ASIA STOCKS: All In The Green Amid Tariff Hopes/Trump Call On Powell
Asia Pac equity markets are all in the green, led by tech related plays and Hong Kong markets. We had strong cash gains in US markets on Tuesday, while US futures are firmly in the first part of Wednesday trade. Trump remarks have dominated sentiment, with the US President stating he had no intention of firing Fed Chair Powell (which has been a source of concern for markets recently), while also stating final tariff levels on China will be lower than the 145% that currently prevails. This followed reported comments from US Tsy Secretary Bessent that the tariff standoff is unsustainable, and he expects de-escalation with China.
- Eminis are up over 1.5%, but the contract has been unable to sustain +5400 levels. A move into 5500/5600 region would likely be needed to unnerve recent shorts for this benchmark. Nasdaq futures are +1.8% at this stage.
- Japan markets are up over 2% at this stage, with the NKY 225 trending back towards 35000. The Taiex has outperformed in Taiwan up nearly 4%, while the South Korean Kospi is up around 1.5%, above 2500 in index terms.
- Hong Kong markets have the HSI up 2.4% at the break, with the tech sub index over 3%.
- Despite appearing to soften his stance on China, onshore China markets are only a touch higher at this stage. The CSI 300 up +0.22%, lagging the gains seen elsewhere.
- Trends are slightly more modest in SEA markets, the Singapore Straits Times up around 1%, same too for JCI in Jakarta, +1.2%. Gains elsewhere though are under 1%, while Philippine markets are down slightly.
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US TSYS: Cash Bonds Cheaper With Equity Futures Higher On Tariff Hopes
In today's Asia-Pac session, TYM5 is 110-30, -0-04+ from closing levels.
- Current levels remain well within technicals: resistance above 111-25 (High Mar 11), initial support below 110-19 (20-day EMA), according to MNI's technicals team.
- Cash US tsys are 2-3bps cheaper across benchmarks in today's Asia-Pac session after Friday's uneventful end to the trading week.
- US and European stock-index futures rose on signs that the next round of President Donald Trump's tariffs may be more measured than previously suggested. (per BBG)
- Monday's focus will be on S&P flash PMIs alongside more Fed speakers including Atlanta Fed Bostic on Bbg TV and Fed Gov Barr on small business lending late in the afternoon.
- This week also brings the last US Treasury coupon auctions of the month, with a combined $183 billion of new two-, five- and seven-year notes.
OIL: Crude Moderately Lower On Heightened Uncertainty
Oil prices are moderately lower during today’s APAC trading pressured by the pullback in risk and tariff jitters as the April 2 deadline approaches. WTI is down 0.3% to $68.05/bbl after rising to $68.47 and Brent is 0.4% lower at $71.87/bbl following a high of $72.31. The USD index is off its intraday trough to be slightly higher.
- Markets were a little calmer when Bloomberg reported that the April 2 US reciprocal tariffs will be more targeted and not as broad-based as feared. As the date approaches though, tension is rising given heightened uncertainty over the details. Oil markets have been concerned that increased trade protectionism will weigh on global growth and thus demand for crude.
- OPEC will also begin output normalisation at the start of April. 138kbd is due to return to the market after previous quota reductions. The impact of this remains unclear given that a number of countries have been exceeding their quotas and whether this will be included in the production increase.
- Following US-Ukraine talks in Saudi Arabia on the weekend, US-Russia discussions are to take place today.
- Later the Fed’s Bostic and Barr appear and preliminary March S&P Global PMIs and February Chicago activity index are released. European March PMIs are also out.
BONDS: NZGBS: Closed Little Changed On A Data-Light Local Session
NZGBs closed little changed on a data-light local session, with benchmark yields flat to 1bp higher.
- The local calendar will be empty until ANZ Consumer Confidence and Filled Jobs data on Friday.
- NZ-US and NZ-AU 10-year yield differentials closed little changed.
- Cash US tsys are 2-3bps cheaper across benchmarks in today's Asia-Pac session after Friday's uneventful end to the trading week. Monday's US focus will be on S&P flash PMIs alongside more Fed speakers including Atlanta Fed Bostic on Bbg TV and Fed Gov Barr on small business lending late in the afternoon.
- Swaps closed with a twist-steepener, with rates 2bps lower to 1bp higher.
- RBNZ dated OIS pricing closed flat to 3bps softer across meetings, with late 2025 / early 2026 leading. 24bps of easing is priced for April, with a cumulative 68bps by
- On Thursday, the NZ Treasury plans to sell NZ$250mn of the 3.00% Apr-29 bond, NZ$200mn of the 4.25% May-36 bond and NZ$50mn of the 5.00% May-54 bond.
