OIL: Crude Range Trading Ahead Of US Tariff Announcement

RBA-dated OIS pricing is flat to 3bps firmer across meetings today. 

• Nevertheless, pricing remains mixed compared to February’s pre-RBA Decision levels—meetings through July are 2-5bps firmer, while those beyond are 2-9bps softer.
• Last week, January headline CPI inflation printed slightly lower than expected at 2.5% y/y, in line with December. However, the underlying trimmed mean rose 0.1pp to 2.8%, but still below the top of the RBA’s 2-3% band. The first month of the quarter has limited updates for services inflation. The seasonally adjusted data is consistent with the RBA remaining cautious with it stating that “upside risks remain”.
• A 25bp rate cut in April is given a 9% probability, with a cumulative 57bps of easing priced by year-end (based on an effective cash rate of 4.09%). 

Figure 1: RBA-Dated OIS – Today Vs. Pre-RBA Levels

Source: MNI – Market News / Bloomberg

Authorities are expected to focus on promoting consumption and developing AI, and other emerging sectors during the upcoming “Two Sessions” this week, China Fund News reported, citing analysts. Except for the trade-in program for consumer goods, more medium- and long-term measures to boost spending are also expected, such as offering maternity allowance and supportive measures for pension and social security, said Zhu Guoqing, deputy general manager at Pengyang Fund. 

The People’s Bank of China will guide banks to support private and small business through increased lending using structural monetary policy tools, and further facilitate diversified financing channels via stocks, bonds and loans, according to a meeting held by the PBOC and four other departments. Officials needed to improve the credit enhancement system for private and small firms, accelerate the issuance of regulations on supply chain finance, and strengthen bond market product innovation, the meeting said. (Source: PBOC website)