Weak AU jobs not enough for RBA rethink?

Asia market update: Weak AU jobs not enough for RBA rethink? Hawkish BOJ Ueda vs steady FOMC sees Yen up two handles, KR political drama continues; Focus on UK BOE Rate Decision tonight; JP Feb CPI tomorrow.

General trend

- After more than a year of strong jobs helping to keep rates high in Australia, unexpectedly poor Aussie jobs numbers for Feb saw AU 10-yr yields -7bps and Aussie dollar fall -0.4% upon the biggest drop in payrolls since Dec 2023. Conversely, AU stocks jumped +1.1% to outperform Asia. Revisions to RBA rate forecasts in Australia likely to take place, with market expectations at only an 8% chance of a cut prior to the jobs report. Reminder that the RBA to meet in April, ahead of the May federal election [date note yet specified]. AUD and Bond losses somewhat pared later, with markets betting the jobs numbers may not be enough to induce a cut from the RBA in April.

- On balance hawkish comments from BOJ Gov Ueda after yesterday’s hold by the BOJ. But the big move came after the FOMC overnight when the Fed did not tighten its dot plot, seeing USD/JPY fall from 150 handle to 148 handle.

- OIS chances of BOJ 25bp hike by July rose to 77.5%, vs 72% yesterday with 2yr JGB yields +3bps to 0.852%.

- Hang Seng underperformed Asia, with Ping An Insurance -4% even as BYD, Q Tech, United Lab, 3SBIO hitting new high. Geely +3.7% after good FY24 numbers.

- On a day that saw South Korea disclose record total debt levels throughout the country, the political situation got even messier with opposition lawmakers now looking to impeach South Korea Acting President Choi, even as the country still waits for the Constitutional Court to decide on the legitimacy of Pres Yoon’s impeachment.

- China PBOC left its monthly Loan Prime Rate (LPR) unchanged, as expected.

- New Zealand Q4 GDP came in higher than expected, moving out of technical recession. Noted rises in rentals, hiring and real estate services, along with retail trade and accommodation and a boost in tourism spending. However, no likely impact on RBNZ rate path as NZ 10-year yields -6bps, continuing down after the Aussie jobs data.

- After strong selling pressure on Indonesian bourses in recent days culminating in a trading halt on Tuesday (-6%), today saw a 2% bounce-back in Indonesian stocks, even as the Central Bank held rates at 5.75%.

- Spot gold continued setting fresh record highs over 3,050/oz, following the FOMC warning of lower growth.

- US equity FUTs +0.5% to +0.7% during Asian trading with Nasdaq stronger after Nvida CEO said to have committed to ‘several hundred billion dollars’ in US chip-making over the next 4 years.

Looking ahead (Asian time zone)

- Thu Mar 20th (Thu eve UK BOE Rate Decision, Thu night US Feb Home Sales).

- Fri Mar 21st JP Feb CPI, TW CBC Rate Decision.

Holidays in Asia this week

- Thu Mar 20th Japan.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.1% at 7,837.

- Australia feb employment change: -52.8K V +30.0KE; unemployment rate: 4.1% v 4.1%E [largest drop in payrolls since Dec 2023 at -62.7K].

- Australia Feb Port Hedland Iron Ore Exports: 37.1Mts v 45.9Mts m/m; Iron Ore Exports to China: 31.6Mts v 39.1Mts m/m.

- New Zealand Q4 GDP Q/Q: +0.7% V 0.4%E; Y/Y: -1.1% V -1.4%E.

- NZ Commerce Commissions said to probe impact of Net Zero banking alliance - financial press.

- Fonterra [FCG.NZ]: Reports (NZ$) H1 Net 729M v 544M y/y; Rev 12.59B v 11.26B y/y' Affirms guidance.

China/Hong Kong

- Hang Seng opens flat at 24,753; Shanghai Composite opens -0.1% at 3,425.

- China PBOC monthly loan prime rate (LPR) setting: leaves-year and 5-year lpr rates unchanged; as expected.

- China Feb Swift Global Payments (CNY): 4.3% v 3.8% prior [6-month high].

- China Pres Xi said to emphasize 'sustainable growth' of tourism industry during Yunnan visit (Southwest China) - Chinese state media.

- China Securities Regulator (CSRC): Reported to be holding Symposium on 'fair competition' - financial press.

- Hong Kong said to consider re-applying a 10% deposit requirement on retail orders in IPOs, seeking feedback on other margin requirements to contain risks - Ming Pao.

- US President Trump: Confirms would not mind a June summit with China President Xi.

- HKMA leaves rates unchanged at 4.75% (as expected), tracking the Fed.

- Reports Q4 (CNY) Adj Net 55.3B v 53.3Be, Op 51.5B v 52.1Be, Rev 172.5B v 168.7Be; Announces at least HK$80B buyback (1.6% of market cap); Proposes increasing annual div by 32% to HK$4.50/shr [overnight update].

- China PBOC sets Yuan reference rate: 7.1754 v 7.1697 prior [weakest setting since Jan 20th].

- China PBOC Open Market Operation (OMO): Injects CNY269B in 7-day reverse repos; Net injects CNY233B v injects CNY121B prior.

Japan

- Nikkei 225 closed for holiday.

- BoJ GOV Ueda: May need to raise rates at faster pace if upside risks to prices heighten [overnight update].

- BOJ Gov Ueda: Early April may discern overseas uncertainty more; There was a view at today's meeting that there was upward pressure on inflation; Spring wage talk results were somewhat strong [overnight update].

