BoJ dovish-hold amid quiet May day in Asia, focus on US Apr ISM Mfg PMI

General trend

- BOJ kept rates on hold but released a quarterly outlook that was decidedly dovish, with forecast cuts for both GDP and CPI this year and next. BOJ also released its first FY27/28 projections, forecasting both Core and Core-core CPI to be at or below target of 2.0%. 10-yr JGB yields -4.5bps to 1.265% with 2yr JGB yields -4.1bps at 0.633% and 5-yr JGBs -6bps to 0.82%, but 30-yrs +1.5bps.

- BOJ Gov Ueda to hold his post-decision presser at the Tokyo close (02:30ET / 06:30 GMT) with eyes firmly on whether his comments are also dovish, with USD making somewhat of a comeback against JPY in recent days, and speculators at record levels of long Yen…

- Nasdaq and S&P FUTs gained strongly after hours in the US with Microsoft +7.0% and META +5.4%, both beating earnings after the bell along with after-hours gains for most of the MAG7 (although Apple lost 1.7% after hours as a Federal judge ruled the company guilty of criminal contempt in its App Store battle with Epic Games. Apple demand also perhaps in question as component supplier Murata in Japan -18% (most since 2000) on anticipated soft demand for iPhones; Apple reports tonight in the US.

- Most markets in Asia closed today for May Day holidays, with only Japan, Australia and New Zealand open for regular trading. Nikkei outperformed on the dovish-BOJ, +1.2%.

- Spot Gold continued its fall to $3,225/oz, more than a two week low after its record-breaking surge to $3,500/oz.

- South Korea Apr Trade Balance was better than expected with exports higher than anticipated amid continued strong chip demand.

- Australia confirmed its PMI Manufacturing to be a 4th month of expansion, while Japan PMI Manufacturing confirmed its 10th month of contraction.

- Australia Mar trade surplus widened by more than double the expected figure, with export / import price indices also up significantly as the Aussie dollar fell in March.

- Tesla’s Board reportedly opened a search for a CEO to succeed Musk last month.

- Finnish elevator maker Kone, which relies on China for ~35% of its revenues, overnight said that it still expects demand for new building solutions in China to decline significantly this year.

- US equity FUTs +1.1% to +1.5% during Asian trading.

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

- Thu May 1st (Thu night US Apr ISM Mfg PMI).

- Fri May 2nd KR Apr CPI, KR Apr PMI, AU Q1 PPI, AU Mar Retail Sales, (Thu eve EU Apr CPI, US Non-Farm Payrolls).

Holidays in Asia this week

- Tue Apr 29th Japan.

- Wed Apr 30th Vietnam.

- Thu May 1st China, Hong Kong, India, Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand, Vietnam.

- Fri May 2nd China.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens -0.2% at 8,113.

- Australia Mar Trade Balance (A$): 6.9B v 3.2Be.

- Australia Q1 Import Price Index Q/Q: 3.3% v 0.2% prior; Export Price Index Q/Q: 2.1% v 3.6% prior.

- Australia Apr CoreLogic Home Value M/M: 0.2% v 0.4% prior (update).

- Australia Apr Final PMI Manufacturing: 51.7 v 51.7 prelim (confirms 4th month of expansion).

- New Zealand Apr CoreLogic Home Value M/M: 0.3% v 0.2% prior.

- Follow up: New Zealand-India Free Trade Agreement talks to begin on Monday - financial press.

- New Zealand sells total NZ$450M vs. NZ$450M indicated in 2030, 2034 and 2054 bonds.

- New Zealand Stats Agency: Will not update Q1 CPI to include vehicle fee; car relicensing fee was not included in the data.

China/Hong Kong

- Hang Seng closed for holiday; Shanghai Composite closed for holiday.

- (HK) Macau Apr (MOP) Casino Rev Y/Y: 18.9B +1.7% (v -1.3e).

- China Apr Vehicle Inventory Alert: 59.8 v 54.6 prior - US financial press.

- Reportedly US reached out to China recently for tariff talks - China press (media arm of CCCP).

- (US) Trump: Tariffs have not kicked in yet and China is already doing very poorly; Hope we will make a deal with China at a certain point, we are talking - Cabinet meeting.

