Quiet day in Asia with mixed equities after volatile prior week

Asia market update: Quiet day in Asia with mixed equities after volatile prior week; CNH reverses on stronger Yuan fix & FX intervention; China blocks AMD & Intel chips for govt use; Foreign CEOs meet CCP leaders in Beijing.

General trend

- Markets were quiet with mixed equities after last week's volatility. After gaining 5.5% last week the Nikkei took a breather today.

- Today’s PBOC Yuan fix back in the 7.09 range put the lid on anticipation (for the moment) that the PBOC was perhaps now willing to let the Yuan weaken after the mini-collapse last Friday following a weaker fix of over 7.10. State-bank FX intervention also seen again as Offshore Yuan retraced 75% of its Friday losses.

- AMD and Intel chips banned for China govt usage over the weekend.

- Japan’s Monetary Policy Meeting Minutes from January (two meetings ago) uncovered nothing not already known since the BOJ finally decided to raise rates at the March meeting last week.

- Japan's currency chief Kanda resurfaced to warn about a low yen and potential resulting 'action' as JPY stayed in the 151 handle vs USD.

- Kiwi dollar fell to below 60c, to a four-month low of $0.5997.

- US equity FUTs slightly lower during Asian trading.

Looking ahead (Asian time zone)

- Mon Mar 25th (Mon eve ECB Pres Lagarde speech).

- Tue Mar 26th AU Consumer Conf (Tue eve DE Consumer Conf).

- Wed Mar 27th AU Feb CPI.

- Thu Mar 28th JP BOJ Mar meeting SOMP, AU Retail Sales, (Thu night US Final Q4 GDP).

- Fri May 29th JP Feb Industrial Production & Retail Sales (Fri night US Feb Core PCE & Fed’s Powell speech).

Holidays in Asia this week

- Mon Mar 25th India.

- Thu Mar 28th Malaysia, Philippines.

- Fri Mar 29th (Good Friday) Australia, Hong Kong, India, Indonesia, New Zealand, Philippines, Singapore.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.1% at 7,775.

- Australian govt to recommend minimum wage in line with inflation – financial press.

- Australia Treasurer Chalmers should maintain power to override RBA rate decisions; cites recommendation from the Coalition and Greens – AFR [update].

- Australia AOFM launches tap of Aug 2035 Treasury Indexed Bond.

- New Zealand Fin Min Willis: Committed to fiscally neutral tax reduction.

China/Hong Kong

- Hang Seng opens +0.2% at 16,531.

- Shanghai Composite opens -0.3% at 3,040.

- China major state-owned banks seen selling dollars for Yuan in onshore FX market to stabilise Chinese currency - financial press.

- BYD 211.HK Lowers starting price of new Seal EV Sedan to CNY179,800.

- China Industry Min: China will accelerate new industrialization, promote continuous optimization and upgrade industrial supply chains - Chinese press.

- China Vice Commerce Min: Reiterates will further expand high-level opening up; to continue to tap and unleash potential of domestic demand.

- Evergrande (3333.HK) Liquidators of co. announce withdrawal of Chapter 15 application in US court; now plan to make new applications under Chapter 15 of title 11 of the US bankruptcy code - update.

- China Commerce Minister Wang Wentao meets with top execs of AMD, Micron, Exxon-Mobil, Medtronic - China Commerce Ministry.

- Apple CEO Tim Cook: Vision Pro headset to enter the mainland China market during 2024 - Chinese state media.

- (CN) CHINA REPORTEDLY BLOCKS USE OF INTEL AND AMD CHIPS IN GOVERNMENT COMPUTERS - FT.

- China Fin Min: Chinese govt is confident and capable of achieving full year economic development goals - Chinese press.

- BYD (1211.HK) (CN) TTN Research Alert Follow up: BYD's New Seagull model threatens other EV carmakers with sub-$10,000 price.

- IMF Managing Director: China faces a fork in the road; Rely on policies that have worked in the past or reinvent itself for a new era of high-quality growth - financial press.

- China State Planner (NDRC) Chief: To implement a batch of major scientific-technology projects based on development of 'new productive forces' - China press.

- China Premier Li Qiang: China to issue new rules on market access, cross-border data flows - meeting with global CEOs in Beijing.

- US Treasury Sec Yellen to visit China again in April - US Press.

- Sinopec (386.HK) Reports FY23 (CNY) Net 60.4B v 57.2B y/y, Op 86.8B, +14.5% y/y, Rev 3.21T v 3.32T y/y (Guides FY24 Capex 173B v 176.8B y/y).

