USD: Broader buying emerging

US equity futures are stronger during today’s APAC session with the S&P e-mini up 0.4% and the Nasdaq +0.6%. The downward revision to the US core PCE deflator on Friday has increased optimism that the Fed will cut rates in the next few months. MSCI APEX 50 is down 0.2% today, but Australia, NZ and HK are still closed,. The USD index is slightly higher.

• China’s CSI 300 is up 1.5% supported by some flows out of Japan at the start of the month and the higher-than-expected China PMIs yesterday.
• Japan’s Nikkei is down 1.0% due to profit taking on the first day of the financial year after the index had its strongest quarter in Q1 for almost 15 years. Unexpected news that Denso will sell its entire stake in Toyota has seen the transport sector perform particularly poorly.
• Korea’s KOSPI is up 0.2% with the KOSDAQ outperforming +0.8%. The March trade surplus was lower than expected but in line with February. Taiwan’s TAIEX is down 0.2%.
• India’s Nifty 50 is 0.8% stronger.
• ASEAN markets are mixed with Singapore’s Straits Times up 0.6%, Malay KLCI +0.5%, SE Thai +0.2% and Philippines PSEi +1.2% but Indonesia’s Jakarta Comp down 1.8%, as inflation printed higher than expected.
• US trading is open later but Europe remains closed. The Fed’s Cook appears and US manufacturing PMI/ISM for March print.

JGB futures have pared the morning’s cheapening during Tokyo’s afternoon session, -11 compared to the settlement levels.

• There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined Tankan Survey.
• (Bloomberg) The Bank of Japan will probably take its time before raising interest rates again, with October likely being the earliest it might move next, according to a former BOJ official renowned as one of the nation’s leading inflation experts. (See link ICYMI)
• (Bloomberg) Japanese equities fell as investors took profit on the first day of the new fiscal year after the Nikkei 225 Stock Average completed its strongest quarter in almost 15 years. (See link)
• Cash tsys are dealing in the Asia-Pac session with a twist-steepening, pivoting at the 20s, with yields 2bps lower to 1bp higher after resuming trading following Friday’s holiday.
• The cash JGB curve has bear-steepened, with yields flat (2-3-year) to 2.4bps higher (20-year). The benchmark 10-year yield is 1.2bps higher at 0.739% versus the YTD high of 0.801%.
• The swaps curve has also bear-steepened, with rates flat to 2bps higher. Swap spreads are mostly tighter.
• Tomorrow, the local calendar will see Monetary Base data alongside 10-year supply.

TYM4 is trading at 110-26, +0-00+ from NY closing levels.

• Cash tsys are dealing in the Asia-Pac session with a twist-steepening, pivoting at the 20s, with yields 2bps lower to 1bp higher after resuming trading following Friday’s holiday.
• With newsflow light, the long end appears to have cheapened in line with longer-dated JGBs, which have weakened on the first day of the new fiscal year.
• Later today the US calendar sees S&P Global Manufacturing PMI and ISM Manufacturing data.
• Also, Fed Governor Lisa Cook will give acceptance remarks for a lifetime achievement award in Washington.