EM ASIA CREDIT: AMMB Holdings Berhad (AMMMK, A3/BBB+/BBB-) solid 9m results

December SEEK job ads fell 2.1% m/m to be down 21.9% y/y after rising 1.0% m/m but down 21.4% y/y. Q4 ads were 2.7% q/q lower than Q3 suggesting that Q4 employment data released on February 5 are likely to be weak again. While there are tentative signs that the NZ economy is turning, it remains very weak and another 50bp of easing on February 19 appears likely.

NZ SEEK new job ads 2013=100

• Applicants-per-job fell for only the second time in 2024. The ratio was down 1.8% m/m in November but still up 31.9% y/y after rising 2.6% m/m and 48.2% y/y in November. 

NZ applicants per ad 2013=100

Source: MNI - Market News/SEEK

• The drop in vacancies was broad-based across regions with only one recording a rise.
• Bucking the overall trend, the three largest sectors by hiring volume posted increases in job ads in December with trades & services up 3%, manufacturing & transport +5% and ICT +6%. Healthcare and consumer products drop the decline in the total.
• SEEK notes that “hiring and applications do tend to pick up in the early months of a new year, as hirers and candidates start thinking about the future – so, January and February will be ones to watch”.

JGB futures are stronger, +8 compared to settlement levels, but well off session bests.

• Today’s move was all about US tsys. Cash US tsys are 6-10bps richer in today’s Asia-Pacific session, with a flattening bias, following yesterday’s holiday. The session has been marked by volatility, driven by reports that Trump suggested tariffs on Canada and Mexico might take effect on February 1. While gains were briefly pared, US tsys have since rebounded, trading near session bests.
• Today’s local calendar was empty apart from 40-year supply.
• Cash JGBs are 1-3bps richer across benchmarks, with the 40-year leading. The benchmark 10-year yield is 0.9bps lower at 1.191% versus the cycle high of 1.262%.
• The issuance of 40-year bonds today was met with strong demand, with the actual high yield coming in notably below dealer expectations. According to a Bloomberg poll, the anticipated yield was 2.60%, compared to the realized yield of 2.57%. The auction’s cover ratio also improved, rising to 2.7518x from 2.2364x in the previous outing.
• Swap rates are slightly higher. Swap spreads are wider.
• Tomorrow, the local calendar will see BoJ Rinban Operations covering 1-25-year JGBs.
• BoJ Policy Decision on Friday.

The USD surged on Trump tariff headlines. From just under 1300, the BBDXY index got above 1310, a +0.80% trough to peak move. We sit lower now, last around 1305.35, around +0.30% firmer versus end NY levels from Monday. 

• The USD started on the backfoot, amid carry over from the US Monday session, with news sources indicating that there would be no Day 1 tariff announcements. However, an impromptu press conference in the oval office (as Trump signed executive orders) saw the USD Rally, as Trump stated Mexico and Canada would likely be hit with 25% tariffs from Feb 1 (which is only a few weeks away).
• Not surprisingly, CAD and MXN saw the brunt of USD demand. Both currencies slumped more than 1%. USD/CAD reached 1.4516, fresh highs back to 2020. USD/MXN rose to 20.7987, just short of recent highs. Both currencies are now away from lows against the USD. USD/CAD last near 1.4420.
• Further Trump headlines stated he hasn't made a decision on universal tariffs. This, coupled with lower US yields, which have fallen today by over 9bps for the belly of the curve, has curbed USD buying interest.
• The US yield move is interesting in the context that tariffs should be seen as inflationary. It may suggest Tsy yields were already primed for such tariff announcements/threats, like those Trump made today. The 25% hike for Mexico and Canada were mentioned in 2024 after Trump won the election.
• USD/JPY is lower, aided by the USJP yield differential dip. We got to lows of 154.78, but sit slightly higher in latest dealings (last 155.00/05). Yen is still 0.40% stronger versus the USD, the only G10 currency higher against the USD so far today. Focus will be on whether we can sustain a downside break under the 50-day EMA, which is just under 155.00.
• AUD and NZD both fell as the tariff headlines crossed. However, we sit away lows, AUD/USD last 0.6250, NZD/USD around 0.5655.
• Later US January Philly Fed non-manufacturing, UK labour market, euro area/German ZEW and Canada’s December CPI data are released.