- China Cabinet (State Council) reiterates to further optimize property policy; To increase supply of high quality homes - comments from meeting to prevent local debt risk [weekend update].

- China Financial Regulator (NFRA) Draft Security Rule: Plan to ask banks and insurers to set up data security [weekend update].

- China Securities Regulator (CSRC) Vice Chair Fang: Seeking more long-term investment into equity VC funds [weekend update].

- China Financial Regulator (NFRA): Plans to revise syndicated loan management measures [weekend update].

- TSLA reportedly cuts production of both model 3 and model y in China amid slower EV growth – Press [weekend update].

- China PBOC sets Yuan reference rate: 7.0996 v 7.1004 prior.

- USD/CNY CNH rises on stronger CNY fix.

- China PBOC Open Market Operation (OMO): Sells CNY50B in 7-day reverse repos; Net injects CNY40B v drains CNY11B prior.

Japan

- Nikkei 225 opens -0.2% at 40,798.

- Japan Jan Final Leading Index CI: 109.5 v 109.9 prelim; Coincident Index: 112.1 v 110.2 prelim.

- Bank of Japan Jan MPM Minutes [2 meetings ago]: Reiterated that the achievement of hitting the 2% price goals was in sight.

- Japan Chief Cabinet Sec Hayashi: Confirms that Japan is discussing with US to strengthen joint military cooperation for a Joint Command Structure in Japan, but nothing decided yet - Japanese press.

- Japan Currency Chief Kanda: Recent FX moves are not reflecting the fundamentals – Japanese press.

- Japan sells ¥499.1B v ¥500B indicated in 2-yr, 5-yr, 10-yr and 20-yr JGB's in liquidity enhancement auction: Avge accepted spread -0.019% v +0.009% prior , bid-to-cover: 3.70x v 4.45x (Jan 4th).

- Japan Cabinet Office (Govt) Mar Monthly Report: Maintains overall economic assessment of seeing a gradual economic recovery despite some sluggishness [weekend update].

- Japan's Rengo Union (largest trade union) FY24 Wage Talks: 2nd round 5.25% v 5.28% in 1st round [weekend update].

South Korea

- Kospi opens +0.3% at 2,756.

- South Korea considers cutting duty-free limit on overseas purchases; the move said to be an attempt to counter issues linked to e-commerce firms in China – South Korea press.

Other Asia

- Singapore Feb CPI M/M: +1.0% v -0.7% prior; Y/Y: 3.4% v 3.2%e.

- Malaysia Feb CPI Y/Y: 1.8% v 1.5%e (6th month below target range).

- Taiwan Stats Bureau to raise 2024 CPI forecast to 2.03%.

- (TW) Further circulation Taiwan will raise power prices by avg 11% and by 15-25% for some factories – press [weekend update].

- Thailand Finance Ministry: Monetary easing will not exacerbate household debt [weekend update].

- Thailand PM Srettha: Will use fiscal budget to boost economy [weekend update].

North America

- (US) Fed’s Bostic (dove, voter): Now expects just 1 rate cut in 2024; Less confident on inflation than I was in Dec - update from Mar 22nd [weekend update].

- TTN Research Alert: What does the Fed usually do during elections years? Outside 2008 and 2020 US elections, the Fed never cut rates during any election year this century if there were no global economic shocks and major recessions [weekend update].

- (US) US House passes $1.2T govt funding package; Senate expected to vote later today [weekend update].

Europe

- (DE) Germany Mar IFO business climate: 87.8 V 85.9E (highest since June 2023) [weekend update].

- ECB's Nagel (Germany, hawk): Probability is increasing that we will cut rates before summer break [**Note: likely referring to the period between mid-July and mid-Sept meetings].

- (RU) Several gunmen in combat fatigues fired shots at a crowd at Moscow area concert hall; Dozens of dead and wounded reported [weekend update].

- (UK) BOE Gov Bailey reiterates view that rate cuts 'in play' at all future meetings; Do not need to see inflation to drop to 2% target in order to start cuts; Declines to say when or by how much interest rates might be cut this year – FT [weekend update].

Levels as of 00:20 ET

- Nikkei 225 -0.5%, ASX 200 +0.6%, Hang Seng +0.5%; Shanghai Composite +0.4%; Kospi -0.7%.

- Equity S&P500 Futures: flat; Nasdaq100 -0.1%, Dax flat; FTSE100 flat.

- EUR 1.0802-1.0823; JPY 151.05-151.46; AUD 0.6510-0.6544; NZD 0.5986-0.6013.

- Gold +0.5% at $2,171/oz; Crude Oil +0.6% at $81.16/brl; Copper +0.8% at $4.0335lb.