RBA minutes balance rising property prices and slower wage growth

Asia Mid-Session Market Update: RBA minutes balance rising property prices and slower wage growth; Strong performance by Macron in France debates lifts EUR

US Session Highlights

- (US) Fed's Kashkari (dove, dissenting vote): job market showing more signs of slack and we are still short on inflation; The economy is growing more slowly than we would like - CNBC interview

- (US) Fed's Evans (dove, voter): Three rate hikes in 2017 is possible; could be more or less - Fox Business interview

- (US) Fed's Harker (hawk, FOMC voter): Would not rule out more than three rate hikes this year; all meetings are live for rate decisions; Would like to get well north of 1% rates before halting bond reinvestments, maybe close to 1.5% - CNBC interview

- (US) House Intel Chair Nunes: there was not a wiretap of Trump Tower; it is possible there was other surveillance against Trump and his aides - hearings on Russia interference in elections

- (US) FBI Director Comey: confirms that FBI is investigating Russian govt efforts to interfere in election, including potential links between Trump campaign and Russia - press

US markets on close: Dow flat, S&P500 -0.2%, Nasdaq flat

- Best Sector in S&P500: Materials

- Worst Sector in S&P500: Financials

- Biggest gainers: CF +3.8%, NVDA +3.2%, CAT +2.7%, BHI +2.5%, IFF +2.5%

- Biggest losers: KSS -4.8%, FSLR -4.7%, M -3.8%, JWN -3.1%, GPS -2.7%

- At the close: VIX 11.3 (+0.1 pts); Treasuries: 2-yr 1.30% (flat), 10-yr 2.47% (-3bps), 30-yr 3.09% (-2bps)

US movers afterhours

- FSM: Announces possible delay in filing its annual financial results; -2.5% afterhours

- GEL: Offering 4M Common Units (3.4% of outstanding); -5.7% afterhours

Politics

- (FR) France Elabe poll: Macron was most convincing in presidential debate; Melenchon 2nd; Le Pen and Fillon tied for 3rd

- (US) Pres Trump: Preparing executive order to put coal miners back to work; Working to remove regulations in auto industry

Asia Key economic data:

- (AU) AUSTRALIA Q4 HOUSE PRICE INDEX Q/Q: 4.1% (biggest increase in 5 years) V 2.5%E; Y/Y: 7.7% V 6.3%E

- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 112.0 v 113.1 prior

- (NZ) NEW ZEALAND FEB CREDIT CARD SPENDING M/M: -1.4% V 0.4% PRIOR; Y/Y: 5.3% V 7.1% PRIOR

- (NZ) New Zealand Feb Net Migration: 6.0K v 6.4K prior (6-month low)

Asia Session Notable Observations, Speakers and Press

- Asian equity markets traded mixed and mostly in narrow ranges, tracking another flattish day on Wall St. Bullish sentiment has been tempered by uncertainty regarding Pres Trump's pro-business tax agenda as the cabinet continues to wrestle with Congressional inquiry into Russia election ties as well as negotiation on Obamacare repeal legislation that needs to get passed before tax reform can begin. Modest safehaven bid of US Treasuries continued on Monday as yield curve flattened and financials struggled.

- In Asian hours, futures are pointing to more optimism attributed to initial response from Elabe poll in France that showed Macron as the most credible candidate in today's debate, potentially defusing concerns of a populist revolt propelling Le Pen to a surprise victory in May. EUR/USD bounced on the poll release, rising some 50pips to 1.0770, while USD/JPY reversed some of the early pressure to rise over 40pips above 112.70.

- Outside of the political risks, the absence of meaningful economic data has otherwise contributed to a fairly lackluster session. Release of RBA March meeting minutes produced a brief ripple in AUD with an initial 10pips rise to session highs of 0.7735 followed by steady retreat to 0.77 handle. RBA expanded on its statement with growing concern over home prices, improved global conditions, and forecast commodity prices to remain firm for longer than expected. On the other hand however, RBA was more downbeat about sustained momentum in wage inflation following latest disappointing labor data, while also maintaining focus on uncertainty in policies of China and US. Traders will look ahead to tomorrow's speech from RBA's Debelle for any more clarity, though analyst consensus of a neutral RBA over the near term is likely to be maintained.

