RBA rate decision was inline with the consensus, central bank affirmed tightening basis

Asia Market Update: RBA rate decision was inline with the consensus, Central Bank affirmed tightening basis, slightly revised statement; AUD declines, Aussie bond yields remained down; Focus now shifts to the RBNZ decision [Apr 5th], RBA Gov to also speak on Wed.

General trend

- Asia trading was very quiet in the morning sessions after US stocks were mixed overnight as the OPEC+ production cut was digested alongside soft US ISM figures (46.3, the lowest since May 2020).

- US Treasury yields and stocks were mostly flat up through 12:30am EST (14:30 Australian time) in anticipation of the Australia RBA rate decision, with almost unanimous opinion that the RBA would hold rates steady.

- US equity FUTs down slightly through the morning.

- Note that the Hong Kong and Shanghai markets will be closed for a holiday tomorrow (Wednesday).

- Fast Retailing [largest Nikkei component] to issue monthly sales after the Tokyo close.

Headlines/economic data

Australia/New Zealand

- (AU) ASX 200 opens -0.1% at 7,212.

- (AU) Australia Attorney General: Australia to ban Tiktok app on Govt dept and agency devices.

- (AU) Australia Roy Morgan Weekly Consumer Confidence +1.6pts.

- (AU) ACCC [Australia competition regulator]: Gas shortfall in 2023 less likely as gas supply outlook improves.

- (AU) Australia, UK sign new Statement of Intent on critical minerals.

- (CN) China Vice Commerce Minister Wong Shouwen meets Australia Dept of Foreign Affairs Official & Trade Deputy Secretary in China.

- (NZ) New Zealand Q1 NZIER Business Confidence: -66% v -70% prior.

- (NZ) New Zealand 8-month Budget Deficit (NZ$): 3.21B.

China/Hong Kong

- (HK) Hang Seng opens -0.2% at 20,364.

- (HK) Hong Kong Monetary Authority (HKMA) purchased HK$7.1B to defend its USD/HKD peg.

- (CN) Shanghai Composite opens flat at 3,297.

- (CN) China PBOC Open Market Operation (OMO): Sells CNY2.0B v CNY2.0B prior in 7-day reverse repos: Net drain CNY276B v drain CNY253B prior.

- (CN) China PBOC sets Yuan reference rate: 6.8699 v 6.8805 prior.

- (CN) Asia Development Bank (ADB): Raises China 2023 GDP growth forecast to 5.0% from 4.3% in Dec; sees 2024 GDP growth at 4.5%.

- (CN) China warns top bankers of further crackdowns on corruption - China press.

- (CN) China Mar New Yuan Loans expected to rise y/y [inline]- China Securities Journal.

- Evergrande Property says it signed restructuring agreement with key group of offshore creditors [ad-hoc group] –update.

Japan

- (JP) Nikkei 225 opens +0.1% at 28,213.

- (JP) Japan Mar Monetary Base Y/Y: -1.0% v -1.6% prior.

- (JP) Japan PM Kishida: To renew Japan's basic strategy for hydrogen by around end of May.

- (JP) Bank of Japan (BOJ) offers to buy 5-10 year JGBs at fixed rate of 50bps; Opens window to buy unlimited amount of 10-year JGBs at 0.50% [as expected].

- (JP) Japan Chief Cabinet Secretary Matsuno: Guidelines on human rights for Govt contracts have been drawn up.

- (JP) Former Japan FX Chief Nakao: Reiterates BOJ should review Yield Curve Control under new Governor Ueda.

South Korea

- (KR) Kospi opens +0.1% at 2,475.

- (KR) SOUTH KOREA MAR CPI M/M: 0.2% V 0.2%E; Y/Y: 4.2% V 4.3%E (slowest rise Y/Y since Mar 2022).

- (KR) Bank of Korea: Core inflation will fall by slower pace than headline inflation.

Other Asia

- (CN) China Consulate General in Los Angeles Spokesperson: Reiterates US House Speaker McCarthy-Tsai meeting is not conducive to regional peace, security and stability.

- (MY) Malaysia PM: Stressed to China that Petronas project in the South China Sea is within Malaysia’s territory.

- (SG) Singapore Mar Purchasing Managers Index (PMI): 49.9 v 50.0 prior.

- (CN) China, Philippines to hold "preparatory" oil talks in May – DFA.

- (TH) Thailand Mar Business Sentiment Index: 52.9 v 50.6 prior.

North America

- (US) Treasury Sec Yellen: OPEC+ cuts very unconstructive act; US banking system stabilizing but watching very closely.

- (US) Fed’s Bullard (Non-Voter): Need rates >5%; My forecast is above median; Open question if OPEC+ move will have a lasting impact - TV interview.

- (US) MAR ISM MANUFACTURING: 46.3 V 47.5E (lowest since May 2020); PRICES PAID: 49.2 V 51.1E.

- (US) FEB CONSTRUCTION SPENDING M/M: -0.1% V 0.0%E.

- (US) MAR FINAL S&P/MARKIT MANUFACTURING PMI: 49.2 V 49.3E (6th straight month of contraction).

Europe

- (UK) MAR FINAL MANUFACTURING PMI: 47.9 V 48.0E (confirms the 8th straight contraction).

- (EU) EURO ZONE MAR FINAL MANUFACTURING PMI: 47.3 V 47.1E (confirms 9th straight contraction and lowest print since Nov 2022).

- (DE) GERMANY MAR FINAL MANUFACTURING PMI: 44.7 V 44.4E (confirms 9th straight contraction).

- (FI) Finland confirms to officially join NATO on Apr 4th [**Note: would imply NATO's border length with Russia to roughly double].

- (EU) ECB's Holzmann (Austria): 50 bps hike is still in play at the May meeting.

Levels as of 01:20 ET

- Nikkei 225, +0.3%, ASX 200 +0.2% , Hang Seng -1.0%; Shanghai Composite +0.3% ; Kospi +0.5%.

- Equity S&P500 Futures flat; Nasdaq100 -0.2%; Dax +0.4%; FTSE100 +0.5%.

- EUR 1.0888 - 1.0910 ; JPY 132.18 - 132.95 ; AUD 0.6758 - 0.6794 ; NZD 0.6291 - 0.6310.

- Gold -0.2% at $1997/oz; Crude Oil +0.5% at $80.80/brl; Copper -0.6 at $4.0293/lb.