- Asian equity markets traded mixed with the region indecisive ahead of a widely anticipated Fed rate hike this week
- China signalled stable monetary policy continuity as it chose PBoC Deputy Governor Yi Gang to be the next central bank head
- Looking ahead, today’s session sees a lack of tier 1 highlights
Asian equity markets traded mixed with the region indecisive ahead of a widely anticipated Fed rate hike this week. ASX 200 (+0.2%) finished positive as strength in energy kept the index afloat, while Nikkei 225 (-1.0%) underperformed amid a firmer JPY and as support for PM Abe’s administration slumped to 33% (Prev. 45%) in the wake of the land-sale scandal. KOSPI (-0.8%) suffered losses in its top-weighted stocks in which Samsung Electronics fell on news Apple is to develop displays to replace Samsung screens, while Hyundai Motor was hit by a stateside investigation into fatal incidents involving airbag failure which could affect a total of 425K Hyundai and Kia cars. Hang Seng (+0.1%) and Shanghai Comp. (+0.1%) were indecisive and traded choppy amid mixed property data from China, a neutral PBoC open market operation and after China signalled stable monetary policy continuity as it chose PBoC Deputy Governor Yi Gang to be the next central bank head. Finally, 10yr JGBs were flat amid an indecisive risk-tone in the region, while an unsurprising Summary of Opinions release and unchanged Rinban announcement also kept prices range-bound. As such, Japanese yields were mixed while their US counterparts were higher ahead of the FOMC in which the US 2-year yield rose to its highest since 2008.
China approved the nomination of PBoC Deputy Governor Yi Gang to be the next PBoC Governor, while China also nominated former Vice-Finance Minister Liu Kun to be the new Finance Minister and nominated Hu Chunhua and Xi economic advisor Liu He for Vice Premier positions. (Newswires) Incoming PBoC Governor Yi Gang said that China is to maintain prudent monetary policy and will continue to open up, while he added China will launch a series of opening up measures. (Newswires)
PBoC injected CNY 30bln via 7-day reverse repos and CNY 20bln via 14-day reverse repos, for a net neutral position on the day as injections equalled maturing operations. (Newswires)
PBoC set CNY mid-point at 6.3320 (Prev. 6.3340)
China House Prices (Feb) Y/Y 5.2% (Prev. 5.0%); China Property Prices rose M/M in 44 out of 70 cities (Prev. 52) and rose Y/Y in 59 out of 70 cities (Prev. 59). (Newswires)
BoJ Summary of Opinions for March 8th-9th meeting states that it is appropriate to pursue powerful monetary easing with persistence under the current guideline and that the effects of monetary easing measures will be enhanced with inflation rate increasing towards target and the potential growth rate rising going forward. There was also the opinion that additional monetary easing will be needed if there is a heightened risk that achieving the price stability target will be delayed but that fiscal policy is also required as there is not ample room for further monetary easing. (Newswires)
Irish PM Varadkar suggested optimism on reaching a conclusion regarding the Irish border issue. (Newswires)
ECB’s Weidmann said he thinks that good economy developments and inflation would permit a rapid end to bond purchases. (Newswires)
ECB’s Villeroy commented that the progress to inflation target was slower than anticipated. (Newswires)
UK Rightmove House Prices (Mar) M/M 1.5% (Prev. 0.8%). (Newswires)
UK Rightmove House Prices (Mar) Y/Y 2.1% (Prev. 1.5%)
The UK Brexit Select Committee is set to recommend that the UK should request an extension to the EU’s Article 50 process beyond March 2019. (Newswires)
According to an HIS Markit survey, household incomes are rising at near their fastest pace since the financial crisis in 2009 with some speculating this could force the BoE to lift rates again soon. (Newswires)
The UK’s BCC has raised its GDP forecast for 2018 from 1.1% to 1.4% and in 2019 from 1.3% to 1.5%. Its first forecast for 2020 is for 1.6% growth. (BBC)
As widely expected, Vladimir Putin has won the Russian Presidential election with a landslide victory. (Newswires)
The greenback remained firmer with the DXY above the 90.00 level after last Friday’s stronger than expected Industrial Production and ahead of a widely expected rate hike from the Fed. This pressured its counterparts across the board with commodity-linked currencies also kept subdued by weakness in the metals complex, while USD/HKD rose to print a fresh 33yr high. Conversely, JPY was the exception and outpaced the USD amid the indecisive risk-tone and after USD/JPY failed to hold onto the 106.00 handle.
Commodity prices were lacklustre overnight in which WTI crude futures pulled back from Friday’s gains and briefly slipped to below USD 62/bbl. Elsewhere, gold languished as the greenback remained firm ahead of the looming FOMC, while copper extended on last week’s lows alongside the indecisive risk tone and early weakness in Chinese metals prices in which Dalian iron ore futures slipped over 3% shortly after the open.
US Baker Hughes Total Rig Count (15 Mar) 990 (Prev. 984). (Newswires)
US Baker Hughes Oil Rig Count (15 Mar) 800 (Prev. 796)
US Baker Hughes Gas Rig Count (15 Mar) 189 (Prev. 188)
Russian Energy Minister Novak affirmed pledge to see OPEC production deal through to the end and reiterated that Russia is willing to extend cuts if necessary, while he added that Russia is open to discussing phase-out from the deal when appropriate. (Newswires)
Japan PM Abe reportedly asked South Korea President Moon to help set up a meeting with North Korea Leader Kim. (Dong-A)
White House said that US President Trump told South Korean President Moon that still on track to meet with North Korean Supreme Leader Kim by May. (Newswires)
UK, France and Germany have proposed new EU sanctions on Iran to aim to keep US President Trump committed to the Iranian nuclear deal, while reports added that sanctions would target individuals involved in ballistic weapons activity and war in Syria. (Newswires)
Yields were higher across the curve after the relatively strong data saw a sell-off in bonds in relatively good volume. However, volume and flows dried out at the end of the day and Treasuries meandered into the close. At the pit close. Jun T-notes settled at 120.11, down 5 ticks.
White House said US President Trump is negotiating with individual countries regarding tariffs and will continue to negotiate on exemptions through next week, while there were also reports that US government is to accept tariff exclusion requests from today. In related news, the EU published tariff lists in response to US tariffs on aluminium and steel which was said to be for stakeholder consultations and could affect EUR 6.4bln in US exports. (Newswires)
45 US trade groups urged President Donald Trump to not place tariffs on China, which they warned would harm the US economy and consumers. (Newswires)
White House lawyer Cobb stated the administration is not considering or discussing firing Special Counsel Mueller. (Newswires)