China

- (CN) China Ministry of Commerce (MOFCOM) and National Development Reform Commission (NDRC) may announce rules this year restricting outbound investment

- (CN) China Vice Foreign Minister Zheng Zeguang: Premier Li's upcoming visit to Australia and New Zealand will send a positive message to the world that the nations are bundled with free trade

Japan

- (JP) Japan Chief Cabinet Sec Suga: Japan to actively engaged in macro and FX talks at G-20

- (JP) Japan said to mull shortening period between auction and issuance of some JGB's - financial press

Australia/New Zealand

- (AU) RBC: Today's RBA minutes erred more on the hawkish side - SMH

- (NZ) NZ Institute of Economic Research (NZIER) shadow board: RBNZ should keep interest rates at 1.75% with a tightening bias

Korea

- (KR) South Korea Acting President Hwang Need to closely monitor financial markets - press

Asian Equity Indices/Futures (00:30ET)

- Nikkei -0.3%, Hang Seng +0.2%, Shanghai Composite +0.2%, ASX200 -0.1%, Kospi +1.0%

- Equity Futures: S&P500 +0.2%; Nasdaq +0.2%; Dax +0.2%; FTSE100 +0.2%

FX ranges/Commodities/Fixed Income (00:30ET)

- EUR 1.0720-1.0770; JPY 112.30-112.80; AUD 0.7700-0.7740; NZD 0.7040-0.7065

- Apr Gold -0.5% at $1,228/oz; May Crude Oil +0.4% at $49.11/brl; May Copper -1.0% at $2.63/lb

- SPDR Gold Trust ETF daily holdings fall 3.8 tonnes to 830.3 tonnes; 3rd straight decline

- iShares Silver Trust ETF daily holdings rise to 10,342 tonnes from 10,303 tonnes prior

- (CN) PBOC SETS YUAN MID POINT AT 6.9071 V 6.8998 PRIOR; weakest Yuan setting since Mar 15th; 3rd straight weaker setting

- (CN) PBOC to inject combined CNY80B v CNY100B prior in 7,14, and 28-day reverse repos

- (KR) South Korea MoF sells 10-yr pre-issuance Govt bond at 2.2%

Asia equities/Notables/movers by sector

- Consumer discretionary: 1107.HK Modern Land China -10.0% (FY16 result); HVN.AU Harvey Norman +3.3% (denies speculation about ASIC review of reporting); TGA.AU Thorn Group -7.5% (guidance)

- Consumer staples: 1432.HK China Shengmu Organic Milk -3.8% (FY16 result)

- Financials: 1528.HK Red Star Macalline Group -6.6% (FY16 result); 1238.HK Powerlong Real Estate Holdings +5.5% (FY16 result); SPO.AU Spotless Group +48.6% (bid by Downer)

- Industrials: 3836.HK China Harmony Auto Holding -7.5% (guidance); AZJ.AU Aurizon -0.9% (UBS cuts rating); 6448.JP Brother Industries +4.2% (Goldman Sachs raises rating)

- Technology: 698.HK Tongda Group Holdings -3.1% (FY16 result); 1357.HK Meitu -10.3% (regulator requests trading records); 6502.JP Toshiba Corporation +3.2% (Westinghouse Electric bankruptcy consideration)

- Materials: 2068.HK China Aluminum International Engineering Corp +14.2% (FY16 result); 5423.JP Tokyo Steel Mfg -4.9% (maintains steel prices); NHC.AU New Hope Corporation +4.9% (H1 result)

- Energy: 2386.HK Sinopec Engineering Group Co +4.7% (JPMorgan raises rating)

- Healthcare: VRT.AU Virtus Health -3.7% (Morning star cuts rating); BKL.AU Blackmores +13.4% (China has indefinitely delayed new cross-border e-commerce laws)

- Telecom: TPM.AU TPG Telecom +5.6% (affirms guidance)