Safe-haven assets in focus amid upcoming weekend and Iran

Asia Market Update: Safe-haven assets in focus amid upcoming weekend and Iran; Oil rebounds and Gold FUTs hit $2,400, Silver FUTs hit $29; Asian stocks mixed post-US PPI; BoK and MAS hold; UK GDP tonight.

General trend

- The Wall St Journal, citing sources, said that it was expected that Iran would attack Israel ‘in the next two days’. Earlier an unnamed US official said that US expects any Iranian attack to be “calibrated”; Bigger than usual, but not so big it could draw the US into a war.

- Overnight US PPI came in ‘less hot’ than CPI the day before, with Asian stocks having a mixed session.

- The Nikkei led Asia through lunch, +0.7%, led by tech and chip-related in particular, despite heavy component Fast Retailing having fallen nearly 4% in the morning session following its post-close earnings (Net profit up, but perhaps not as much as market expected due to the weak yen).

- Quiet session for JGBs after volatility on Thurs.

- Bank of Korea and Singapore’s MAS both held monetary policy steady.

- Korea recorded its smallest job growth in over 3 years.

- Singapore’s Q1 advance GDP came in below estimates.

- New Zealand total card spending above estimates to be slightly back into positive territory m/m.

- US equity FUTs up slightly during Asian trading.

- China is due to release Mar Trade Balance.

Looking ahead (Asian time zone)

- Fri eve UK GDP, Fri night US Michigan Consumer Sentiment.

Holidays in Asia this week

- Fri Apr 12th Indonesia.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens -0.2% at 7,795.

- New Zealand Mar Total Card Spending M/M: +0.1% v -1.9% prior.

- New Zealand Mar Food Prices M/M: -0.5% v -0.6% prior.

- New Zealand Mar Manufacturing PMI: 47.1 v 49.3 prior (13th straight contraction).

China/Hong Kong

- Hang Seng opens -0.7% at 16,978; Shanghai Composite opens flat at 3,035.

- China NDRC (State Planner): Finalises rule to set up Coal Production Reserve System by 2027.

- General Dyanmics (GD) China reportedly sanctions General Dynamics' land systems for arms sales to Taiwan - press [**Note: China has already sanctioned and fined some US firms for Taiwan arms sales several times earlier] [overnight update].

- China Industry Ministry MIIT: See automation of 'key processes' >75% by 2027 [overnight update].

- China Finance Ministry (MOF): Vow greater support for loan interest rate discount [overnight update].

- China Foreign Minister Daily Briefing: China will take all necessary actions against US to protect companies [overnight update].

- China NDRC Dep Director Zhao Chenxin: China plans to strongly spur investment and consumption [overnight update].

- China PBOC sets Yuan reference rate: 7.0967 v 7.0968 prior.

- China PBOC Open Market Operation (OMO): Sells CNY2B in 7-day reverse repos; Net CNYB v injects CNY2B prior.

Japan

- Nikkei 225 opens +0.7 % at 39,722.

- Fast Retailing (9983.JP) Reports H1 Net ¥195.9B v ¥153.4B y/y, Op ¥257.1B v ¥220.3B y/y, Rev ¥1.60T v ¥1.47T y/y; Cuts FY24 Rev, Affirms Op, Raises Net outlook

- Japan Fin Min Suzuki: Handling of BOJ's ETF holdings (incl. sale) is for BOJ to consider.

- Japan Fin Min Suzuki: There is a chance FX will be discussed at next week's G20 meeting - Japanese press.

- BOJ might prefer to wait at least until autumn before hiking rates [inline]; rising import prices from weak yen could further hurt consumption; cites 1 source – financial press [update].

- Bank of Japan (BOJ) Quarterly Public Opinion of Household Sentiment Survey: (March 2024 Survey): Sees 80.6% of households expect price to rise now vs. 76.5% in prior survey.

- Japan PM Kishida: No decision yet on holding regular trilateral summits with US and Philippines - Japanese press.

- Bank of Japan (BOJ) announcement related to outright bond buying operations: For 1-3 Years; 3-5 Years and 5-10 Years; Leaves amounts unchanged.

- Japan sells ¥5.8T vs. ¥5.8T indicated in 3-Month Bills; Avg Yield: 0.0040% v 0.0047% prior; bid- to-cover: x v 3.60x prior.

- Japan PM Kishida: The world needs the US to continue to play a pivotal role in affairs with nations - Congress address [overnight update].

