MNI EUROPEAN OPEN: Australian Jobs Growth Slows
EXECUTIVE SUMMARY
- POWELL TO SIT TIGHT AMID HEIGHTENED UNCERTAINTY - MNI FED WATCH
- FED STICKS TO TWO ‘25 CUTS, SLOWS QT PACE - MNI
- TRUMP SAYS FED SHOULD CUT RATES AS TARIFF PUSH HEATS UP - BBG
- ISRAEL SAYS IT INTERCEPTED MISSILE LAUNCHED FROM YEMEN - RTRS
- NZ ECONOMY GROWS 0.7% OVER Q4 - MNI BRIEF
- AUSSIE UNEMPLOYMENT STEADY, JOBS FALL - MNI BRIEF
Fig 1: Australian Jobs Growth Slows, But Labor Market Still Tight
Source: MNI - Market News/Bloomberg/Refinitiv.
UK
BOE (MNI BOE PREVIEW): It would be a huge surprise to us, markets and sellside economists if there was anything other than a pause in the MPC’s cutting cycle at the March meeting with unchanged guidance. Probably the most interesting unknown is the voting split, with the number of plausible dovish dissents ranging from two to four – we suspect with a low conviction that there could be three, one more than consensus. We look at how each member is likely to vote in the detail.
EU
EU (ECONOMIST): “On Thursday a summit of European leaders begins in Brussels. High on the agenda is a new €40bn ($44bn) military support package for Ukraine proposed by the EU’s top diplomat, Kaja Kallas.”
UKRAINE (BBC): “US President Donald Trump has held what he described as a "very good" hour-long phone call with his Ukrainian counterpart Volodymyr Zelensky, a day after speaking to Russia's President Vladimir Putin. Writing on his social media platform Truth Social, Trump said the call was aimed at aligning Ukraine and Russia "in terms of their requests and needs", adding that ceasefire efforts were on track.”
TURKEY (BBC): “Protests have erupted in Turkey after authorities detained the mayor of Istanbul, just days before he was due to be selected as a presidential candidate. Ekrem Imamoglu, from the secular Republican People's Party (CHP), is seen as one of President Recep Tayyip Erdogan's strongest political rivals.”
US
FED (MNI FED WATCH): The Federal Reserve can afford to sit tight on monetary policy for now as increased uncertainty from President Donald Trump's tariffs policies could lead to one-time price hikes but also dampen economic activity in a way that reverses those effects, Fed Chair Jerome Powell said Wednesday.
FED (MNI): Attached is a rough transcript of Fed Chair Jerome Powell's March press conference.
FED (MNI): Federal Reserve officials said Wednesday they expect to cut interest rates twice this year, the same as December, as inflation looks more persistent than thought and heightened uncertainty around tariff policies raises worries about an economic slowdown.
FED (BBG): “President Donald Trump said the Federal Reserve should cut rates, splitting with the US central bank as officials weigh the economic cost of his tariff push. “The Fed would be MUCH better off CUTTING RATES as U.S.Tariffs start to transition (ease!) their way into the economy,” Trump said in a post on Truth Social. “Do the right thing. April 2nd is Liberation Day in America!!!”
OIL (BBG): “Energy Secretary Chris Wright said Wednesday that “now is an attractive time to be buying oil” as the administration contemplates refilling the US Strategic Petroleum Reserve.”
TECH (FT/BBG): “Nvidia will spend hundreds of billions of dollars on chips and other electronics manufactured in the US over the next four years, Financial Times reports, citing its chief executive Jensen Huang. “Overall, we will procure, over the course of the next four years, probably half a trillion dollars worth of electronics in total”
OTHER
ISRAEL (RTRS): “Israel's military said it intercepted a missile launched from Yemen early on Thursday as hostilities with Iran-backed Houthi militants intensified.”
ISRAEL (BBG): “Israel said it began a limited ground operation in Gaza on Wednesday, with troops returning to some positions outside population centers and officials vowing further pressure unless Hamas releases its 59 remaining hostages.”
NEW ZEALAND (MNI BRIEF): New Zealand’s economy exited recession over Q4, growing 0.7% q/q, 30 basis points higher than expected, and up from Q3’s 1% contraction, data from Stats NZ showed Thursday.
AUSTRALIA (MNI BRIEF): Australia’s unemployment rate held steady at 4.1% over February, in line with expectations, while employment fell by 52,800, lower than the 30,000 jobs expected, data from the Australian Bureau of Statistics showed.
HONG KONG (BBG): “ Hong Kong’s market regulator is planning to cap margin loans used to buy shares at initial public offerings, according to people familiar with the matter, in an effort to clamp down on heated demand from retail investors.”
COPPER (BBG): “Copper marched past its key threshold of $10,000 a ton after weeks of global trade dislocation triggered by President Donald Trump’s push for tariffs on the crucial industrial metal.”
CHINA
LOAN PRIME RATES (MNI BRIEF): China's Loan Prime Rate remained unchanged on Thursday according to a People's Bank of China statement, in line with expectations as some economic indicators reflected a continued recovery.
GRID INVESTMENT (MNI BRIEF): China’s investment in power grid projects totalled CNY43.6 billion during January and February, up 33.5% y/y, data from the National Energy Administration showed on Thursday.
MORTGAGES (SECURITIES DAILY): “Suzhou city has introduced customised mortgage loans to stimulate demand by lowering down payments, interest rates and monthly repayments, Securities Daily reported.”
