Directionless trade as Asia digests earlier US trade developments – KR GDP contracts

General trend

- Listless trading in Asia without fresh developments as markets pondered the veracity of earlier US press reports of a potentially relaxed tariff regime on China (later denied by the White House). Hang Seng gave back half (-1.2%) of its outperforming gains yesterday to underperform in Asia today. ASX outperformed +0.7%.

- Gold's reversal from its record $3,500/oz high on Tuesday was arrested at the $3,280 level, currently trading above $3,300 handle.

- Thailand confirmed it will tighten Certificate of Origin of goods, a major sticking point for the US regarding Chinese trans shipments through SE Asian nations.

- South Korea Q1 GDP contracted for 1st time since Q4 2020.

- SK Hynix significantly beat even the beefed up estimates in its Q1 earnings release with Net profit +158% on hot chip demand for AI. Stock -1.3%.

- US equity FUTs -0.1% to -0.2% during Asian trading.

Looking ahead (Asian-weighted news, using Asian time zone)

- Thu 24th (Thu eve DE Apr Ifo Business Climate, Thu night US Mar Durable Goods, US Mar Home Sales).

- Fri 25th JP Apr Tokyo CPI, (Fri eve UK Retail Sales).

Holidays in Asia this week

- Mon 21st Australia, Hong Kong, New Zealand.

- Fri 25th Australia, New Zealand.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.2% at 7,932.

- New Zealand Apr ANZ Consumer Confidence: 98.3 v 93.2 prior.

- RBNZ survey shows first rise in home-loan demand since 2021.

China/Hong Kong

- Hang Seng opens -0.2% at 22,030; Shanghai Composite opens flat at 3,295.

- China PBOC Gov Pan Gongsheng: No winners in trade war; China supports free trade - comments from Washington DC.

- Follow Up: Trump said US could make special trade deal with China - US financial press.

- *(US) US Pres Trump: Lowering China's tariffs will depend on them; Tariff rate for China could come in the next 2-3 weeks; There's going to be fair deals, not rip-off deals.

- *(CN) US PRES TRUMP SAID TO INCLUDE AUTO PARTS FROM CHINA IN some TARIFF EXEMPTIONS – FT.

- (CA) China Ambassador to Canada Wang Di said may 'adjust' countermeasures based on the policy of Canada - Press.

- (US) White House Press Sec Leavitt: Confirms there will be no unilateral reduction on China tariffs; Its not fair to say Pres Trump is softening on trade; The China tariffs are leverage.

- (US) Treasury Sec Bessent: Confirms earlier report that there is no unilateral offer from Trump to cut China tariffs; A full China trade deal may take 2-3 years.

- Trump Administration not planning imminent, unilateral tariff changes regarding China; Not seeing evidence that US engaging in negotiations with China - CNBC's Javers.

- White House reportedly considers slashing China tariffs; One Official said that tariffs could go down to 50-65% from 145%; In China's policymaking circles, Trump's comments Tuesday were viewed as a sign of him folding - WSJ.

- Reportedly talks continue between the U.S. and China on tackling the fentanyl epidemic amid the trade war between countries, but China's proposals to help resolve the crisis thus far are inadequate; In recent weeks, the Trump administration has engaged in direct talks with Chinese counterparts – press.

- China NDRC cuts items on 'Negative List' to 106 (from 117 prior)- China state media.

- China Foreign Ministry: Door for talks with US is "wide open"; US can't say it wants to reach an agreement with China, and on the other hand, keep exerting extreme pressure.

- Kaifeng Development [local government financial vehicle] said to cancel 3-year ‘sustainable’ USD-denominated bond sale – financial press.

- China Foreign Min Wang Yi: Supports Iran's nuclear talks with US, China wants to increase cooperation with Iran.

- China MOF sells 5-year, 20-year and 30-year Special Sovereign bonds.

- China PBOC Dep Gov Lu Lei: China's action plan will reduce trade costs.

- Hong Kong Mar CPI Composite Y/Y: 1.4% v 1.5%e.

- Macau Tourism Office: Mar Visitor Arrivals: 3.069M v 3.147M prior.

- China PBOC sets Yuan reference rate: 7.2098 v 7.2116 prior.

- China PBOC Open Market Operation (OMO): Injects CNY218B in 7-day reverse repos; Net drains CNY28B v injects CNY3.5B prior.

Japan

- Nikkei opens +0.9% at 35,194.

- Japan Mar PPI Services Y/Y: 3.1% v 3.0%e.

- Japan releases weekly flows data [period ended Apr 18th]: Foreign buying of Japan equities: ¥705.6B v ¥1.04T prior; Japan buying of foreign bonds: +¥223.7B v -¥511.9B prior.

- Follow up: Japan's EV charging standards also said to be included in US trade talks - Nikkei Asia.

- Follow up: Japan, US expected to continue tariff negotiations on May 1st – NHK.

- Japan Fin Min Kato: Reiterates US tariffs are "regrettable", comments at G7, G20- financial press

- US Treasury Sec Bessent won't seek currency target talks with Japan – Nikkei.

- Japan Chief Cabinet Sec Hayashi: US and Japan Finance Minister talks are still being arranged; affirms to engage in 'close' discussions on FX rates.

- *(JP) Japan sells ¥2.6T vs ¥2.6T indicated in 2-Year Bonds; Avg Yield: 0.6910% v 0.8630% prior; bid-to-cover: 3.58x v 3.41x prior.

Korea

- Kospi opens flat at 2,525

- SOUTH KOREA Q1 ADVANCE GDP Q/Q: -0.2% V +0.1%E; Y/Y: -0.1% V 0.0%E [contracts for first time since Q4, 2020].

