Mostly Higher In Asia; Search For Bottom In Chinese Equities Continues

Major Asia-Pac equity indices are mostly higher at writing, largely following a positive lead from Wall St.

• The CSI300 sits 0.5% softer at typing, on track to record a fourth straight day of losses despite rising from session lows. The earlier move lower came as the PBOC chose to hold LPR rates steady, largely surprising market expectations. The real estate sub-index (-4.4%) underperformed as the sector looks set to continue struggling with a liquidity crunch, compounding dismal new home sales data earlier on Monday (-25.6% YTD Y/Y) pointing to a third straight quarter of declines. On the other hand, consumer staples outperformed, with the sub-index hitting one-month highs earlier in the session on broad gains in Chinese liquor companies.
• Taking a step back, hopes for economic stimulus/easier monetary policy in China amidst an ongoing barrage of weak economic data have largely evaporated for now, following no change to the MLF rate last week, as well as a 25bp RRR cut (against hopes for a less “conservative” 50bp cut). Many are now looking to consideration for supportive measures to be taken in Q2 instead in line with a more cautious pace of easing, in line with intensifying official rhetoric re: supportive policy.
• The Nikkei 225 sits 0.9% better off at typing, back from best levels after the JPY staged a comeback, with USD/JPY on track to snap a 13-day streak of gains. Export-related names particularly in electronics and automobile manufacturers nonetheless held on to earlier gains, with large-cap Fast Retailing contributing the most.
• U.S. e-mini equity index futures are 0.1% to 0.7% worse off at writing, rising from worst levels inspired by Netflix’s -25.7% after-hours plunge (following well-covered reports of a large miss in new subscriber figures)