PHILIPPINES: CPI Print Keeps Door Open to Further Cuts.
Mar-05 01:38
- February’s CPI release was lower than expected, providing further room for the BSP to cut rates.
- Against a 2025 forecast of 3.5%, February’s result of +2.1% potentially presents concerns for the BSP.
- Other than a brief dip in September last year (that brought about rate cuts) you have to go back to COVID period for CPI to be at these levels.
- Core prices were up +2.4% y/y, but down -0.2% m/m as food price declines continued.
- The BSP surprised markets in February by remaining on hold whilst indicating that upcoming meetings will remain ‘live’ and today’s release supports this.
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JGBS: Cash Bonds Mostly Richer, BoJ SoO Signals More Hikes
Feb-03 01:36
In Tokyo morning trade, JGB futures have strengthened, +29 compared to settlement levels, after finishing Friday’s overnight session slightly weaker.
- “BoJ policymakers discussed the likelihood of raising interest rates further with some warning of upside inflation risks and the damage a weak yen could inflict on the economy, a summary of opinions at their January meeting showed on Monday.” (per RTRS)
- "The debate highlights an increasing chance the central bank will continue to push up borrowing costs in several stages, even after hiking short-term interest rates to 0.5% at the Jan. 23-24 meeting - the highest for Japan in 17 years."
- In today’s Asia-Pacific session, cash US tsys have twist-flattened, with yields ranging from 5bps higher to 2bps lower after the weekend’s tariff news. This week’s focus will be on a heavy slate of corporate earnings, key CPI and PPI inflation data, and January’s headline employment report.
- Cash JGBs are mixed across benchmarks, with yields 2bps lower to 1bp higher. The benchmark 10-year yield is 1.4bps lower at 1.231% versus the cycle high of 1.262%.
- Swap rates are 1-2bps lower. Swap spreads are slightly mixed.
ASIA: VIETNAM PMI’s Decline Further in January.
Feb-03 01:22
- Vietnam’s PMI’s declined in January to +48.9 from +49.8 in December, the second consecutive month of contraction.
- Output declined to +49 from +50.7
- New orders fell from the prior month.
- Whilst a worrying trend, the overall state of the Vietnamese economy remains strong with 4Q GDP ahead of consensus at +7.09%, CPI moderate and exports extremely strong.
BOJ: Rinban Purchase Offer
Feb-03 01:20
The BoJ offers to buy a total of Y900n of JGBs from the market:
- Y150bn worth of JGBs with <1 Year until maturity
- Y300bn worth of JGBs with 1-3 Years until maturity
- Y300bn worth of JGBs with 3-5 Years until maturity
- Y150bn worth of JGBs with 10-25 Years until maturity
