ECB: Easings Expected At April & June Meetings

Oil prices have continued rising during today’s APAC session driven by reduced excess supply expectations. WTI is 0.7% higher at $66.72/bbl after falling to $66.49 before rising to $66.84. Brent is up 0.7% to $70.03/bbl after an intraday low of $69.79 and a high of $70.13. The USD index is up 0.2%.

• OPEC’s March monthly report is published today with the IEA’s on Thursday. OPEC’s forecasts tend to be more optimistic. On Tuesday, the US’ EIA revised down its global excess supply expectations for both 2025 and 2026 due to the projected impact of tighter sanctions and enforcement on Iran and Venezuela.
• The supply outlook remains highly uncertain though with it still unclear if Iran and Venezuela will find ways to evade sanctions and if there will be an easing of restrictions on Russia. The US administration is also planning to increase US production, while higher tariffs have raised uncertainty around global demand substantially.
• The US 30-day ceasefire proposal will now be presented to Russia following Ukraine’s readiness to agree but Russia has said that it will only approve it on its own terms and not the US’. If it refuses, President Trump has threatened more sanctions and also tariffs on the country.
• Bloomberg reported that US crude inventories rose 4.2mn barrels last week after a drawdown the previous week, according to people familiar with the API data. Gasoline stocks were down 4.6mn while distillate rose 400k. The official EIA data is out later today.
• US CPI for February is out later (see MNI CPI Preview) and forecast to show a 0.1pp moderation in headline and core to 2.9% y/y and 3.2% y/y respectively. February budget and real earnings data are also released. The BoC decision is announced and it is forecast to cut rates 25bp. The ECB’s Lagarde and Lane speak. 

A number of headlines have filtered out today on pledged wage rises from major Japanese firms for 2025. Some companies have met lofty demand, while others have come in a little below demands. See below for more details. 

• This is a key watch point for the authorities and the BoJ, as it seeks to durably achieve the 2% inflation target. As noted yesterday, consumption spending has not been a strong point for the economy in recent months. Positive real wage growth is a key in terms of aiding the recovery in spending. Hence these developments will be an on-going watch point for markets.
• Here are some of the key companies that have crossed so far today: "TOYOTA RESPONDS IN FULL TO UNION'S TOTAL WAGE HIKE DEMAND, COMPANY SAYS - [RTRS]"
• "NEC AGREES TO UNION'S WAGE HIKE DEMAND FOR 2025 IN FULL - [RTRS]",
• "NISSAN AGREES TO 16,500 YEN AVERAGE MONTHLY WAGE HIKE VS UNION DEMAND OF 18,000 YEN FOR 2025 - [RTRS]",
• "MITSUBISHI ELECTRIC AGREES TO 15,000 YEN AVERAGE MONTHLY WAGE HIKE VS UNION DEMAND OF 17,000 YEN FOR 2025 - [RTRS]",
• "NIPPON STEEL AGREES TO 12,000 YEN AVERAGE MONTHLY WAGE HIKE VS UNION DEMAND OF 15,000 YEN FOR 2025 - [RTRS]"
• "HITACHI AGREES TO 17,000 YEN AVERAGE MONTHLY WAGE HIKE VS UNION DEMAND OF 17,000 YEN FOR 2025 - [RTRS]"
• "PANASONIC AGREES TO 13,000 YEN AVERAGE MONTHLY WAGE HIKE VS UNION DEMAND OF 17,000 YEN FOR 2025 - [RTRS]"
• The largest union, Rengo, is seeking an average hike of near 6.1%, after last year's 5.85% increase.
• Rtrs adds: "Much of the focus on this year's "shunto" talks is whether there will also be strong pay gains at small and medium-sized firms which employ around 70% of Japan's workforce." See this link for more details.