China Trade Data Misses Expectations, Aussie Unemployment At 1-Year Low

(CN) CHINA APR TRADE BALANCE: $18.42B V $9.9BE

(AU) AUSTRALIA APR UNEMPLOYMENT RATE: 4.9% V 5.3%E (1-yr low); EMPLOYMENT CHANGE: 15.5K V -5.0KE (2nd consecutive increase); PARTICIPATION RATE: 65.2% V 65.4%E

(KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 3.25%; AS EXPECTED

(JP) JAPAN MAR CURRENT ACCOUNT TOTAL: ¥1.59T V ¥1.4TE; ADJUSTED CURRENT ACCOUNT TOTAL: ¥785.5B V ¥647BE; CURRENT ACCOUNT BALANCE Y/Y: -8.6% V 17.1%E; TRADE BALANCE: ¥4.2B V -¥43BE

(NZ) NEW ZEALAND APR BUSINESS NZ PMI: 48.0 V 53.8 PRIOR

(PH) PHILIPPINES MAR TOTAL EXPORTS: -1.2% V 11.0%E; TOTAL MONTHLY EXPORTS: $4.3B V $4.4B PRIOR

(NZ) NEW ZEALAND APR QV HOUSE PRICES Y/Y: 3.1% V 3.0% PRIOR

(JP) JAPAN APR BANK LENDING INCLUDING TRUSTS Y/Y: 0.3% V 0.8% PRIOR; BANK LENDING EX-TRUSTS Y/Y: 0.4% V 0.9% PRIOR

(JP) JAPAN APR BANKRUPTCIES Y/Y: -7.5% V -1.9% PRIOR

(JP) JAPAN APR ECO WATCHERS CURRENT SURVEY: 50.9 V 51.8 PRIOR; OUTLOOK: 50.9 V 49.7 PRIOR

(MA) MALAYSIA MAR INDUSTRIAL PRODUCTION Y/Y: 0.6% V 3.3%E; MANUFACTURING SALES VALUE Y/Y: 3.1% V 12.1% PRIOR

(JP) JAPAN APR TOKYO AVERAGE OFFICE VACANCIES Y/Y: 9.2% V 9.0% PRIOR

(JP) Japan investors bought ¥56B in foreign bonds last week v ¥1.2T sold in prior week

(CO) Colombia Mar Exports: $5.69B v $4.8B prior

Markets Snapshot (as of 04:30GMT)

Nikkei225 -0.1%

S&P/ASX +0.1%

Kospi -0.1%

Taiwan Taiex +0.2%

Singapore Straits Times Index -0.2%

Shanghai Composite -0.2%

Hang Seng -0.9%

Jun S&P Futures +0.2% at 1,353

June gold unchanged at $1,594/oz

June Crude -0.2% at $96.57

Overview/Top Headlines

Focus remains on European uncertainty. Bank of Korea after leaving rates unchanged mentioned it remains one of the top risks, noting that it thinks the EU is in a mild recession but not expected to get worse. China remained cautious with its yuan setting and it expected to continue to do so until the latest storm blows over. According to China Investment Corp President Gao, China sovereign wealth fund has stopped buying European government sovereign debt.

Late in the US session, the Fed gave Chinese banks ICBC, Bank of China and Agricultural Bank of China approval to expand into the US market. Crude was weaker, Brent Crude rose to $113.20, corn gained over 1% while wheat fell nearly 3% to $5.91 ahead of U.S. Department of Agriculture supply-demand report.

Australia recorded a lower-than-expected unemployment rate at 4.9% in April, a 1-year low. Employment change rose for the second consecutive month. The news drove the AUD/USD higher above $1.0115, but will make an argument not to cut rates at the next RBA meeting. Full time jobs lost 10,500, however part time jobs added 26,000 close to March levels. Strength in the jobs market is mostly attributed to the mining boom and the huge investments from the major miners into expanding capacity to meet demand from India and China. Australia 10-year yields around 3.321% after the data.

China April trade balance came in at a surplus of $18.4B, much higher than expected, exports at 4.9% were weaker than expected, imports rose only 0.3%. Some of the export weakness is attributed to the lack of recovery from European demand. China has increased its calls for the US to ease restriction on high tech exports in recent weeks in order to help imbalances. The yuan fell for a fifth consecutive day after a weaker setting by the PBoC. Shanghai Composite and Hang Seng both declined, iron ore imports say a huge fall off to 57.7M tons, -8% m/m, copper imports also fell 8% m/m, this sent the S&P ASX back towards unchanged territory after rebounding from employment data. Miners in Australia pared back some of their earlier gains as well. Surprisingly copper futures held on to their gains.

Speakers/Geopolitical/In The Press

(JP) BoJ's Shirai: Japan economic activity is more or less flat though there are indications of improvement.

(HK) Hong Kong govt may increase public housing rent by 10%. - HK press

(KS) South Korea Finance Min Bahk: Recent Won's moves not a concern, as the currency has been moving in a limited range.

Equities

Hynix, 000660.KR: Creditors planning to sell half of their 6.4% stake in the company, worth KRW576B. - Korean press

CHU: Expects 3G users to reach 90M by the end of 2012; Sees 3G rev at CNY70B v CNY40B in 2011.

RIO: CEO: Affirms it is more confident out its outlook than 6-months ago; Tackling rising costs, especially in Queensland is challenging. - AGM

STEL.SG: Reports FY12 Net S$3.99B v S$3.8B y/y; Rev S$18.8B v S$18.07B y/y.

ORG.AU: In talks with the United States' Export-Import Bank to acquire A$2.93 B in financing to help fund $6.0B expansion of Australia Liquefied natural gas facility in Gladstone. - The Australian