RBA rate decision was inline with the consensus, central bank affirmed tightening basis
|Asia Market Update: RBA rate decision was inline with the consensus, Central Bank affirmed tightening basis, slightly revised statement; AUD declines, Aussie bond yields remained down; Focus now shifts to the RBNZ decision [Apr 5th], RBA Gov to also speak on Wed.
General trend
- Asia trading was very quiet in the morning sessions after US stocks were mixed overnight as the OPEC+ production cut was digested alongside soft US ISM figures (46.3, the lowest since May 2020).
- US Treasury yields and stocks were mostly flat up through 12:30am EST (14:30 Australian time) in anticipation of the Australia RBA rate decision, with almost unanimous opinion that the RBA would hold rates steady.
- US equity FUTs down slightly through the morning.
- Note that the Hong Kong and Shanghai markets will be closed for a holiday tomorrow (Wednesday).
- Fast Retailing [largest Nikkei component] to issue monthly sales after the Tokyo close.
Headlines/economic data
Australia/New Zealand
- (AU) ASX 200 opens -0.1% at 7,212.
- (AU) Australia Attorney General: Australia to ban Tiktok app on Govt dept and agency devices.
- (AU) Australia Roy Morgan Weekly Consumer Confidence +1.6pts.
- (AU) ACCC [Australia competition regulator]: Gas shortfall in 2023 less likely as gas supply outlook improves.
- (AU) Australia, UK sign new Statement of Intent on critical minerals.
- (CN) China Vice Commerce Minister Wong Shouwen meets Australia Dept of Foreign Affairs Official & Trade Deputy Secretary in China.
- (NZ) New Zealand Q1 NZIER Business Confidence: -66% v -70% prior.
- (NZ) New Zealand 8-month Budget Deficit (NZ$): 3.21B.
China/Hong Kong
- (HK) Hang Seng opens -0.2% at 20,364.
- (HK) Hong Kong Monetary Authority (HKMA) purchased HK$7.1B to defend its USD/HKD peg.
- (CN) Shanghai Composite opens flat at 3,297.
- (CN) China PBOC Open Market Operation (OMO): Sells CNY2.0B v CNY2.0B prior in 7-day reverse repos: Net drain CNY276B v drain CNY253B prior.
- (CN) China PBOC sets Yuan reference rate: 6.8699 v 6.8805 prior.
- (CN) Asia Development Bank (ADB): Raises China 2023 GDP growth forecast to 5.0% from 4.3% in Dec; sees 2024 GDP growth at 4.5%.
- (CN) China warns top bankers of further crackdowns on corruption - China press.
- (CN) China Mar New Yuan Loans expected to rise y/y [inline]- China Securities Journal.
- Evergrande Property says it signed restructuring agreement with key group of offshore creditors [ad-hoc group] –update.
Japan
- (JP) Nikkei 225 opens +0.1% at 28,213.
- (JP) Japan Mar Monetary Base Y/Y: -1.0% v -1.6% prior.
- (JP) Japan PM Kishida: To renew Japan's basic strategy for hydrogen by around end of May.
- (JP) Bank of Japan (BOJ) offers to buy 5-10 year JGBs at fixed rate of 50bps; Opens window to buy unlimited amount of 10-year JGBs at 0.50% [as expected].
- (JP) Japan Chief Cabinet Secretary Matsuno: Guidelines on human rights for Govt contracts have been drawn up.
- (JP) Former Japan FX Chief Nakao: Reiterates BOJ should review Yield Curve Control under new Governor Ueda.
South Korea
- (KR) Kospi opens +0.1% at 2,475.
- (KR) SOUTH KOREA MAR CPI M/M: 0.2% V 0.2%E; Y/Y: 4.2% V 4.3%E (slowest rise Y/Y since Mar 2022).
- (KR) Bank of Korea: Core inflation will fall by slower pace than headline inflation.
Other Asia
- (CN) China Consulate General in Los Angeles Spokesperson: Reiterates US House Speaker McCarthy-Tsai meeting is not conducive to regional peace, security and stability.
- (MY) Malaysia PM: Stressed to China that Petronas project in the South China Sea is within Malaysia’s territory.
- (SG) Singapore Mar Purchasing Managers Index (PMI): 49.9 v 50.0 prior.
- (CN) China, Philippines to hold "preparatory" oil talks in May – DFA.
- (TH) Thailand Mar Business Sentiment Index: 52.9 v 50.6 prior.
North America
- (US) Treasury Sec Yellen: OPEC+ cuts very unconstructive act; US banking system stabilizing but watching very closely.
- (US) Fed’s Bullard (Non-Voter): Need rates >5%; My forecast is above median; Open question if OPEC+ move will have a lasting impact - TV interview.
- (US) MAR ISM MANUFACTURING: 46.3 V 47.5E (lowest since May 2020); PRICES PAID: 49.2 V 51.1E.
- (US) FEB CONSTRUCTION SPENDING M/M: -0.1% V 0.0%E.
- (US) MAR FINAL S&P/MARKIT MANUFACTURING PMI: 49.2 V 49.3E (6th straight month of contraction).
Europe
- (UK) MAR FINAL MANUFACTURING PMI: 47.9 V 48.0E (confirms the 8th straight contraction).
- (EU) EURO ZONE MAR FINAL MANUFACTURING PMI: 47.3 V 47.1E (confirms 9th straight contraction and lowest print since Nov 2022).
- (DE) GERMANY MAR FINAL MANUFACTURING PMI: 44.7 V 44.4E (confirms 9th straight contraction).
- (FI) Finland confirms to officially join NATO on Apr 4th [**Note: would imply NATO's border length with Russia to roughly double].
- (EU) ECB's Holzmann (Austria): 50 bps hike is still in play at the May meeting.
Levels as of 01:20 ET
- Nikkei 225, +0.3%, ASX 200 +0.2% , Hang Seng -1.0%; Shanghai Composite +0.3% ; Kospi +0.5%.
- Equity S&P500 Futures flat; Nasdaq100 -0.2%; Dax +0.4%; FTSE100 +0.5%.
- EUR 1.0888 - 1.0910 ; JPY 132.18 - 132.95 ; AUD 0.6758 - 0.6794 ; NZD 0.6291 - 0.6310.
- Gold -0.2% at $1997/oz; Crude Oil +0.5% at $80.80/brl; Copper -0.6 at $4.0293/lb.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.