INDIA: PMIs Tick Up Again In April
Apr-23 05:47
Indian April preliminary PMIs, per HSBC, all ticked up from March levels. The manufacturing index was 59.1, from 58.5, while service rose to 58.4 versus 58.1. This left the composite index at 60.0 from 59.5 in March.
- Manufacturing is too fresh multi month highs, while services still have some way to go to get back to H1 2024 levels, which were closer to 61.0.
- These prints suggest a support domestic growth backdrop, at least at face value. This will be appealing at a time of trade uncertainty across the rest of the region. Since early April Indian equities have recovered sharply, while offshore outflow pressures have also eased.
- Sentiment is also likely to be aided by RBI efforts to support domestic liquidity and turn monetary policy more supportive.
- USD/INR is close to unchanged for April, with support emerging around the 85.00 level for the pair. It has outperformed CNH and IDR so far this month.
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CHINA: Country Wrap: China’s Oil Demand Near Peak.
Mar-24 05:42
- Sinopec’s full-year profit tumbled 16% amid sluggish demand, with China’s oil consumption likely nearing a peak. The country’s biggest refiner’s net income fell to 49 billion yuan ($6.8 billion) in 2024 from 58.3 billion yuan a year earlier, the company said in a filing on Sunday, citing international financial reporting standards. That compared with analysts’ estimate for profit of 56.4 billion yuan. (source: BBG)
- Over 580 major industrial projects, involving a total investment of more than CNY1.1 trillion (USD152 billion), have already been inked in the lead-up period to the Global Investment Promotion Conference, which officially kicks off on March 25 in Shanghai, the director of the Shanghai Global Investment Promotion Office said at a press briefing yesterday. (source: Yicai)
- China’s Hang Seng is down -0.10% in a slow start to the week whilst he CSI 300 is up +0.30%. Shanghai Comp is lower by -0.15% yet the Shenzhen Comp is the big underperformer, falling -1% today.
- CNY: Yuan Reference Rate at 7.1780 Per USD; Estimate 7.2510
- Bonds: A quite start to the week with futures doing very little (despite a liquidity withdrawal) and cash bonds virtually unchanged CGB 10YR 1.84%
ASIA STOCKS: A Mixed Start to the Week for Asia Stocks
Mar-24 05:24
A mixed start to the week for Asian bourses with despite hopes that the next round of tariffs will be more measured.
- China’s Hang Seng is down -0.10% in a slow start to the week whilst he CSI 300 is up +0.30%. Shanghai Comp is lower by -0.15% yet the Shenzhen Comp is the big underperformer, falling -1% today.
- In Korea, the KOSPI had a very strong week last week but has opened Monday marginally weaker as politics take front and centre in the country. The KOSPI is down -0.15%.
- Indonesia’s woes continue as heightened concerns about political power and central bank independence drive fear in investors. After a torrid last week, the Jakarta Composite is starting the week poorly again down -2.30%.
- Malaysia’s FTSE Bursa KLCI is up moderately today by +0.20% after last week’s losses of just -0.4%.
- Other key bourses are mixed with Singapore’s Straits Times up +0.15% whilst the Philippines is down -0.90%.
- India’s NIFTY 50 is having a very strong start to the week following the PMI’s, rising +0.90% at the open.
JGBS: Subdued Session To Start Week, No Shocks From BoJ Ueda & Uchida
Mar-24 05:10
JGB futures are weaker and at Tokyo session lows, -15 compared to the settlement levels.
- BoJ Governor Ueda said on Monday the central bank will continue to raise interest rates if its underlying inflation target is likely to be achieved, despite potential losses on its government bond holdings. "We have said that we will continue adjusting the degree of monetary easing if underlying inflation is likely to approach 2%," Ueda said in parliament when asked about the impact of losses on the BoJ's huge holdings of Japanese government bonds. (per RTRS)
- “Japan has not yet beaten deflation despite years of persistently rising consumer prices and the largest round of annual wage increases in three decades, the country’s finance minister has warned.” (per FT)
- Cash US tsys are 2-3bps cheaper across benchmarks in today's Asia-Pac session after Friday's uneventful end to the trading week. The US Treasury will bring a combined supply of $183bn of new two-, five- and seven-year notes.
- Cash JGBs are flat to 2bps cheaper across benchmarks. The benchmark 10-year yield is 1.6bps higher at 1.54% versus the cycle high of 1.584%.
- Swap rates are 1-2bps higher, with swap spreads mostly wider.
- Tomorrow, the local calendar will see the BoJ Minutes for January MPM and Department Sales data alongside an auction for Enhanced-Liquidity 5-15.5-years.
