CHINA-EU: China/HK Equities Lower, Consumer Trade In Details Released
Jan-08 03:12
China and Hong Kong equities are tracking lower as headlines come out around the consumer trade in program. The HSI and CSI were last off around 1%. The HSI has now traded at fresh YTD lows.
- The program will expand in scope from 8 to 12 categories in terms of home appliance trade ins. The subsidy will be raised to 20% of the trade in price. So far this year, 81bn yuan has been allocated to the program.
- Details are also filtering out around support for equipment upgrades at smaller firms, while 100nb yuan in loans will be available for smaller tech firms.
- Consumer related indices are also tracking lower on the CSI 300. At this stage the details are probably not seen as enough to shift the broader macro needle for China.
- We await tomorrow's inflation data, while next PBoC easing steps are also awaiting. Timing of this remains uncertain, particularly given weaker yuan levels in the lead up to Trump's inauguration. USD/CNH was last near 7.3450. Onshore bond yields are also relatively steady, the 10yr still under 1.60% at this stage.
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AUSSIE BONDS: Narrow Ranges On A Data-Light Session Ahead Of RBA Decision Tomorr
Dec-09 02:51
ACGBs (YM +2.0 & XM +2.0) are holding stronger after dealing in narrow ranges on a data-light Sydney session.
- The domestic focus of this week will be tomorrow’s RBA decision and Thursday’s November jobs data after October disappointed. The cash rate is unanimously forecast to remain at 4.35% and so the guidance will be monitored closely for any changes. The RBA meeting will be followed by Governor Bullock’s press conference.
- Bloomberg consensus is again forecasting a 25k increase in employment in November with the unemployment rate rising 0.1pp to 4.2%. The RBA is projecting it to rise to 4.3% in Q4 2024.
- Cash US tsys are ~1bp richer in today’s Asia-Pac session after Friday’s modest post-payrolls gains. Reminder, the Federal Reserve entered its self-imposed blackout at midnight Friday through December 19. The focus is this week's CPI and PPI inflation data on Wednesday and Thursday respectively.
- Cash ACGBs are 2-3bps richer with the AU-US 10-year yield differential at +6bps.
- Swap rates are 2-3bps lower.
- The bills strip has bull-flattened, with pricing flat to +4.
- RBA-dated OIS pricing is 1-4bps softer across 2025 meetings. A 25bp rate cut is 95% priced for April. The market attaches a 9% chance of a 25bps cut tomorrow.
MNI EXCLUSIVE: Reaction To Australia's Poor Productivity
Dec-09 02:47
Former RBA staffers react to last week's poor productivity growth data.
On MNI Policy MainWire now, for more details please contact sales@marketnews.com
JGBS: Richer At Lunch Despite Q3 GDP’s Upward Revision
Dec-09 02:43
At the Tokyo lunch break, JGB futures are stronger and near session highs, +23 compared to the settlement levels.
- This comes despite news that Japan’s economy grew at a faster pace than initially estimated. Japan’s gross domestic product grew at an annualised pace of 1.2% in the three months through September from the previous quarter.
- BOJ Governor Kazuo Ueda is expected to closely examine economic data including its Tankan survey on Dec. 13 before the central bank’s Dec. 19 policy decision. Most economists surveyed last month foresaw an interest rate hike by January, while Ueda said in a recent interview with the Nikkei newspaper that the timing for a hike is “nearing,” fueling speculation that the bank may increase rates this month. (per BBG)
- Cash US tsys are ~1bp richer in today’s Asia-Pac session after Friday’s modest post-payrolls gains. Reminder, the Federal Reserve entered its self-imposed blackout at midnight Friday through December 19. The focus is this week's CPI and PPI inflation data on Wednesday and Thursday respectively.
- Cash JGBs are 1-2bps richer across benchmarks. The benchmark 10-year yield is 1.5bps lower at 1.045% versus the cycle high of 1.108%.
- Swap rates are 1-3bps lower out to the 10-year and 2bps higher in the 20-30-year zone. Swap spreads are mixed.
