sequential increase of 15 percent in the price of TV and laptop panels.  It said that global demand for panels this quarter continues to outpace supply — as the COVID-19 pandemic has triggered a massive use of contactless technology and displays for Internet-connected electronics — which would support a continuing upward trend in panel prices this quarter, Innolux said in a statement. People are also upgrading their electronic devices for distance learning, which has deepened an already tight panel supply, the company said. +VE
In the third phase of Taiwan’s offshore wind farm development plan, capacity is to be increased by 5 gigawatts (GW) from 2026 to 2035 to a total of 15GW, the Bureau of Energy (BOE) announced yesterday.  “It is up to the developers to compete for the best locations,” bureau Director Yu Chen-wei said as he presented draft regulations in Taipei. “We leave it up to them to decide what technologies to deploy,” Yu added. +VE
Sinyi Realty Inc yesterday posted NT$460 million (US$16.46 million) in net income for the first quarter, more than 10 times the amount reported a year earlier when the COVID-19 outbreak had slowed transactions.  The Taipei-based company expects its brokerage and agency arms to gain further momentum this quarter, but uncertainty about the second half of this year is worsening.  Slight +VE
Sunjuice Holdings Co Ltd  yesterday said that its net profit and revenue in the first quarter was the highest for the January-to-March period in the firm’s history, aided by rising consumption in China and an improved product mix. Net profit rose 1,621.66 percent year-on-year to NT$198.25 million, with earnings per share of NT$5.88, while revenue grew 171.54 percent to NT$993.99 million, Sunjuice said in a statement. For the second quarter, the firm said that it expects demand to steadily grow as the beverage market enters its peak season and China’s beverage vendors continue to expand stores. +VE

CHINA 
Expect market to open lower following yesterday’s moves where the market closed higher.   No data scheduled but new loans data could be released at anytime. The ‘wild card’ remains the action of ’Team China’ to support the market.
No data due
Honduran President Hernandez said on Tuesday that his nation, a long-standing diplomatic ally of Taiwan, could open a commercial office in China in a bid to acquire. coronavirus vaccines.  Honduras does not have formal relations with China and is one of a group of Latin American nations with strong diplomatic ties to Taiwan, which Beijing considers part of its territory.
Public reaction to the census shows concerns about finances and healthcare of elderly parents.  But it also points to more economic risks ahead for the country.  But Beijing seems to be hoping to improve productivity to meet the crisis.
China comes under criticism for the rocket re-entering the Earth’s atmosphere on Sunday.  US space agency Nasa said China had failed to “meet responsible standards”, before China hit back, saying the operation was conducted within international law.  Space operation experts said that the criticism of China was based on established space practice, but the descent of the Long March 5B highlighted differences between Chinese and US views, magnified on this occasion by the giant size of the launcher rocket and China’s failure to plan a “targeted re-entry” of its debris. Slight -VE
China looks to Turkmenistan for more gas as it cuts Australian supplies.  Chinese foreign minister says his country wants to expand cooperation on the resource with the Central Asia state;  Turkmenistan is already China’s biggest supplier of the resource. -VE for Australia.
PLA releases videos showing marines in island landing drills ‘targeting Taiwan’ Navy says recent exercises involving amphibious landing docks aimed to improve rapid response in enemy territory.  Analyst says combat training is preparation for a possible conflict over Taiwan and more such drills are expected. -VE for International sentiment.
KPMG China Tuesday unveiled the China Economic Monitor for the second quarter of 2021, which indicated the good start of domestic economy in the first quarter. The country maintained her solid revival trends as well.  KPMG China's Chief Economist Kang Yong expected China's economic recovery to last into the second quarter as inoculation moved ahead and the pandemic came under control, with stronger economic growth contribution from consumption. Slight +VE

HONG KONG 
ADR’s +143pts @ 28,156 with only SInopec, CCB and CK Hutch’s ADR’s closing in the red; so expect a choppy start with margin call selling and short covering competing 
No Data due 
Short Selling Tuesday 13.9% vs 12.5%  Monday 
Top Shorts  CK Assets (1113) 54%, Country Garden (2007) 40%, Wharf REIC (1997) 39%, HSBC (5) 39%, Hang Seng Bank (11) 38%, NWD (17) 35%, SinoBioPharm (1177) 33%, CLP (2) 33%, Henderson Land (12) 33%, AIA (1299) 34%, Ali Health (241) 32%, Bank Of China (3988) 30%, Hengan (1044) 30%, BoC HK (2388) 29%, MTRC (66) 28%,Shenzhou Int (2313) 28%, Citic (267) 28%, Galaxy Ent (27) 28%, China Res Land (1109) 27%, Xiaomi (1810) 25%, CKH (1) 25%Most shorting would have been done after the initial sell off.
BUYBACK 
WANT WANT CHINA (00151.HK) announced that it repurchased 1.983 million shares on market Tuesday (11 May), involving approximately $11.415 million.