- South Korea Apr Business Manufacturing Survey: 93.1 v 91.9 prior.

- Hynix (000660.KR) Reports Q1 (KRW) Net 8.11T v 5.02Te, Op 7.44T v 6.59Te, Rev 17.64T v 17.4Te; Macro uncertainty has caused volatility on H2 demand.

- South Korea Acting President Han: US tariffs to 'significantly' affect Korean companies - financial press.

Other Asia

- Thailand confirms will tighten Certificate of Origin of goods before US trade talks - financial press.

- Taiwan said to earmark NT$410B in special aid for economy and industry - financial press.

- INDONESIA CENTRAL BANK (BI) LEAVES BI-RATE UNCHANGED AT 5.75%; AS EXPECTED [overnight update].

- Indonesia Central Bank (BI) Gov Warjiyo: Need policy response to address worsening global conditions - pre-rate decision press conference [overnight update].

- Thailand govt said to be considering THB500B economic stimulus plan to help counter the impact from US tariffs - financial press [overnight update].

- Taiwan Mar Industrial Production Y/Y: 13.7% v 15.2%e [overnight update].

North America

- (US) House GOP reported to target extra $150B spending for Pentagon - Politico.

- (US) Fed's Hammack (non-voter for 2025): Larger than necessary balance sheet carries costs; Notes that the balance sheet run-off could have continued; Supports balance sheet change as a necessary step; Would like to explore Centrally Clearing SRF.

- *(CA) US Pres Trump: Canada's auto tariffs could go up; Doesn't want cars from Canada; Reiterates desire to build cars in the US; Currently working on a deal with Canada.

- (US) Pres Trump: Reiterates that China and EU are ripping off the US; We're going to make a lot of money for our people; We're going to have a fair deal with China - comments to media.

- (US) Fed's Goolsbee (voter): Gains in productivity growth appear to be a technology-driven boom - conference comments.

- (CN) White House reportedly considers slashing China tariffs; One Official said that tariffs could go down to 50-65% from 145%; In China's policymaking circles, Trump's comments Tuesday were viewed as a sign of him folding - WSJ.

- (US) APR S&P PRELIMINARY MANUFACTURING PMI: 50.7 V 49.0E (4th month of expansion); Expectations fall to one of lowest readings since pandemic; Prices rose at sharpest rate in last year.

- (CN) Trump Administration not planning imminent, unilateral tariff changes regarding China; Not seeing evidence that US engaging in negotiations with China - CNBC's Javers.

- FLEXPORT'S FOUNDER: IN THE 3 WEEKS SINCE THE TARIFFS TOOK EFFECT, OCEAN CONTAINER BOOKINGS FROM CHINA TO THE UNITED STATES ARE DOWN OVER 60% INDUSTRY WIDE.

- (US) MAR NEW HOME SALES: 724K V 684KE.

- (US) Treasury Sec Bessent: Trump admin wants to work with IMF and World Bank; Calls for reforms following 'mission creep' at both institutions.

- (US) TREASURY $70B 5-YEAR NOTE AUCTION DRAWS 3.995% V 4.100% PRIOR, BTC 2.41 V 2.33 PRIOR AND 2.39 OVER THE LAST 12.

-(US) FED BEIGE BOOK: ECONOMIC ACTIVITY WAS LITTLE CHANGED SINCE THE PREVIOUS REPORT, BUT UNCERTAINTY AROUND INTERNATIONAL TRADE POLICY WAS PERVASIVE ACROSS REPORTS; THE OUTLOOK IN SEVERAL DISTRICTS WORSENED CONSIDERABLY AS ECONOMIC UNCERTAINTY, PARTICULARLY SURROUNDING TARIFFS, ROSE.

- (US) VP Vance: Making progress across the board in trade talks - comments from India [overnight update].

Europe

- US Sec State Rubio: Politico story on Russian sanctions 'unequivocally false'; Have not spoken with special envoy Witkoff on lifting Russian sanctions - X Post.

- (EU) ECB's Nagel (Germany): Global economy is in a very delicate situation; Euro area 2025 picture looks stagflationary.

- (RU) Russia Central Bank (CBR) Gov Nabiullina said to be set to serve out term until 2027 - press.

- (US) DOE CRUDE: +0.2M V +0.5ME; GASOLINE: -4.5M V -1.5ME; DISTILLATE: -2.4M V 0ME.

- KER.FR 1 Rev €3.88B v €4.1Be; Notes a difficult start to the year due to macroeconomic headwinds; Have not see any real trend changes in early Q2; Still expect H2 to be better than H1.
- (EU) ECB Chief Lagarde: Reiterates seeing tariffs impacting PMI and hiring numbers; Levies are probably more disinflationary than.

- (UK) Chancellor (Fin Min) Reeves: Deal with US can be done, including tech partnership; UK not going to rush into trade deal with US - comments to media.

- (CN) European Parliament said to be in late stages of discussions with China to remove sanctions - SCMP.

Levels as of 01:20 ET

- Nikkei 225 +0.4%, ASX 200 +0.7%, Hang Seng -1.2%; Shanghai Composite +0.1%; Kospi -0.3%.

- Equity S&P500 Futures -0.1%; Nasdaq100 -0.2%; DAX flat; FTSE100 -0.2%.

- EUR 113.15-1.113.58; JPY 142.60-143.46; AUD 0.6352-0.6372; NZD 0.5943-0.5963.

- Gold +1.3% at $3,336/oz; Crude Oil +0.2% $62.37/bbl; Copper +1.2% at $4.8353/lb.