China Q1 GDP Lower Than Expected, Markets Positive On Failed North Korea Rocket
Economic Data(CN) CHINA Q1 REAL GDP Q/Q: 1.8% V 1.9%E; Y/Y: 8.1% V 8.4%E (5th consecutive quarter of decline; Lowest since Q2 of 2009); GDP YTD Y/Y: 8.1% V 8.4%E
(CN) CHINA MAR INDUSTRIAL PRODUCTION Y/Y: 11.9% V 11.6%E; YTD Y/Y: 11.6% V 11.3%E
(KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 3.25%; AS EXPECTED
(CN) CHINA MAR RETAIL SALES Y/Y: 15.2% V 15.1%E; YTD Y/Y: 14.8% V 14.8%E
(SG) SINGAPORE PRELIMINARY Q1 GDP Q/Q: 9.9% V 6.8%E; Y/Y: 1.6% V 1.0%E
(CN) CHINA MAR FIXED ASSETS URBAN INVENTORY YTD Y/Y: 20.9% V 21.0%E (multi- year low)
(SG) SINGAPORE FEB RETAIL SALES M/M: -2.0% V 6.3%E; Y/Y: 19.0% V 15.0%E; RETAIL SALES EX-AUTO Y/Y: 7.7% V 3.1% PRIOR
(JP) Bank of Japan (BOJ) Mar 12-13 policy meeting minutes: Most members: Appropriate to steadily implement BoJ's previous easing decisions, monitoring effects
(PE) PERU CENTRAL BANK LEAVES REFERENCE RATE UNCHANGED AT 4.25%; AS EXPECTED
(CN) China reports Q1 property sales value CNY867.2B, -14.6% y/y
Markets Snapshot (as of 04:30GMT)
Nikkei225 +1.3%
S&P/ASX +0.8%
Kospi +0.8%
Taiwan Taiex +1.4%
Singapore Straits Times +0.7%
Shanghai Composite +0.2%
Hang Seng +1.6%
S&P Futures -0.3% at 1,381
June gold -0.4% at $1,674/oz
May Crude -0.5% at $103.11
Overview/Top Headlines
Asian markets were strong heading in to the weekend. Google reported after the close, the initial after hour strength was paired back on lower headcount numbers. In the conference call CFO said that the company does not manage headcount on a short term basis, which assuaged some concerns. North Korea launched its rocket; it managed to stay in the air about 1 minute before breaking up and falling into the ocean.
Markets were relieved to have the event over, the Kospi gained over 1% to a high of 2,011 while USD/KRW fell over 0.5% to KRW1,134. The Bank of Korea left rates unchanged as expected, comments were generally in line with previous rate decisions, policy to focus on price stability, sound growth and will strive to lower inflation expectations. The highly anticipated China Q1 GDP data was released; there were whisper rumors of 9.0% which added some risk appetite to the market. However, the actually y/y number was 8.1% v 8.4%. this was the 5th consecutive quarter of decline and the lowest level since Q2 2009.
China National Bureau of Statistics defended the number saying that Q1 GDP was still well within range and is still high compared to other countries. NBS did say China was having a difficult time stabilizing export growth and dealing with imported inflation. AUD/USD fell over 50 pips below $1.04 and continued to a low below $1.0385. Copper fell over 1% to $3.68 while silver fell 0.8% to $32.25. China March industrial production came in stronger than expected at 11.9% y/y, crude steel production for the month came in at a record high.
Taiwan released details of a new capital gains tax, the threat has kept the Taiex under pressure for many days. The tax will go into effect next year and for the most part leaves foreign investors little hit with the bulk of the tax impacting traders with large gains. In a step to combat inflation, Singapore Central Bank increased the slope of the trading band "slightly." CPI forecast was also revised to 3.5-4.5% and Core CPI to 2.5-3.0%.
Speakers/Geopolitical/In the press
(JP) Former MoF official Sakakibara (aka Mr. Yen): USD/JPY may reach high ¥70's levels.
(TW) Taiwan Central Bank Official: Overnight interbank rates increased by 0.29bps Friday v 0.03-0.05 bps hike for the last 4-days; implemented a larger short term rate hike due to rising inflation expectations.
Equities
INFO.IN: Reports Q4 Net INR23.2B v INR23Be; Consolidated Rev INR88.25B.
939.HK: Mainland banks CCB, ICBC, and BoC were the most actively traded shares on speculation they may soon be allowed to expand lending in Shenzhen. - SCMP
GNS.AU: Will sell Port of Portland export woodchip center; Proceeds to be used to pay down A$580M debt. - Australian Financial Review
BHP: Miners BHP and Rio Tinto expected to report sequential declines in March-quarter iron-ore output due to heavy rain and cyclones. - SCMP
ANZ.AU: Over the past 7 days ANZ's 5-yr swap rate increased from 139 bps to 149 bps; Commonwealth Bank's 5-yr swap rate increased 6bps to 145 in the same period. - The Australian
US Equities
GOOG: Reports Q1 $10.08 adj v $9.65e, R$8.14B (ex TAC) v $8.1Be; Proposes 2 for 1 stock dividend in the quarter, issuing new non-voting stock; +0.2% after hours.
CSTR: Reports Prelim Q1 $1.36-1.40 v $0.90e, R$567-569M v $538Me; Raises FY12 EPS $4.40-4.80 v $4.09e; Rev $2.16-2.28B v $2.2Be; +13.8% after hours.
JBHT: Reports Q1 $0.57 v $0.52e, R$1.17B v $1.2Be; -0.5% after hours.