Copper jumps higher on Trump

Asia market update: Dovish BOJ Gov sees USD/JPY recover overnight correction even as JGB yields edge higher; AU govt increases issuance; Copper jumps higher on Trump; Focus on UK Feb CPI, US Feb Durable Goods.

General trend

- Asian equities had a positive day, led by the Kospi and Nikkei, both up >1.0% on a day without major news or events to drive an agenda.

- In his third day of parliamentary testimony, Gov Ueda reiterated the main themes of the first two days; Reserving any comment on FX, while reiterating his belief that prices and wages won't rise in Japan 'is fading' but that the Price trend is still below 2%. Noted Japan real interest rate currently around -2.0% and believes the rise in long-term yields won't affect BOJ's financial health. Market took his comments as dovish as USD/JPY gained back another 0.5% to 150.50 level.

- OIS probability of a May 25bps hike by the Japan BOJ rose to 25% Tuesday v 23.5% Monday, with July rising to 84% v 81% Monday.

- Japan 10-year JGB yield rose to 1.586% [highest since Oct 2008], as Japanese yields across the curve kept edging higher for a fifth day in a row.

- Aussie 10-yr yields up another 4.5bps after the extra issuance of A$150B announced by the Australian debt agency this morning for FY25-26, following last night’s budget saw an initial +5bps on spending announcements and an increased budget deficit prior to the election in May. Yields pared some of their increases after a weaker than expected AU PPI for Feb.

- CK Hutchison +1.9% after reportedly to proceed with deal to sell ports in Panama and the company hiring an analyst to write a column defending the deal.

- Copper jumped another 2% to fresh record highs after Pres Trump said he may implement copper import tariffs 'within weeks' (later paring over half of the day's gain).

- US equity FUTs flat during Asian trading.

Looking ahead (Asian time zone)

- Wed Mar 27th (Wed eve UK Feb CPI, US Feb Durable Goods).

- Thu Mar 27th (Thu night US final Q4 GDP).

- Fri Mar 28th JP BOJ Summary of Opinions, (Fri night US Feb Core PCE).

Holidays in Asia this week

- Fri Mar 28th Indonesia.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.3% at 7,968.

- Australia Feb CPI Y/Y: 2.4% V 2.5%E.

- Australia AOFM to issue ~A$150B in Treasury Bonds in 2025-26.

- Australia Fin Min Gallagher: Budget tax cuts are a top up on earlier relief - financial press interview.

- Australia sells A$800M v A$800M indicated in 3.50% Dec 2034 bonds: Avg Yield: 4.4640% v 4.4519% prior; bid-to-cover: 3.73x v 3.17x prior.

- Overnight, Australia Treasurer Chalmers presented his FY25/26 Federal Budget speech which narrowed the FY25/26 Budget Deficit from 46.9B to 42.1B v 40.0Be while maintaining the GDP growth forecast at 2.25%. He did raise the FY25/26 CPI Inflation from 2.75% to 3.00%. Speech noted to cut bottom tax rate from 16% to 14% over 2 years and extend energy rebates through end of 2025 [overnight update].

China/Hong Kong

- Hang Seng opens +0.5% at 23,460; Shanghai Composite opens -0.1% at 3,365.

- CK Hutchison (1.HK) Said to proceed with deal to sell ports in Panama - US financial press.

- USD/CNH 1-week implied vol rises to >4.5, covers Apr 2nd.

- China PBOC Adviser: There is a risk that the US-led globalization (trend) may reverse - comments at Boao forum.

- Banks in China said to have recently optimized consumer loan products in order to support consumption; Bank of China [private bank] raised the maximum limit for consumer loan products from CNY300K to CNY500K - Shanghai Securities News.

- China Securities Times: Analysts call for easing of car purchase restrictions in order to support GDP and boost consumption.

- China Foreign Min Wang Yi: China and the US have 'broad room' for cooperation - financial press.

- China reported to expand carbon trading markets into Steel, Aluminum and Cement sectors - financial press.

- China adviser said to urge increasing consumption to 70% of GDP by 2035 - US financial press.

- HKMA Chief: Sees bigger opportunity in the next few years in Chinese capital going out to the world through Hong Kong than offshore capital flowing onshore.

- Hong Kong Feb Trade Balance (HK$): -36.3B v -34.4Be [overnight update].

- China PBOC sets Yuan reference rate: 7.1754 v 7.1788 prior.

- China PBOC Open Market Operation (OMO): Injects CNY455B in 7-day reverse repos; Net injects CNY160B v injects CNY105B prior.

Japan

- Nikkei 225 opens +0.8% at 38,075.

- Japan Feb PPI Services Y/Y: 3.0% v 3.1%e.

- Japan Jan Final Leading Index CI: 108.3 v 108.0 prelim; Coincident Index: 116.1 v 116.2 prelim.

- Bank of Japan (BOJ) Gov Ueda: Reiterates domestic economy is recovering moderately, albeit with some weakness - BOJ Semi-annual report at parliament.

- Japan ruling LDP party official Satsuki Katayama: Sees Yen's "real value" at 120-130 range (currently ~150 v USD).