- BOJ Gov Ueda: To raise rates if economic outlook is realized; Domestic economy is recovering moderately; Price trend to be in line with goal in second half of horizon outlook; Early April may discern overseas uncertainty more - post rate decision press conference [overnight update].

- JSDA Head: Japan 10-year JGB yield is pricing in at least 3 more rate hikes; market view of BOJ rate hikes might be 'excessive'.

Korea

- Kospi opens +0.7% at 2,648

- Opposition lawmakers said to impeach South Korea Acting President Choi - Yonhap, citing main DP opposition floor leader.

- South Korea total debt [government, corporate and household debt] hit record high of >KRW6,200T at end-Q3, +4.1% y/y - Yonhap.

- South Korea to continue to monitor financial markets closely - comments post- FOMC rate decision.

- Rival political parties in South Korea parliament said to have agreed to pension reform - Korean press.

Other Asia

- Indonesia parliament said to approve 'contentious' revisions to military law, despite public backlash - financial press.

- Vietnam plans to allow 49% foreign ownership of some domestic banks - financial press.

- Thailand preparing 'steps' such as tax revamp and US product imports ahead of US reciprocal tariffs - Thai media.

- Philippines Central Bank (BSP) Gov Remolona: Policy rate cut likely in April, with total of 50bps in 2025 - financial press.

- Indonesia central bank (BI) leaves BI-rate unchanged at 5.75%; as expected.

North America

- (US) Nvidia CEO Huang: Nvidia to spend "hundreds of billions of dollars over next 4 years" on US chipmaking - FT.

- (US) President Trump: Reiterates Fed would be 'much better off' cutting rates; Apr 2nd is 'liberation day in America' - follows Fed decision.

- (US) Pres Trump: Golden Visa proceeds will go to pay down US debt - Fox news interview.

- Brazil central bank (BCB) raises selic target rate by 100bps to 14.25%; as expected.

- US Energy Sec Wright: Confirms signed LNG export approval CP2 this morning.

- (US) MBA Mortgage Applications w/e Mar 14th: -6.2% v 11.2% prior.

- (UR) US Special Envoy Witkoff: My understanding is that energy assets (under Ukraine-Russia partial ceasefire) are off limits as of today; Think sides can get to full-on ceasefire in couple of weeks; Meeting between US Pres Trump and Russia Pres Putin likely to happen.

- (US) DOE CRUDE: +1.7M V +1ME; GASOLINE: -0.5M V -2ME; DISTILLATE: -2.8M V 0ME.

- (UR) US Pres Trump: Just completed a "very good" one hour call with Zelenskiy; "We are very much on track".

- (UR) Pres Zelenskiy said to support partial Ukraine-Russia ceasefire on energy assets on call with US Pres Trump - press.

- (US) Pres Trump: Iran must stop sending supplies to Houthis immediately - Truth Social post.

- (US) FOMC leaves target range unchanged between 4.25-4.50%; as expected; lowers treasury rolloff cap to $5B from $25B; removes language about goals being roughly in balance.

- (US) FOMC summary of economic projections (SEP) for March: Maintains median forecast projection for 50 bps of rate cuts in 2025 and 2026; takes up inflation forecasts, cuts growth.

- (US) Fed slows QT (balance-sheet runoff) program to $5B from $25B per month; leaves MBS at $35B/month.

- (US) Fed Chair Powell: Recent indications point to moderation in consumer spending; Inflation remains somewhat elevated; Uncertainty is unusually elevated; Inflation expectations have recently moved up, with tariffs as a driving factor; - post rate-decision press conference.

- (US) Fed Chair Powell: Will be very difficult to have precise assessment of how much inflation is coming from tariffs and from other sources - Q&A.

Europe

- (EU) Euro Zone Feb final CPI Y/Y: 2.3% V 2.4%E; CPI CORE Y/Y: 2.6% V 2.6%E.

- (EU) Euro Zone Q4 Labour Costs Y/Y: 3.7% v 4.5% prior.

- (RU) Russia Govt Spokesperson Peskov: Exact dates and format for next contacts with US will be agreed today and tomorrow; Putin and Trump did not discuss peacekeepers; Putin and Trump trust each other.

- (PT) Portugal Feb PPI M/M: +0.3% v -1.4% prior; Y/Y: -0.4% v -0.3% prior.

- (EU) ECB Governing Council alternate member Demarco: If nothing changes, rate cut in April is the default option.

- (EU) ECB's De Guindos (Spain): Defense spending increases are first priority, but must have budget stability; Inflation is on the right track.

- (FR) ECB’s Villeroy (France): We'll be at 2% inflation target in coming year; reiterates timing and size of ECB rate cuts depends on data.

- EU Commission sends preliminary findings to Alphabet under the Digital Markets Act.

Levels as of 00:20 ET

- Nikkei 225 closed, ASX 200 +1.1%, Hang Seng -1.1%; Shanghai Composite -0.1%; Kospi +0.9%.

- Equity S&P500 Futures +0.5%; Nasdaq100 +0.6%; Dax -0.3%; FTSE100 +0.1%.

- EUR 1.0894-1.0918; JPY 148.18-148.88; AUD 0.6329-0.6364; NZD 0.5787-0.5828.

- Gold +0.6% at $3,058/oz; Crude Oil +0.6% at $67.28/brl; Copper +0.1% at $5.1288/lb.