INDONESIA: Country Wrap: Trade Data Released Postponed Due to Tariffs.
May-16 05:08
- Indonesian President Prabowo is due to discuss trade and investment, national security and tourism with the Thai Prime Minister during an official visit starting on Monday. The two leaders will also discuss food security and education as part of government efforts to enhance bilateral relations and cooperation (source BBG)
- The government postponed the release of April’s trade data, which would have unveiled the impact of new United States import tariffs on Indonesian exports, just hours before it was supposed to be published. Statistics Indonesia (BPS) announced on Wednesday evening that the April trade data release scheduled for Thursday morning had been pushed back to the first work day of June. The report was eagerly awaited as April marks the first month of new tariffs imposed by the US on almost all countries, with a particularly steep rate placed on US imports from China, Indonesia’s largest trade partner. (source Jakarta Post)
- The Jakarta Composite has delivered another strong week of gains rising +0.30% today and almost 2% for the week.
- The Rupiah had a strong finish to the week gaining +0.615% to deliver a gain of +0.56% for the week at 16,428
- Bonds are lower in yield across the curve. The 10Yr is -2bp lower yet remains +3bps higher for the week.
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AUSSIE BONDS: Cheaper, US Retail Sales & Chair Powell Today, Jobs Data Tomorrow
Apr-16 05:08
ACGBs (YM -2.0 & XM +1.0) are slightly weaker after dealing in narrow ranges in today's Sydney session.
- In today's Asia-Pac session, US tsys are exhibiting a twist-steepener, with yields ranging from 3bps lower at the short end to 1bp higher further out the curve. Today's US calendar sees: Retail Sales, Industrial Production, Capacity Utilization and NAHB Housing Market Index. Fed Chair Powell will also deliver a speech about the economic outlook.
- Cash ACGBs are 1-3bps cheaper with the AU-US 10-year yield differential at +3bps.
- The bill strip pricing is -4 to -7, with a flattening bias.
- RBA-dated OIS pricing is 3-7bps firmer across meetings today, with September leading. A 50bp rate cut in May is given a 21% probability, with a cumulative 114bps of easing priced by year-end.
- (AFR) “The Reserve Bank of Australia has flagged that interest rates could be cut again in May after the federal election, once it has the latest information on inflation and Donald Trump’s trade war.” (see BBG link)
- Tomorrow, the local calendar will see The March Employment Report, with consensus expecting +40k jobs created but an increase in the unemployment rate to 4.2% from 4.1%.
FOREX: FX Wrap - USD Gives Back Overnight Gains
Apr-16 05:05
The BBDXY had an Asian range of 1230.09 - 1232.89. After bouncing off its lows yesterday these gains have been rather fleeting as the USD turned back down in our session as risk took a turn for the worse, watch price action around the week's lows around 1227/28. The USD has looked in real trouble as a rotation out of US assets seems to be gathering momentum and normal correlations with yield are breaking down.
- EUR/USD - Asian range 1.1281 - 1.1345, traded bid from the open as stocks came under pressure. EUR/USD goes into the London open trading at the session highs. Traders are targeting a move back to 1.2000 in the Euro as the USD’s safe haven role is reassessed.
- GBP/USD - Asian range 1.3222 - 1.3266, dealing right at the day's highs going into the London session after breaking overnight highs. GBP has been playing catch up to the broad USD weakness.
- USD/CNH - Asian range 7.3176 - 7.3347, the USD/CNY fix printed higher again at 7.2133 strengthening the view the PBOC is going to slowly manage the currency lower . USD/CNH goes into the London open dealing around 7.3300.
- USD/JPY - Asian range 142.47 - 143.51, under pressure most of the session going into London around 142.60, watch for a breach of the week's lows around 142.00. Huge support level around 140, a break here could see the move really accelerate.
- Cross asset : SPX -1.0%, Gold 3279, US 10yr 4.33%, BBDXY 1230, Crude oil 61.27.
- Data/Events : IT CPI, EC CPI, US Retail Sales, Powell to speak.
Fig 1: USD/JPY Spot Daily Chart
Source: MNI - Market News/Bloomberg
OIL: Crude Looks Through China Data As Demand Worries Dominate
Apr-16 05:01
Oil prices are moderately lower today in line with weaker risk appetite following Tuesday’s soft US Empire manufacturing print and concerns US-EU/China trade talks are making little progress. WTI is down 0.2% to $61.20/bbl close to the intraday low of $61.09, while Brent is 0.1% lower at $64.63/bbl after a trough of $64.43. The USD index is down 0.3%.
- Generally better-than-expected March activity data from China didn’t buoy oil prices. IP in the year to March rose 6.5% y/y after 5.9%. The market remains concerned that its trade war with the US will significantly reduce energy demand from the world’s largest oil importer. There are negotiations but an agreement still seems some way off.
- The rise in protectionism drove the IEA to cut its oil demand projection significantly for 2025 and 2026. It had already been forecasting a market surplus for some time.
- Bloomberg reported that there was a US crude inventory build of 2.4mn barrels last week, while products fell again with gasoline down 3mn and distillate 3.2mn, according to people familiar with the API data. The official EIA figures are out today.
- Later Fed Chairman Powell speaks at 1830 BST to Chicago’s Economic Club, also Hammack and Schmid appear. US March retail sales, IP and April NY Fed services & NAHB housing indices print. UK March CPI, euro area final March CPI and February current account are released. The BoC decision is announced and with expectations for unchanged rates.
