EM ASIA CREDIT: FY Results: JSW Infra (JSWINI, Ba1/NR/BB+) leverage rising.

USD/CNH sits back in 7.2750/60 region, up around 0.15% so far today, but within recent ranges. Monday's low in the pair came in at 7.2531, which also marked both month and quarter end. Onshore USD/CNY spot is a little higher as well, last near 7.2650, leaving CNH-CNY basis as positive. 

• USD/CNH remains within recent ranges and we are back above all key EMAs. We tested sub the 20, 50 and 100 day yesterday. The 200-day is further south near 7.2400. Note as well the simple 200-day MA, which is still near 7.2200, helped mark lows in March. Recent highs, towards the end of March were just above 7.2820.
• We are seeing a better onshore equity tone, albeit modestly, while Hong Kong shares are up over 1%. The better Caixin PMI print from earlier has been cited as a positive. This is yet to aid CNH though. The currency is also lagging a slightly softer USD tone against the majors, but aggregate moves are very modest.
• Focus remains on Wednesday's US reciprocal tariff announcement. Given China's large trade surplus with the US and tariffs already placed by the Trump Administration on China, further tariff hikes could work against the yuan.
• Still, Trump reiterated earlier today that some type of deal around TikTok was still possible. A weaker yuan may also weigh on relations with the US.
• In terms of the 1 month risk reversal level, it is still in positive territory, but above recent highs. 1 month implied vol was last at +4.4%, towards the bottom end of recent ranges (see the chart below). This fits with any upside in USD/CNH still being gradual rather than dramatic. It's a similar story for the 1 week equivalent, albeit with the risk reversal back in negative territory. 

Fig 1: USD/CNH - 1 month Risk Reversal & Implied Vol 

Source: MNI - Market News/Bloomberg 

The RBA left rates unchanged at 4.10% today, as was widely expected given the cautious tone following February’s 25bp cut. One of the largest changes to the statement was what was not included. February’s comment that “the Board remains cautious on prospects of further policy easing” was removed, thus it’s keeping its options open going forward given that “underlying inflation continues to ease” as expected, but it is still “cautious about the outlook”. Policy remains restrictive but its reduction at the previous meeting was omitted. 

• As expected, the RBA looked through the drop in employment in February repeating that “labour market conditions remain tight” as underutilisation is “relatively low” and businesses continue to “suggest that availability of labour is still a constraint”. However, the risk that the labour market could be tighter than the RBA thinks was removed from the statement.
• The paragraph on upside risks was also excluded with risk “on both sides”. However, the tone on private demand was more positive as it “appears to be recovering” and “real household incomes have picked up” with “some measures of financial stress” easing. But soft demand continues to make passing on higher costs to customers “difficult”.
• Given that US reciprocal tariffs are due to be announced this week, there were further comments on this issue including that inflation “could move in either direction”. They are impacting “confidence globally” which would “likely be amplified” if tariffs increase or there is retaliation. The developments are expected to weigh on global growth.
• Deputy Governor Hauser said that changes to the Board’s communication would be discussed at this meeting. There was no mention of it in the statement but Governor Bullock is likely to be questioned on this at the press conference at 1530 AEDT.
• Statement can be found here.

NZGBs closed modestly richer, slightly off session bests, out to the 5-year. However, the 10-year yield closed sharply higher following the NZ Treasury’s launch of the syndicated tap of the 2.00% 15 May 2032 bond. 

• The Treasury expects to issue at least NZ$3.0bn and will be capped at NZ$4.0bn. Initial price guidance is 14 to 17bps over the 15 May 2031 nominal bond. The issue will be priced tomorrow, and further issuance of the bond will not occur before July 2025.
• ANZ Bank New Zealand Limited; Bank of New Zealand; Citigroup Global Markets Limited; and Westpac Banking Corporation, New Zealand are Joint-Lead Managers for the issue.
• Cash US tsys are slightly richer in today's Asia-Pac session, with the NZ-US 10-year yield differential 9bps wider at +38bps, the widest since October last year.
• Swap rates closed little changed.
• RBNZ dated OIS pricing is little changed. 24bps of easing is priced for April, with a cumulative 72bps by November 2025.
• Tomorrow, the local calendar will see Building Permits ahead of CoreLogic Home Value and ANZ Commodity Price data on Thursday.