|
RBA hiking again later this morning, Powell testimony later today
|
|
Global Macro and Markets
- Global Markets: US stocks ran out of steam on Monday after two days of gains. The S&P 500 did manage to finish up from the previous day’s close, but only just, and was headed downwards for most of the session after opening higher. The NASDAQ finished slightly lower. There was a somewhat similar picture from Chinese stocks. The CSI 300 dropped 0.52%, maybe a little disappointed with the Two Sessions' 5.0% grow targets and the absence of big stimulus programmes. The Hang Seng Index was fractionally up on the previous day. US Treasury yields were 3bp higher yesterday, but the 10Y lost 0.6bp to settle at 3.958%, though dropped below 3.90% at one stage and rose to almost 3.99% too, so plenty of intra-day action. EURUSD rose in late trading and is looking to threaten 1.07, though is currently just under that level at 1.0682. But ahead of this morning’s RBA decision (see more below), the AUD looks tired, dropping to 0.6731. The GBP is fairly steady at 1.2026, as is the JPY at 135.94. Asian FX moves yesterday were dominated by CNY weakness, the CNH lost 0.8% on the day and is now at 6.9510.
- G-7 Macro: It was a quiet day in the G-7 as far as macro releases are concerned, and it remains very quiet today. German factory orders and wholesale inventories from the US are the only releases of note aside from Japanese cash earnings, which are already released and registering a disappointing 0.8%YoY gain that will encourage new Governor Ueda to leave policy in supportive mode. We do, however, get Fed Chair Jerome Powell, who testifies to the Senate Banking Committee today, which could add a bit of spice to markets. There has been plenty to note in ECB space too, with the hawks and doves pushing for dominance. ECB Governing Council member, Holzmann yesterday suggested four more 50bp hikes this year before the peak in rates (which would come at 5% if so). Though there are plenty of more dovish views too from other members.
- Australia: The RBA meet to decide rate policy this morning, and despite some weaker-than-expected recent labour, GDP and inflation data, the consensus of forecasters is unanimous in looking for another 25bp rate hike. We can’t disagree. Inflation remains above 7% (7.4% January) and we will need to see a lot more falls in inflation before we can start talking about a pause, never mind a pivot.
- Philippines: February inflation is set for release this morning. The market consensus is at 8.9%YoY while we expect headline inflation to settle at 8.7%. Price pressures remain evident, especially in food items, and we expect high inflation to persist for the rest of the year. Elevated inflation should prompt another rate hike by the Bangko Sentral ng Pilipinas (BSP) but recent comments from Governor Medalla suggest only a 25bps rate hike at the 23 March meeting.
- China: Exports in February will probably fall about 10%YoY while imports should fall less (we expect a 4%YoY contraction). Imports will be mainly supported by domestic demand but exports will continue to face headwinds from the demand-sapping impact of high inflation in external markets.
- Taiwan: Taiwan’s exports will continue to fall at about a 15-20% YoY pace due to the falling demand for semiconductors. We do not expect a recovery of Taiwan’s trade in 1H23 as global economies are weakening in general and the China recovery is not enough to fill the gap.
Read next: In crude oil, we are increasingly likely to see a year of two distinctive halves| FXMAG.COM
|
|
What to look out for: RBA meeting and Powell testimony
-
South Korea GDP (7 March)
-
RBA meeting and Australia trade (7 March)
-
Philippines CPI inflation (7 March)
-
Thailand CPI inflation (7 March)
-
Taiwan trade and CPI inflation (7 March)
-
China trade balance (7 March)
-
Fed’s Powell speaks (7 March)
-
Japan trade balance (8 March)
-
US trade balance and ADP employment (8 March)
-
Fed’s Powell speaks (8 March)
-
Japan GDP (9 March)
-
China CPI inflation (9 March)
-
Malaysia BNM policy meeting (9 March)
-
US initial jobless claims (9 March)
-
Fed’s Barr speaks (9 March)
-
Japan PPI inflation (10 March)
-
US NFP (10 March)
|
|
| Read this article on THINK |
Tags
Emerging Markets Asia Pacific Asia Markets
Disclaimer
This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
