AUSTRALIA DATA: March Retail Spend Near Estimates, But Q1 Volume Spend Flat

ACGBs (YM -1.0 & XM +1.0) are little changed after dealing in narrow ranges in today’s local session.

• There was a small payback in February non-house building approvals after the sharp rise over December/January. Nevertheless, looking through the volatility the total number is trending robustly higher. While it fell 0.3% m/m in February, less than expected, it was up 25.7% y/y after 21.6% and 3-month annualised momentum continues to run just under 30%. There has been a significant demand/supply imbalance in Australian housing and the positive trend in building approvals is welcome news.
• Cash US tsys are ~2bps cheaper after yesterday's modest gains ahead of Wednesday afternoon's Liberation (tariff) Day announcement from the White House (1600ET est). Trump's tariffs will take immediate effect after they are announced.
• Cash ACGBs are 1bp richer to 1bp cheaper, with the 3/10 curve flatter and the AU-US 10-year yield differential at +21bps.
• Swap rates are 2-3bps lower, with EFPs tighter.
• The bills strip is +1 to +2 across contracts beyond the first (-1).
• RBA-dated OIS pricing is slightly firmer today. A 25bp rate cut in May is given a 77% probability, with a cumulative 72bps of easing priced by year-end (based on an effective cash rate of 4.09%).

China will promote a pilot cash-pooling service nationwide for multinational companies to integrate domestic and foreign currency management, according to a draft statement released by the People’s Bank of China. The initiative, currently open for public feedback, further facilitates the transfer and use of funds, and reduces corporate costs. The pilot programme launched in Beijing and Shenzhen in 2021 before expanding to eight other regions in 2022. (Source: China Securities Journal)

China’s services trade grew 9.9% y/y to CNY1.3 trillion in the first two months, with exports and imports growing 13% and 7.8%, according to data from the Ministry of Commerce. The services trade deficit was CNY210 billion, a decrease of CNY8.5 billion from the same period last year. Travel services increased 29%, with exports and imports rising 142.6% and 21.1%. (Source: Securities Daily)