BTP TECHS: (M5) Resumes Its Uptrend

• China will soon release the latest edition of the catalogue of industries encouraged for foreign investment, which will include more items in advanced manufacturing, modern services, high-tech, energy-saving and environmental protection sectors, People’s Daily reported. (source: MNI – Market News)
• The ongoing malaise in the China property sector continued in February with New House prices m/m declining more than expected and Used House prices declining by the same as January.  New house prices declined -0.14% (from -0.07% in January).      New house prices have declined m/m every month since June 2023.  New house prices saw declines in 45 cities, up from 42 in January, with Shanghai again the outperformer, rising +0.20%, whilst Beijing scrapped into the positive up +0.10%.  Used home prices declined -0.34% representing a 22nd consecutive m/m decline.  Whilst there is likely impact from the Lunar New Year holidays, the data remains sobering for policymakers focused on resurrecting the fortunes for the property sector. (source: MNI – Market News)
• Any expectations for strength in the property sector were quickly diminished with the release of the February Property Development statistics.  Declining -9.8% y/y this represented the 32nd consecutive month of declines.  New home sales declined -0.4% y/y with the sales area declining -3.4% y/y. (source: MNI – Market News)
• China’s retail sales for February expanded +4.0%, up from +3.8% prior.  Retail sales in rural areas jumped significantly with the best performance in three months, despite the Lunar New Year holiday.  (source: MNI – Market News)
• The Hang Seng has led the day for China’s key bourses up +1.05% with Shanghai up just +0.17% whilst the CSI 300 is down -0.22% and Shenzhen flat.
• CNY: Yuan Reference Rate at 7.1688 Per USD; Estimate 7.2217
• Bonds: a sizeable sell off in bonds with the CGB 10YR 1.89% (+4bps)

The BBDXY USD index is moderately higher today after falling 0.2% on Friday. It has trended higher since its intraday low early in the session supported by a softer yen. USDJPY is 0.2% higher at 148.92, close to the intraday high of 149.07. 

• While G10 moves have been muted, risk-sensitive Kiwi has outperformed again today with NZDUSD up 0.2% to 0.5758 after a high of 0.5763. The NZ PSI for February printed below breakeven-50 again but the Q1 average is still above Q4’s.
• AUDUSD rose to 0.6338 and has trended down since to be moderately higher on the day at 0.6329 pressured by mixed China activity data and lower China equities. This has left AUDNZD down 0.1% to 1.0992.
• European currencies are little changed during the APAC session with EURUSD around 1.0878 and GBPUSD 1.2936. NOK has benefited from increased geopolitical tensions in the Middle East with US attacks on Houthi positions in Yemen. EURNOK is down 0.1% to 11.5745.
• Equities are mixed with the Hang Seng up 1.1% and ASX +0.8% but CSI 300 down 0.2% and S&P e-mini -0.5%. Oil prices are higher with WTI +0.7% to $67.67/bbl. Copper is down 0.1% and iron ore has been $102-103/t.
• Later US March Empire manufacturing and February retail sales print. ECB President Lagarde appears.  

The China stimulus news has given equity markets in the region a boost, with most in the green today. 

• The Hang Seng has led the day for China’s key bourses up +1.05% with Shanghai up just +0.17% whilst the CSI 300 is down -0.22% and Shenzhen flat.
• In Korea the KOSPI having a very strong day after a slow end the last week and is up +1.50% today, making it one of the best regional performers.
• Malaysia’s FTSE KLCI continues its recent good run, rising +1.13%.
• Indonesia’s Jakarta Composite remains in a challenging period, having finished the end of last week with heavy losses, is weak again today down -1.00% one of the worst regional performers.
• Other key indices are positive with the FTSE Straits Times of Singapore +0.66% and Philippines +0.66%
• India’s NIFTY 50 is opening in positive territory also, up +0.35% in early trading.