EM CREDIT SUPPLY: China Hongqiao (HONGQI, NR/BB/BB+ ) - FV Estimate

AUDUSD approached 64c earlier in the APAC session but rebounded following a higher CNY fixing. The pair is now up 0.2% to 0.6427, close to the intraday high and just below resistance at 0.6428. Risk appetite appears to have stabilised with mixed equity and commodity prices, which is probably contributing to the narrow range in AUDUSD. After falling 0.7% yesterday, the USD index is flat but off today’s peak. 

• Aussie is little changed against other major currencies, which it weakened against on Monday. AUDNZD is slightly higher at 1.0697 following a peak of 1.0706. AUDJPY is down 0.1% to 90.30 after rising to 90.58. AUDEUR is up 0.1% to 0.5579 but off today’s high of 0.5588 and AUDGBP is flat at 0.4796 after breaking above 0.4800 briefly.
• Equities are mixed with the S&P e-mini up 0.6% and KOSPI +0.1%, ASX & CSI 300 flat, but Hang Seng down 0.5% & TAIEX -0.8%. Oil prices are higher with WTI +0.7% to $62.85/bbl. Copper is up 0.6% but iron ore is below $99/t.
• Later the Fed’s Jefferson, Harker, Kashkari, Barkin and Kugler appear with the focus likely to be on any comments related to central bank independence. April Philly/Richmond Fed indices and preliminary April euro area consumer confidence print. The ECB’s de Guindos speaks.

ACGBs (YM +5.0 & XM flat) are mixed but sitting near Sydney session highs as trading resumes after the Easter weekend. The local calendar has been light today ahead of S&P Global PMIs tomorrow. 

• Cash US tsys are slightly mixed, with a flattening bias, in today's Asia-Pac session after yesterday's long-end sell-off.
• Cash ACGBs are 2-7 bps richer with the AU-US 10-year yield differential at -14 bps.
• Swap rates are 1-5 bps lower, with the 3s10s curve steeper.
• The bills strip has bull-flattened, with pricing +1 to +5.
• RBA-dated OIS pricing is 1-8 bps softer across meetings today. A 50bp rate cut in May is given a 24% probability, with a cumulative 122bps of easing priced by year-end (based on an effective cash rate of 4.09%).
• The AOFM plans to sell A$1000mn of the 3.25% 21 April 2029 bond tomorrow.

The People’s Bank of China will likely cut the reserve requirement ratio or the interest rate in Q2, taking into account the changing external environment and domestic housing market and price trends, said Wang Qing, analyst with Golden Credit Rating. The policy interest rate could see a 30 basis point reduction to lower the financing costs of the real economy significantly. However, Ming Ming, chief economist of CITIC Securities believes, given the stock market recovery and depreciation pressure on the yuan, the PBOC will focus on expectation management in the near term and retain policy room to deal with further uncertainty.