RBA Leaves Rates On Hold Waiting For CPI Data; China To Focus On Lowering Inflation
Economic Data(AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH TARGET RATE UNCHANGED AT 4.25%, AS EXPECTED.
(AU) AUSTRALIA FEBRUARY RETAIL SALES M/M: 0.2% V 0.2%E.
(CN) CHINA MARCH NON-MANUFACTURING PMI: 58.0 V 48.4 PRIOR (6-month high).
(JP) JAPAN MARCH MONETARY BASE Y/Y: -0.2% V +11.3% PRIOR (lowest since Aug 2008).
(KR) SOUTH KOREA MARCH FOREIGN EXCHANGE RESERVES: $316.0B V $315.8B PRIOR.
(JP) JAPAN FEBRUARY LABOR CASH EARNINGS Y/Y: 0.7% V 0.1%E (9-month high).
(PH) PHILIPPINES FEBRUARY BUDGET BALANCE (PHP): +10.7B V -15.9B PRIOR.
(TH) THAILAND MARCH CPI M/M: 0.6% V 0.5%E; Y/Y: 3.5% V 3.2%E; CORE CPI Y/Y: 2.8% V 2.5%E.
Markets Snapshot (as of 04:30GMT)
Nikkei225 -0.6%
S&P/ASX +0.3%
Kospi +0.8%
Taiwan Taiex -1.5%
Singapore Straits Times -0.1%
Shanghai Composite closed for holiday
Hang Seng +0.5%
S&P Futures -0.1% at 1,411
April gold +0.1% at $1,680/oz
May Crude -0.3% at $104.88
Overview/Top Headlines
Asian markets were mixed today but mostly to the upside. China non-manufacturing PMI rose to a 6-month high at 58.0. PBoC Governor Zhou said that China's policy goal is to slowly lower inflation, using a combination of measures for a soft landing. Emerging markets are suffering from liquidity risks due to loose US policy. The Fed should consider other countries' interests when setting policy, though China understands why the Fed sets its policy.
Copper declined to $3.91, -0.1%, silver, wheat and corn were also weaker in the session. The Reserve Bank of Australia (RBA) as expected, held rates at 4.25% saying they needed to wait for Q1 inflation data before making a decision on any easing. Also added to the statement that terms of trade have peaked but remain high.
Also reiterated that China's growth has moderated as intended and added that growth from China is likely to be at a more moderate and sustainable rate going forward. AUD/USD extended its decline below $1.04 after a spike above $1.0460. The Hang Seng was stronger after some of the major property developers reported stronger monthly sales.
Down in Australia, Metcash disclosed an impairment charge, though left its guidance for FY12 unchanged ex-charge. An executive from the retailer said that YTD price deflation is -0.9% due to strong AUD and affirmed that Australia consumer sentiment is weak. Japan's March monetary base hit its lowest level since August 2008 which saw the USD/JPY fall to a 3-week low below ¥81.60. USD was generally weaker against both the major and emerging market currencies as confidence continues to gain in the global recovery.
Speakers/Geopolitical/In the press
(JP) Japan Government Pension Investment Fund to draw ¥8.8T from reserves to help with FY12/13 payout obligations vs ¥6T tapped in FY11/12 and FY10/11. - Nikkei News
(KR) Bank of Korea (BOK): Korean banks expected to further tighten lending to small firms (SMEs) in Q2 due to heightened risk from eurozone. - Korean Press
(JP) Japan Fin Min Azumi: Must consider the risks with not raising the sales tax given the country's fiscal position; to hold April 7th summit with China on boosting economic cooperation.
(HK) Hong Kong Monetary Authority (HKMA) has eased due diligence requirements for cross-border yuan trade to international levels after requests from the financial sector. - HK Press
Equities
Samsung Electronics, 005930.KR: To invest $7B to build a new NAND flash plant in Xi'an, China - Korean Press
NGF.AU: Zijin offers AUD0.25/share, AUD229.4M, plus AUD0.02/share special dividend.
Korea Electric Power, 015760.KR: CEO: Looking at 3-4 targets for M&A in the US and South Africa, focused on coal and uranium.
AQA.AU: Terminates sale of Avontuur Manganese asset, will sell Washpool coking coal asset; enters coal exploration JV with Sumitomo.
MTS.AU: To take a one off restructuring charge of A$34-43M; expects to recoup AUD25-30M in FY13 and FY14 A$10-15M; affirms guidance for FY12 ex-one off.
CLP Holdings, 2.HK: Will list Australian electricity retailer TRUenergy in November in Australia for a AUD4.0B IPO. - Australian Financial Review
US Equities
PBY: Reports Q4 -$0.08 (incl items) v $0.12e, R$505.3M v $510Me; -1.5% after hours.