MNI ASIA PAC Weekly Macro Wrap:

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Apr-11 06:05By: Jonathan Cavenagh and 3 more...
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Executive Summary:

JAPAN 

  • Japan data was a not strong focus point this past week, with markets focused on tariff fallout and surging yen gains/equity market volatility. We had close to expected wage outcomes, while the PPI remained elevated and consistent with firm headline CPI pressures. 

AUSTRALIA 

  • Westpac’s measure of consumer confidence sank 6% m/m in April to 90.1 down from 95.9 in March, which had been boosted by February’s rate cut. Both current conditions and expectations were lower. Households were spooked by US President Trump’s reciprocal tariff announcement.
  • NAB’s March business survey was little changed from February with confidence down 1 point to -3 and conditions up 1 point to +4. The result is in line with moderate growth.

NEW ZEALAND

  • The RBNZ cut rates 25bp to 3.5% as was widely projected, due to significant domestic spare capacity and a weaker outlook from “global trade policy” which should result in inflation staying close to the target mid-point. Global developments are likely to be a significant driver of the inflation outlook and a large part of the April statement was devoted to risks from abroad. The MPC noted that “on balance” US tariffs are a downside risk to NZ growth and CPI inflation.

SHORT TERM RATES 

  • Trends have been mixed in the $-bloc over the past week, with Canada (+22bps) and the US (+7bps) firming, while Australia (-33bps) and New Zealand (-11bps) softened. 

CHINA

The deflationary pressures on China’s consumers continued in March with the CPI declining -0.1% YoY, a second consecutive month of decline.

ASIA

  • As expected, the RBI cut rates by 25bps today in line with market consensus. This is the second cut from the RBI, following the cut at the prior meeting with all voting members in favour of the cut.
  • Indonesia's CPI for March printed at +1.03%, up from -0.09% prior. The government's temporary discount on electricity was the main driver for the collapse in CPI in February. 

ASIA EQUITY FLOWS 

  • Outflow pressures mostly dominated the region in the past week, as growth concerns from US tariff hikes weighed.