- Nvidia CEO: Certain we can manufacture semis onshore with resources available in the US – CNB; - "China is right behind us. We're very, very close".

- Reportedly Miao Hua, who served on the China's top military body, the Central Military Commission, is expelled from the National People’s Congress – press [overnight update].

- China PBOC conduct CNY1.2T of outright reverse repos in Apr v CNY800B in Mar [overnight update].

- China Pres Xi: Urge measures to stabilize markets and expectations; To address weak links in economy; to achieve targets in all aspects - comments from Shanghai seminar on new 5-year plan [overnight update].

- China Foreign Min: Reiterates not engaged in any tariff negotiations with the US [overnight update].

- Hong Kong Mar M3 Money Supply Y/Y: 7.7% v 6.8% prior [overnight update].

Japan

- Nikkei 225 opens +0.3% at 36,152.

- BANK OF JAPAN (BOJ) LEAVES TARGET RATE UNCHANGED AT 0.50%; AS EXPECTED.

- BOJ QUARTERLY OUTLOOK FOR ECONOMIC ACTIVITY AND PRICES.

- Japan Apr Final PMI Manufacturing: 48.7 v 48.5 prelim (confirms 10th month of contraction).

- Japan Apr Consumer Confidence: 31.2 v 33.8e [lowest since Feb 2023].

- Japan PM Ishiba: Basic stance on tariff elimination has not changed [overnight update].

Korea

- Kospi closed for holiday.

- South Korea Apr Trade Balance: $4.9B v $4.3Be.

- Bank of Korea (BOK) Gov Rhee: South Korea needs to study QE adoption if rates near zero - financial press, after a seminar earlier today [overnight update].

Other Asia

- THAILAND CENTRAL BANK (BOT) CUTS BENCHMARK INTEREST RATE BY 25BPS TO 1.75%; AS EXPECTED; 2nd straight rate cut under the current easing cycle. [overnight update].

- Philippines Central Bank: Apr CPI to remain low; seen within 1.3-2.1% range [overnight update].

- Taiwan Central Bank (CBC) Mar Minutes: No need to hike rates and no room to cut rates [overnight update].- Taiwan Q1 Advance GDP Y/Y: 5.4% v 3.6%e [overnight update].

North America

- (US) Panel chaired by former NY Fed President Dudley noted the Fed should 'ditch' current policy framework, believes the Fed should end pledge to use periods of high inflation to offset periods when prices rise too slowly - financial press [update].

- (US) Treasury Sec Bessent: US-Ukraine deal is a signal to Russia's leaders - financial press.

- *Tesla’s Board said to have opened a search for a CEO to succeed Musk one month ago - WSJ.

- (US) Pres Trump: Reiterates there is a 'very good chance' that we will make a deal with China - financial press interview in town hall setting.

- US Senate resolution against Trump tariffs fails in 49-49 vote - Punchbowl.

- USTR Greer: Meetings with Japan, Saudi Arabia and Guyana tomorrow; We have meetings that are 'close', within weeks, including India - financial press.

- (US) Treasury Dept: Confirms US signs agreement with Ukraine to establish reconstruction investment fund; This agreement is a strong signal to Russia that Trump Admin is committed to a long term peace process, centered on a free and prosperous Ukraine.

- (US) MBA Mortgage Applications w/e Apr 25th: -4.2% v -12.7% prior.

- (BR) Brazil Mar Nominal (overall) Budget Balance (BRL): -71.6B v -58.4Be; Primary Budget Balance: 3.6B v 1.8Be.

- (BR) Brazil Mar National Unemployment Rate: 7.0% v 7.0%e.

- (MX) Mexico Q1 Preliminary GDP Q/Q: 0.2% v 0.1%e; Y/Y: 0.8% v 0.7%e.

- (US) APR ADP EMPLOYMENT CHANGE: +62K V +115KE (lowest since Dec 2020); "It can be difficult to make hiring decisions in such an environment.".

- (US) US TREASURY QUARTERLY REFUNDING ANNOUNCEMENT: TO SELL $58B IN 3-YEAR NOTES; $42B IN 10-YEAR NOTES AND $25B IN 30-YEAR NOTES; Repeats to keep most auction sizes unchanged for next several quarters.