- Japan 10-year JGB yield rises to 1.585% [highest since Oct 2008].

- Japan 2-year JGB yield rises to 0.88% [highest since Jun 2008].

Korea

- Kospi opens +0.5% at 2,628.

- South Korea Mar Business Manufacturing Survey: 91.9 v 90.1 prior.

- South Korea acting Pres Han: Wildfires are the worst ever - situation is not good - financial press.

Other Asia

- Singapore Feb Industrial Production M/M: -7.5% v +0.5%e; Y/Y: -1.3% v +7.0%e.

- Taiwan Central Bank (CBC): Taiwan's high current account surplus a 'structural problem', reflecting the sharp increase in US demand for Taiwan technological products - financial press.

- (TW) US Annual Threat Assessment Report: China is likely to increase economic pressure on Taiwan if it sees Taiwan is taking steps toward formal independence; China is advancing military capabilities for a cross-strait campaign.

- Vietnam Finance Ministry: To cut tariffs on 'several' US products, incl US LNG to 2% (prior 5%), to take effect in March - financial press.

- Sri Lanka Central Bank (CBSL) leaves Overnight Policy Rate (OPR) unchanged at 8.00%; as expected.

- Taiwan Feb Industrial Production Y/Y: 17.9% v 17.3%e [overnight update].

North America

- (US) Fed's Goolsbee (voter): Next cut may take longer than anticipated; Sees borrowing costs a 'fair bit lower' in 12-18 months - FT.

- China new energy rules for advanced chips may 'hit' Nvidia - FT.

- (US) President Trump may implement copper import tariffs 'within weeks' - US financial press.

- (US) Treasury Sec Bessent: Says hosted House and Senate leaders to work on US tax cuts - post on X.

- US Pres Trump: Signs EO aimed at pushing Treasury to modernize payment system in order to reduce fraud and abuse.

- (US) US Pres Trump: We remain in deep discussions with Russia and Ukraine; We made a lot of progress.

- (US) PRES TRUMP REPORTEDLY CONSIDERS TWO-STEP TARIFF REGIME ON APRIL 2; Could immediately use Section 338 of the Tariff Act of 1930, to potentially apply tariffs of up to 50% on the US's trading partners - FT.

- (MX) Mexico Jan Retail Sales M/M: 0.6% v 0.0%e; Y/Y: 2.7% v 1.1%e.

- (US) Mar Philadelphia Fed Non-Manufacturing Activity: -32.5 v -13.1 prior.

- (US) Fed's Kugler (voter): Survey shows consumers expecting further increases in near-term, with uncertainty connected to trade policy; Recent goods inflation unhelpful and affects expectations - speech text.

- (CA) Canada PM Carney: Promises unprecedented acceleration of investment in our armed forces if Liberals win April 28 snap election.

- (US) Jan FHFA house price index: 0.2% V 0.3%E.

- (US) Jan S&P corelogic house price index (20-CITY) M/M: 0.5% V 0.40%E; Y/Y: 4.7% V 4.80%E.

- (US) Mar Richmond Fed Manufacturing index: -4 V 1E; Business conditions -14 v 1 prior; Volume of new orders: -4 v 0 prior.

- (US) Mar consumer confidence: 92.9 V 94.0E (lowest since July 2022).

- (US) Feb new home sales: 676K V 680KE.

- (US) Trump Nominee for Social Security Agency Bisignano: Has been told by the President to preserve and protect social security.

- (US) Treasury $69B 2-year note auction draws 3.984% V 4.169% prior; bid-to-cover ratio: 2.66 v 2.56 prior and 2.64 over the last 12.

- (US) US Pres Trump: Mexico and Canada have stepped up a lot.

Europe

- EU) Italy's Draghi (former ECB chief): Says Germany's shift on defense spending is a 'game changer' - comments at HSBC investment summit.

- (RU) Russia Kremlin: Russia confirms that Moscow has agreed to ensure safe navigation in Black Sea; Deal can begin after some sanctions have been lifted.

- (EU) ECB’s Vujcic (Croatia): April ECB meeting completely open; More data needed.

- (HU) Hungary central bank (MNB) leaves base rate unchanged at 6.50%; as expected.

- (UR) US White House: US and Russia agree on safe navigation in the Black Sea.

- (UR) Pres Zelenskiy: Ukraine and US teams didn't discuss occupied territories; Ukraine will implement partial ceasefire now; US offered more comprehensive framework for minerals deal.

- (UR) Pres Zelenskiy: Kremlin is lying when it says the Black Sea ceasefire depends on sanctions (on Russia being eased); We will do everything to make the agreements work.

Levels as of 00:20 ET

- Nikkei 225 +1.1%, ASX 200 +0.8%, Hang Seng +0.3%; Shanghai Composite +0.1%; Kospi +1.3%.

- Equity S&P500 Futures flat; Nasdaq100 flat; DAX flat; FTSE100 +0.4%.

- EUR 1.0778-1.0798; JPY 149.84-150.62; AUD 0.6279-0.6312; NZD 0.5715-0.5750.

- Gold -0.2% at $3,048/oz; Crude Oil +0.3% at $69.20/brl; Copper +0.4% at $5.2463/lb.