SECURITY LAW
The number 2 officer in Hong Kong police national security unit, Frederic Choi, was caught in unlicensed massage parlour and has been ordered to take nearly a month of leave after officers found him at the establishment during a raid. -VE for the unit

WATCH
At SUCCESSUNIVERSE (00487.HK)'s news conference, Deputy Chairman Hoffman Ma said the worst days are behind for Macao casinos.  During the "May 1 Golden Week", the group's hotel rooms were 100% booked, disclosed Ma. +VE
The thermal coal futures price in China logged a new high. On Zhengzhou Commodity Exchange, the relevant price closed at RMB900.2/ ton, surpassing RMB900 for the first time. Year to date, the futures has amassed gains of 34%.
CHINA RES LAND (01109.HK) announced that for the month ended April, the Group achieved gross contracted sales of approximately RMB33.2 billion with contracted GFA of approximately 2.0624 million square meters, up by 75.7% and 85.1% YoY respectively.It also announced that the group had in April 2021 acquired six land parcels in Xi’an, Foshan, Changchun, Guangzhou and Shenyang with total gross floor area of approximately 1.326 million square meters. The attributable consideration payable amounted to approximately RMB15.8 billion.  +VE
SUNNY OPTICAL (02382.HK) announced the operating data for April 2021. As for optical components, the shipment volume of handset lens sets +11.3% YoY to 123 million units, which was due to the increased market share.  The shipment volume of vehicle lens sets +191.8% YoY to 6.123 million units, which was due to the increased market share, and the delay in shipment caused by the overseas pandemic in the same period of last year. +VE
CPIC (02601.HK) announced that the accumulated primary insurance premiums of China Pacific Life Insurance and China Pacific Property Insurance for the period between 1 January and 30 April 2021 respectively amounted to RMB107.325 billion and RMB55.741 billion, up 4.5% and 9.8% yearly.
There were 62 residential transactions involving Buyer's Stamp Duty (BSD) in April 2021, flattish monthly as announced by Inland Revenue Department's Stamp Office.   The taxation amounted to $186.4 million, down 30.5% monthly.
China Passenger Car Association announced that Tesla had sold 25,800 China-made electric vehicles, -27% MoM last month.  News earlier reported that Tesla was halting its Shanghai expansion plans -VE
Wharf (0004) chairman Stephen Ng Tin-hoi said mainland property sales contribution to the group will be reduced, but it will seek investment opportunities in Hong Kong instead. The returns from property sales in the mainland dropped amid the government's curbs on home prices, but the group, which has been focusing on high-end projects in Hong Kong, is optimistic about the local market, said Ng after the group's annual general meeting. "A unit worth 1 million [yuan] (HK$1.21 million) is priced at 900,000 [yuan] due to the government price limit, causing the flats to sell out very fast," said Ng. The developer also said that the reduction in the returns from property sales in the mainland lines up with the drop in land banks and goods supply, given the smaller scale of its mainland business and a different source of goods compared to its domestic peers. Slight -VE
Henderson Land Development (0012) raked in HK$1.7 billion through deals for 138 flats in the first round of sales at the robot-busy Henley I in Kai Tak. The developer has invested more than HK$70 million in innovative technologies and smart living systems at The Henley, including robots that provide services such as deliveries, including carrying heavy stuff. The delivery robots and luggage-toting robots are also programmed to take lifts and go to a resident's door. Robots also take on cleaning and sterilizing jobs, and they can check body temperatures.  Slight +VE
The Census and Statistics Department released the results of the Monthly Survey on Business Situation of Small and Medium-sized Enterprises (SMEs) for April.The current diffusion index (DI) on business receipts amongst SMEs went up from 44 in March in the contractionary zone to 47.1 in April, whereas the May outlook DI on business receipts was 48.9.
A government spokesman said that business sentiment among SMEs improved to a two-year high in April, though remained cautious in overall terms. If the global economic recovery sustains and the local epidemic situation remains well-contained, business sentiment can hopefully see further improvement down the road.
HENDERSON LAND (00012.HK) Tuesday uploaded sales brochures for "The Upper South”.  The southern Hong Kong Island residential project may be open for sales as soon as May, with a show flat available to the public soon.

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