EM ASIA CREDIT: Japfa Comfeed (NR/B+/B+) results out, refinancing update next
Japfa Comfeed, the Indonesian food processing company focused on poultry, reported its Q1 results after close. EBITDA rose 2.6% YoY to IDR1.4T, with reported fully consolidated LTM net debt to EBITDA of 1.4x, more or less the same as end 2024 (1.5x). The next milestone will be any update on refinancing of the $ JPFAIJ 5 ⅜ 03/26 bond. Fitch referenced the issuer yesterday, and noted strong local bank support, which should mitigate refinancing risks. Neutral for valuations.
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CHINA: CAIXIN PMI Shows Stability Despite Tariffs.
- China’s CAIXIN PMI , which emphasizes smaller, private, and export-oriented companies expanded in March in spite of US tariffs.
- The private sector survey result of +51.2 was a marked improvement from +50.8 the month prior
- This was the sixth consecutive month of expansion (i.e. above 50) and the best result since November last year.
- The results indicate a positive outlook from private companies which for many observers recognizes a clearer outlook for the broader economy.
- This week sees a press conference from the White House where further updates on tariffs will be announced at a time as the US is reviewing of Beijing’s compliance with phase 1 on the trade deal agreed during Trump’s first Presidency.
- The Senior Economist at Caixin noted that “Supply and Demand kept expanding and export growth has continued, despite the job market remaining sluggish.”
STIR: RBA Dated OIS Pricing Little Changed Ahead Of Policy Decision
RBA-dated OIS pricing is little changed across meetings today ahead of today's RBA Policy Decision.
Figure 1: RBA-Dated OIS – Today Vs. Yesterday
Source: MNI – Market News / Bloomberg
AUD: A$ Off Lows As Equities Recover & China PMI Rises
A$ has trended lower through most of the session as weaker risk appetite continued to weigh but is off its lows and bounced on the better-than-expected China Caixin manufacturing PMI after falls across much of Asia. AUDUSD is down slightly to 0.6245 after a low of 0.6232, while the USD index is little changed.
- February retail sales were slightly weaker than expected rising 0.2% m/m after 0.3% with annual growth moderating 0.2pp to 3.6%. Looking through volatility from seasonal discounting, retail spending is in line with rates seen since October.
- The yen and euro continue to benefit from weaker risk sentiment driven by tariff fears leaving AUDJPY down 0.2% to 93.52 but off today’s low of 93.27 and AUDEUR -0.1% to 0.5770 up from 0.5759. AUDGBP is 0.1% lower at 0.4832.
- AUDNZD is moderately higher today at 1.1009 and has spent most of the session above 1.1000 reaching a peak of 1.1010.
- Equities are mixed with the ASX up 0.4% and Hang Seng +0.7% but CSI 300 flat and S&P e-mini down 0.4%. Oil prices are moderately higher with WTI +0.1% to $71.56/bbl. Copper is up 0.5% but iron ore has fallen below $102/t.
- The RBA decision is announced at 1430 AEDT today followed by Governor Bullock’s press conference at 1530 AEDT. The bank is widely expected to leave rates at 4.10% after cutting 25bp at the last meeting (see MNI RBA Preview here).
- Later the Fed’s Barkin speaks on policy and the economic outlook. US final March manufacturing PMI, March manufacturing ISM, February JOLTS job openings and March Dallas Fed services print. The ECB’s Lagarde, Lane and Cipollone speak and European March manufacturing PMIs and euro area CPI are released.