- (US) Q1 EMPLOYMENT COST INDEX (ECI): 0.9% V 0.9%E.

- (US) Q1 ADVANCE GDP ANNUALIZED Q/Q: -0.3% V -0.2%E (1st negative print since Q2 2022); PERSONAL CONSUMPTION: 1.8% V 1.2%E.

- (US) Q1 ADVANCE GDP PRICE INDEX: 3.7% V 3.1%E; CORE PCE PRICE INDEX Q/Q: 3.5% V 3.1%E (highest since Q1 2023).

- (US) Pres Trump: This is Biden's stock market; Tariffs will start kicking in; Be patient - Truth Social post.

- (US) APR CHICAGO PURCHASE MANAGERS INDEX (PMI): 44.6 V 46.0E (17th straight month in contraction).

- (US) MAR PENDING HOME SALES M/M: 6.1% V 1.0%E; Y/Y: -0.1% V -5.7%E.

- (US) MAR PERSONAL INCOME: 0.5% V 0.4%E; PERSONAL SPENDING: 0.7% V 0.6%E.

- (US) MAR PCE PRICE INDEX M/M: 0.0% V 0.0%E; Y/Y: 2.3% V 2.2%E; Core PCE Price Index M/M: 0.0% v 0.1%e; Y/Y: 2.6% v 2.6%e.

- (US) DOE CRUDE: -2.7M V 0.1ME; GASOLINE: -4.0M V -0.9ME; DISTILLATE: +0.9M V -0.8ME.

- (US) Trump: Tariffs have not kicked in yet and China is already doing very poorly; Hope we will make a deal with China at a certain point, we are talking - Cabinet meeting.

- (US) USTR Greer: Reiterates that there are dozens of written trade offers; Deals are 'some weeks out,' we're working on it.

- (US) Treasury Sec Bessent: We are ready to sign the Ukraine minerals deal this afternoon if Ukraine is ready; Ukraine made some last minute changes, no changes on our side - cabinet meeting.

- (CO) Colombia Central Bank cuts Overnight Lending Rate by 25bps to 9.25%; not expected.

Europe

- (IE) Ireland Apr PMI Manufacturing: 53.0 v 51.6 prior (4th month of expansion).

- EU officials said to present U.S. trade proposals next week - press.

- (US) Senate Budget Committee Chair Graham (R-SC) reportedly pushes for bill proposing 500% tariff on any country which buying Russian oil; Pres Trump's position. on the bill is unknown, but support in Senate said to be above 60 threshold - WSJ.

- (IT) Italy Mar PPI M/M: -3.3% v +0.9% prior; Y/Y: 5.4% v 8.5% prior.

- (DE) GERMANY APR PRELIMINARY CPI M/M: 0.4% V 0.3%E; Y/Y: 2.1% V 2.0%E.

- (UR) Ukraine PM Smyhal: US and Ukraine are working out final details of minerals deal; To be signed in the nearest future; Two additional agreements to follow.

- AIR.FR Q1 €1.01 v €0.75 y/y, Adj EBIT €624M v €719e, Rev €13.54B v €12.37Be; Affirms guidance; Notes that tariffs will add complexity.

- (SA) Saudi Arabia Officials reportedly said that they can sustain prolonged periods of low oil prices - press.

- (RU) Russia Pres Putin: No doubt that relations with Europe will be restored sooner or later.

- (UR) Reportedly the EU has a 'Plan B' should Pres Trump walk away from Ukraine-Russia talks - FT.

Levels as of 01:20 ET

- Nikkei 225 +1.2%, ASX 200 +0.2%, Hang Seng closed; Shanghai Composite closed; Kospi closed.

- Equity S&P500 Futures +1.1%; Nasdaq100 +1.5%; DAX +0.9%; FTSE100 -0.1%.

- EUR 112.97-1.1333; JPY 142.88-144.02; AUD 0.6387-0.6427; NZD 0.5930-0.5952.

- Gold -2.4% at $3,338/oz; Crude Oil -0.1% $58.18/bbl; Copper +0.3% at $4.6240/lb.