ASIA STOCKS: Regional Stocks Mixed Despite China Moving Lower 

With the RBA saying in its February meeting statement that the labour market “tightened a little further in late 2024” and Governor Bullock admitting that it was the strongest argument for rates to be left on hold, January jobs data on Thursday are likely to be watched closely. Holidays though could make it volatile. Bloomberg consensus is forecasting a 20k rise in employment after December’s 56.3k and a 0.1pp tick up in the unemployment rate to 4.1%.

• Employment forecasts range from +5k to +40k but local banks are all expecting it to print below consensus. ANZ and CBA are projecting +10k and NAB and Westpac +15k.
• There is a significant probability that people took time off between jobs in January to coincide with summer holidays. Thus any volatility needs to be looked through. In January 2024, employment rose only 2k and then jumped 113.9k in February.
• Forecasters are split over whether the unemployment rate will be unchanged at 4.0% (11 analysts on Bloomberg) or increase to 4.1% (14 analysts). CBA, NAB and Westpac are all in line with consensus at 4.1%, while ANZ expects it to be unchanged at 4.0%.
• The participation rate is expected to be steady at 67.1%, an equal record high.
• Given that the RBA looks at a range of labour market indicators, the trend in hours worked, the underemployment and youth unemployment rates will also be important.

Oil prices are moderately higher after rising Monday/Tuesday on reports that OPEC is considering a further delay to output normalisation due to begin in April. Brent is flat at $75.85/bbl after an intraday high of $76.07 and WTI is 0.1% higher at $71.90/bbl following a peak of $72.11. The USD index is slightly lower.

• With market attention currently on the supply side, US inventory data out later today is likely to be monitored closely. There has been a substantial crude build since President Trump’s inauguration as flows from Canada rose sharply to beat tariff deadlines. Also, planned refining maintenance may also contribute to higher inventories.
• The US is tightening sanctions against Iran but oil exporters and consumers continue to find ways around them. Bloomberg reported that imports into China of Iranian crude rose 86% m/m to 1.74mbd in February with increased tanker-to-tanker transfers and other terminals. The US is aiming for Iran’s shipments to be under 10% of current levels.
• Chevron’s exports of Venezuelan oil are also being considered by the new US administration.
• Also on the supply side, talks have begun between the US and Russia on Ukraine but a peace is a long way off with Ukraine so far being excluded, Russia not accepting NATO peacekeepers but the US fine with them, and the G7 looking at tightening the current oil price cap on Russian exports.
• A Ukrainian strike on a Russian pipeline is expected to reduce flows from Kazakhstan to the Black Sea by close to a third while repairs are underway, according to Bloomberg.
• Later the FOMC meeting minutes are published and the Fed’s Jefferson speaks. In terms of data, there are January US housing starts/permits, NY Fed February services, UK January CPI/PPI and euro area December current account.

• Whilst the world agonizes about tariffs and their potential impact on their economy, the Vietnamese parliament raised is economic growth target to ‘at least’ 8% in 2025.
• As Vietnam targets double digit growth from 2026 onwards today’s announcement is a meaningful revision of the prior 2025 target of 6.5%-7.0%.
• Inflation is targeted at 4.5%-5.0%, an increase in the upper band by 0.5% with more monetary and fiscal policies to be announced.
• Vietnam has stated publicly that it has ‘no intention of imposing measures that restrict trade with the US’ and that they intend to import more US agricultural products.
• The parliament approved an $8bn railway connecting Haiphong to Lau Cai, running through Hanoi running some 400 kms.  The infrastructure will be financed from the state budget and the issuance of bonds.
• The government announced the construction of the Ninh Thuan nuclear power plant, to be completed by 2030 alongside a significant overhaul of the government with thousands of jobs to go.
• The Vietnamese government 10YR bond yield was at 3.13%, having increased 80bps over the last year.