NEW ZEALAND: Businesses Less Certain On Outlook, Gradual Recovery Continues
ANZ business confidence fell to 49.3 in April from 57.5, the lowest level since July 2024, the month before the start of the RBNZ’s easing cycle. The activity outlook moderated to 47.7 from 48.6, which remains above February’s 45.1. On a more positive note, the assessment of activity compared to a year ago rose 10 points to 11 driven by services and signalling a strong start to Q2 for GDP growth. Price/cost components trended higher over Q1 but were mixed in April but inflation expectations were stable around 2.6%.
NZ ANZ business activity outlook vs employment intentions
Source: MNI - Market News/LSEG
- It is likely that the survey was impacted by US tariff announcements, as ANZ noted that “forward-looking activity indicators were sharply lower in the late-month responses”. Export intentions fell 5 points to 12.2 with manufacturing down 7.6 points, while investment intentions were steady around 17.2.
- Employment compared to a year ago rose to +1.5 from -6.2 with services, construction and agriculture showing more jobs, while employment intentions rose 2.5 points to 18.1, the highest since July 21. This is in line with filled jobs and vacancy data showing a turn in the labour market. Wages expectations a year ahead rose over a point to 81.3.
- Cost expectations 3 months ahead rose to 77.9 from 74.1, highest since September 2023, while pricing intentions moderated almost 2 points to 49.4, signalling some margin squeeze. Profit expectations fell 1 point.
NZ ANZ business survey costs/prices
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JGBS: Richer With US Tsys As Friday’s Risk-Off Extends
In Tokyo morning trade, JGB futures are sharply higher, +34 compared to settlement levels.
- Japan's industrial production rebounded at a faster-than-expected pace in February, but the coming U.S. tariffs may weigh on the recovery ahead. Industrial production rose 2.5% in February following January's 1.1% decline.
- Retail sales rose 0.5% m/m (+1.4% y/y) in February; est. -0.2% (+2.5%).
- Cash US tsys are 3-5bps richer in today’s Asia-Pac session as concern over the health of the US economy fuels demand for haven assets. On Friday, a strong risk-off tone pushed the US 10-year 11bp lower ahead of this week's Trump Tariff "Liberation Day" rollout on April 2, not to mention Friday's employment data for March.
- Cash JGBs are flat to 3bps richer across benchmarks, with the belly leading. The benchmark 10-year yield is 2.2bps lower at 1.521% versus the cycle high of 1.596%. 2-year supply is due later today.
- Swap rates are flat to 2bps lower. Swap spreads are mixed.
MNI: **CHINA MAR MANUFACTURING PMI 50.5 VS 50.2 IN FEB
- **CHINA MAR MANUFACTURING PMI 50.5 VS 50.2 IN FEB
CHINA: Central Bank Injects Liquidity via OMO.
- The PBOC issued CNY166.7bn of 7-day reverse repo at 1.5% during this morning’s operations.
- Today’s maturities CNY135bn
- Net liquidity injection CNY31.7bn
- The PBOC monitors and maintains liquidity in the interbank system via the issuance of reverse repo.
- The CFETS Pledged Repo Deposit Institutions 7 Day Weighted Average Index is at 1.68%, from Friday’s close of 2.05%.
- China’s overnight interbank repo rates is 1.72% , from Friday's close of 1.70%
- China’s 7-day interbank repo rate is 2.33%, from Friday’s close of 1.90%
