EM ASIA CREDIT: JD.com (JD, A3/A-/NR) Q1 results give S&P confidence

• Bond futures jumped on a better-than-expected 1Q GDP release.
• The 10YR future jumped +0.15 post the release before backing away to be +.11 at 109.08
• The 10YR future remains established above all major moving averages; the nearest the 20-day EMA of 108.51.
• The 2YR future remains modestly higher by +0.01 at 102.55 and remains at the mid-point of the 20-day EMA of 102.53 and the 50-day EMA 102.56.
• Cash markets are strong with the CGB10YR lower by -1.5bps at 1.64%
• The data release today poses no immediate pressure for authorities for monetary policy action, rather providing them with time to assess the impact of the trade war. 

JPY crosses are consolidating at or near their recent highs as broader risk appetite market sentiment stabilised somewhat and we approach a long weekend. CNY/JPY continues to be the outlier and is pressing its recent lows. Top trade representative Ryosei Akazawa will be looking for some early results from its US Tariff negotiations. He commented this morning that he is “ Feeling ready for US trade talks, Will negotiate with Japan’s interest in mind “ - BBG

• EUR/JPY - Overnight range 161.30 - 162.80, Asia has bounced off the lows to be dealing around 161.70. EUR/JPY stuck in the middle of its wider 155 - 165 range, looking for a catalyst to challenge this.
• GBP/JPY - Overnight range 188.56 - 189.59, Asia has drifted back to 1.8900. Sellers looking to reengage the market on bounces back towards 190.00
• AUD/JPY - Overnight range 90.60 - 91.40, Asia has drifted lower from the open breaking the overnight lows as US Equity futures come under pressure, currently dealing 90.45. The pair has failed on multiple attempts back towards 92, but expect more consolidation going into a long weekend.
• CNH/JPY - Overnight range 19.4789 - 19.6119, Asia drifted lower and then got another leg after the Yuan Fix. Another fix higher in USD/CNY at 7.2133 continues to point to the PBOC slowly managing the currency lower. CNY/JPY continues to be the outlier and bounces have been limited even in the face of a bounce in risk. The first target looks to be around the 18.70 area.
• There has been little positive follow from the earlier China data outcomes, which on balance were better than forecast, particularly IP and retail sales. Local equities are down, with focus on trade/tariff issues.  

Fig 1 : CNH/JPY Weekly Chart

Source: MNI - Market News/Bloomberg

China and Hong Kong equities have seen little upside so far from Q1 GDP and March monthly data prints. The data was mixed, but on balance better than expected. This of course comes ahead of the tariff impact, while at face value little headway appears to have been made in terms of lowering actual tariff rates or starting negotiations between the two sides.

• The HSI was last off 2%, close to session lows. The HSTECH sub index was down over 3%. Earlier reports on chip export curbs from bellwether Nvidia to China a likely headwind (US equity futures are down led by the tech side).
• The Hong Kong postal service will also stop official postal services for goods to US (per earlier BBG and RTRS headlines) from April 27. This follows the removal of US duty-free de minimis on packages from both China and Hong Kong (which will kick in on May 2).
• The US has also announced a probe into critical minerals, with tariffs potentially following.
• The CSI 300 is down around 0.80% in latest dealings, also close to session lows.
• The local stats bureau stated that China should reach its growth target, but that domestic demand is insufficient.
• At the same time that the data was printing, headlines crossed on an action plan to boost services consumption (see this BBG link).