South Korea

- Kospi opens +0.2% at 2,710.

- BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 3.50%; AS EXPECTED.

- BOK Gov - post rate decision press conference; Today's decision to hold rates was unanimous; Have not signaled for a rate cut.

- South Korea Mar Unemployment Rate: 2.8% v 2.8%e (smallest job growth since Feb 2021).

Other Asia

- SINGAPORE MONETARY AUTHORITY (MAS) QUARTERLY MONETARY POLICY STATEMENT: NO CHANGE TO ITS WIDTH AND THE LEVEL AT WHICH IT IS CENTRED.

- SINGAPORE Q1 ADVANCE GDP Q/Q: 0.1% V 0.5%E; Y/Y: 2.7% V 3.0%E.

- US, Japan, Philippines to launch infrastructure partnership in Philippines on ports, rail, clean energy, semiconductor supply chains.

North America

- (IL) Follow up: US expects an attack by Iran against Israel, one they think would be calibrated bigger than usual, but not so big it could draw the US into a war - financial press citing an unnamed US Official.

- (US) INITIAL JOBLESS CLAIMS: 211K V 215KE; CONTINUING CLAIMS: 1.817M V 1.80ME.

- (US) MAR PPI FINAL DEMAND M/M: 0.2% V 0.3%E; Y/Y: 2.1% V 2.2%E (highest annual pace since Sept 2023); (ex-food/energy) M/M: 0.2% v 0.2%e; Y/Y: 2.4% v 2.3%e.

- (US) Fed’s Barkin (voter): Latest inflation data did not increase confidence that disinflation is spreading in the economy.

- (US) Fed's Williams (voter): Outlook is uncertain, the Fed must be data dependent; Expects some easing in rental inflation.

- (US) WEEKLY EIA NATURAL GAS INVENTORIES: +24 BCF VS. +9 BCF TO +11 BCF INDICATED RANGE.

- (US) Fed's Collins (non-voter): Expects inflation to continue to moderate; Strong job market reduces urgency for a rate cut; Appropriate to begin rate cuts later this year

- (US) TREASURY $23B 30-YEAR BOND REOPENING DRAWS 4.671% V 4.331% PRIOR; BID TO COVER 2.37 V 2.47 PRIOR AND 2.42 OVER LAST 8 REOPENINGS.

Europe

- *(IR) Iranian attack expected on Israel "in next two days" - WSJ, citing sources.

- Lanxess (XS.DE) China Commerce Min: "Envalior" is still Lanxess via JV: To inherit 8.2% anti-dumping tax previously applied to Lanxess.

- (IT) Italy officials reportedly to hold meeting with China on economic cooperation - press.

- (IL) Follow up: US expects an attack by Iran against Israel, one they think would be calibrated bigger than usual, but not so big it could draw the US into a war - financial press citing an unnamed US Official.

- (IL) Israeli PM Netanyahu: Preparing for challenges from other arena's; Whoever hurts us, we will hurt them.

- (EU) ECB LEAVES KEY RATES UNCHANGED; AS EXPECTED; Not pre-committing to a particular rate path, but notes if confident inflation is converging to 2% target in a sustained manner, it would be appropriate to reduce the current level of monetary policy restriction.

- (EU) ECB Chief Lagarde: Can't commit to route of policy until we get some more data in Apr; Will be well informed for June - Q&A.

- (DE) Germany Fin Min Lindner: No need for further European debt - comments ahead of Eurogroup meeting.

- (EU) ECB policymakers reportedly still expect to cut interest rates in June - press.

- (UK) BOE's Greene (neutral): Worse to cut rates then have to raise them again; Easing too early risks future tightening.

- (IR) Reportedly Iran sent a message to Washington on Sunday that it plans to retaliate against Israel for the Syrian embassy strike in a way that will avoid a major escalation - press.

Levels as of 01:20 ET

- Nikkei 225, +0.3%, ASX 200 -0.3% , Hang Seng -1.7%; Shanghai Composite flat ; Kospi -0.8%.

- Equity S&P500 Futures: flat; Nasdaq100 flat, Dax flat; FTSE100 flat.

- EUR 1.0729-1.0711 ; JPY 153.29-152.96 ; AUD 0.6543-0.6526 ;NZD 0.6011-0.5995.

- Gold +1.3% at $2,403/oz; Crude Oil +0.7% at $85.61/brl; Copper flat at $4.2642/lb.