AUSSIE BONDS: Cheaper, Q1 Capex Lower, Focus On Trump's Tariff Legality
ACGBs (YM -2.0 & XM -3.0) are holding in negative territory after today’s capex data.
- Business investment fell 0.1% q/q (estimate +0.5%) in Q1 versus a revised +0.2% in Q4.
- (AFR) “Inflation is not a barrier to another cash rate cut as soon as the next Reserve Bank of Australia board meeting in July, as new figures showed price pressures remained within the central bank’s target band last month.” (See BBG link)
- Cash US tsys are 1-3bps cheaper in today’s Asia-Pac session after yesterday’s modest sell-off.
- (Reuters) - A U.S. federal court on Wednesday blocked President Donald Trump's "Liberation Day" tariffs from going into effect, ruling that the president overstepped his authority by imposing across-the-board taxes on imports from nations that sell more to the United States than they buy."
- “The court gave the administration 10 days to “effectuate” its order, but didn’t provide any specific directions of steps it must take to unwind the tariffs." (per BBG)
- Cash ACGBs are 2-3bps cheaper with the AU-US 10-year yield differential at -14bps.
- The bill strip has bear-steepened, with pricing -1 to -3.
- RBA-dated OIS pricing is slightly firmer across meetings today. A 25bp rate cut in July is given a 58% probability, with a cumulative 69bps of easing priced by year-end.
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CHINA PRESS: A-share Market To Be Supported - Analyst
Authorities' support for the A-share market together with China’s low interest rate environment could drive up stock prices in the long run, said Wu Zhaoyin, chief investment officer at Soochow Futures. In the near term, major indexes may fluctuate as firms release annual and quarterly reports, and U.S. tariffs could be adjusted during the May 1-5 holiday period when the exchanges are closed, said Wu, noting impacts can be controlled.
CHINA PRESS: Lawmakers Recommend Passing Private Sector Law
Lawmakers have recommended the draft private sector promotion law be passed during the current session of the NPC Standing Committee, Xinhua news agency has reported, adding that officials called for authorities to unveil concrete measures to ensure its adoption. The legislation will establish the legal status of the private economy for the first time, allowing China to promote sustainable and high-quality development in the private economy, Xinhua noted. The Standing Committee of the 14th NPC began its four-day 15th session on Sunday in Beijing. (Source: Xinhua)
CHINA PRESS: Shenzhen Incentivises Domestic Sales
Shenzhen city will incentivise enterprises to boost domestic sales by offering a CNY500,000 reward for every CNY100 million increase in retail sales, up to a maximum of CNY10 million, Yicai.com reported. In response to rising foreign trade pressure, the municipal government launched 10 measures with the highest single reward reaching up to CNY25 million, including supporting firms to participate in the consumer trade-in scheme and expanding online retail, the newspaper said.
