Asia Morning Bites - 21.03.2023

Global Macro and Markets

• Global Markets: After the sea of red in Asian equity markets on Monday, it is quite a surprise to wake this morning to see that both European and US equities finished up on the day, though European stocks got off to a very shaky start before recovering. Even Swiss indices managed small gains. In contrast, the Heng Seng index fell 2.65% on the day, while the CSI 300 registered a smaller 0.5% fall. US Treasuries seem to be calming down a bit too  - the 2Y Treasury yield only rose 13.9bp yesterday (still seems odd to preface that with “only”), though it was down almost 20bp at one point. 10Y Treasury yields were up 5.6bp to 3.485%. It is tempting to conjecture that some sort of base is being formed around these levels, but the unpredictability of data from the financial system makes this impossible to do. Slightly improved risk sentiment trumped higher US Treasury yields and the USD slid against the EUR, and EURUSD rose to 1.0720. The AUD hasn’t really followed, sitting at 0.6716, though Cable had a good day, rising to 1.2276, as did the JPY, which has made its way down to 131.30. Other Asian FX was a mixed bag yesterday. The SGD hugged the JPY’s gains, along with the THB and ahead of the CNH. But the KRW struggled again, dropping 0.59%.
• G-7 Macro: Apart from the Credit Suisse takeover news, there wasn’t much on the macro calendar yesterday. President Xi is meeting with Russia’s President Putin, and there seems to be some talk of a peace plan for the war in Ukraine, though it is not clear if this is a realistic suggestion at this stage. It is very quiet too on the G-7 calendar today. Germany’s ZEW survey tops the billing in the Eurozone, while February existing home sales is about the only real interest out of the US. 
• Australia: The RBA releases minutes of the March policy meeting this morning. With mixed messages recently, this might be worth a hard look, though it mostly predates SVB and subsequent financial market turmoil, so it is not clear how useful they will be.

Read next: Polish data points to first quarter GDP contraction and sizable price pressures| FXMAG.COM

What to look out for: US FOMC

• South Korea advance trade balance (21 March)

• Australia RBA minutes (21 March)

• US existing home sales (21 March)

• Australia Westpac leading index (22 March)

• US FOMC meeting (23 March)

• Singapore CPI inflation (23 March)

• Taiwan industrial production (23 March)

• Philippines BSP policy meeting (23 March)

• Taiwan CBC policy meeting (23 March)

• Hong Kong CPI inflation (23 March)

• US initial jobless claims and new home sales (23 March)

• Japan CPI inflation and Jibun PMI (24 March)

• Malaysia CPI inflation (24 March)

• Singapore industrial production (24 March)

• US durable goods orders (24 March)