INCOME (YICAI): “China should increase residents’ disposable income, especially for rural populations and improve social security to boost consumption, said Lian Ping, chairman at the China Chief Economist Forum.”
CHINA MARKETS
MNI: PBOC Net Injects CNY232.6 Bln via OMO Thursday
MNI (BEIJING) - The People's Bank of China (PBOC) conducted CNY268.5 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net injection of CNY232.6 billion after offsetting the maturity of CNY35.9 billion today, according to Wind Information.
- The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.6474% at 09:45 am local time from the close of 1.9604% on Wednesday.
- The CFETS-NEX money-market sentiment index, measuring interbank money-market liquidity, closed at 48 on Wednesday, compared with the close of 60 on Tuesday. A higher reading points to tighter liquidity condition, with 50 representing an equilibrium.
MNI: PBOC Sets Yuan Parity Higher At 7.1754 Thurs; -0.39% Y/Y
MNI (BEIJING) - The People's Bank of China (PBOC) set the dollar-yuan central parity rate higher at 7.1754 on Thursday, compared with 7.1697 set on Wednesday. The fixing was estimated at 7.2348 by Bloomberg survey today.
MARKET DATA
NEW ZEALAND Q4 GDP +0.7% Q/Q; EST. +0.4%; Q3 -1.1%
NEW ZEALAND Q4 GDP -1.1% Y/Y; EST. -1.4%; -1.6%
NEW ZEALAND Q4 S/ADJ EXPENDITURE-BASED GDP +0.8% Q/Q; EST. +0.4%; Q3 -0.9%
AUSTRALIA FEB. EMPLOYMENT -52.8K M/M; EST. +30K; JAN. +30.5K
AUSTRALIA FEB. PART-TIME EMPLOYMENT -17.0K M/M; JAN. -6.5K
AUSTRALIA FEB. FULL-TIME EMPLOYMENT -35.7K M/M; JAN +37.0K
AUSTRALIA FEB. JOBLESS RATE 4.1%; EST. 4.1%; JAN. 4.1%
AUSTRALIA FEB. PARTICIPATION RATE 66.8%; EST. 67.3%; JAN. 67.2%
MARKETS
US TSYS: Futures Extend Post-FOMC Rally, No Cash Bond Dealings In Asia
In today's Asia-Pac session, TYM5 is 111-02+, +0-02+ from closing levels.
- There have been no cash bond dealings in today’s Asia-Pac session with Japan out.
- Yesterday, US tsys surged off pre-FOMC levels after the Federal Reserve held rates steady at 4.25-4.5% while anticipating two 25bp cuts this year.
- Chairman Powell said the Fed is well-positioned to sit tight and wait for policy uncertainty to subside before making any decisions on interest rates. "We are well positioned to wait for greater clarity."
- The Fed also decided to slow the pace at which it is reducing tsy holdings in its balance sheet to a cap of USD5 billion per month from USD25 billion.
- Today’s US calendar will see Q4 Current Account Balance, Weekly Jobless Claims, Philly Fed, Leading Index and Existing Home Sales data.
AUSSIE BONDS: Richer After Jobs Miss, Nov-29 Supply Tomorrow
ACGBs (YM +6.0 & XM +6.0) are sharply richer after today’s February employment report.
- February employment was weaker-than-expected falling 52.8k due to fewer older workers returning, while January was revised down to +30.5k. There has been an increase in retirees in recent months according to the ABS. The number of unemployed also fell and so the unemployment rate was unchanged at 4.1%, while underemployment continued to fall.
- There was a large drop in the participation rate. Jobs data can be volatile and some indicators tightened further, so the RBA will be looking for further evidence of a sustained easing of the labour market.
- No cash US tsys dealings in today's Asia-Pac session with Japan out.
- Cash ACGBs are 6bps richer.
- Swap rates are 5-6bps lower.
- The bills strip bull-flattened further after the data but has given back some of those gains, currently +3 to +7.
- RBA-dated OIS pricing is 2-4bps softer across meetings beyond April after the data. A 25bp rate cut in April is given a 5% probability, with a cumulative 66bps of easing priced by year-end (based on an effective cash rate of 4.09%).
- Tomorrow, the local calendar will be empty apart from the AOFM’s planned sale of A$700mn of the 2.75% Nov-29 bond.
BONDS: NZGBS: Closed Richer Despite GDP Beat, Supply Sees Solid Demand
NZGBs closed near session bests, 4-6bps richer with a flatter 2/10 curve.
- This move came despite Q4 GDP printing stronger than both consensus and the RBNZ projection. Production-based GDP rose 0.7% q/q but was still down 1.1% y/y after -1.1% q/q & -1.6% y/y, while expenditure-based GDP increased 0.8% q/q to be down only 0.4% y/y following Q3’s -0.9% q/q & -1.2% y/y. The recovery was fairly broad-based with 11 of 16 industries seeing growth and most expenditure components rising.
- 25bp rate cuts in both April and May remain likely to support the private sector.
- Today’s NZ Treasury sale of NZ$250mn of the 4.50% May-30 bond, NZ$200mn of the 4.25% May-36 bond and NZ$50mn of the 5.0% May-54 bond showed solid demand. Cover ratios ranged from 4.04x (May-30) to 4.84x (May-54).
- Swap rates closed 2-3bps lower.
- RBNZ dated OIS pricing closed flat to 3bps softer across meetings, with late 2025 leading. 24bps of easing is priced for April, with a cumulative 67bps by November 2025.
- Tomorrow, the local calendar will see Trade Balance data.
- The RBNZ will start the repurchase program of the Sep-25 inflation-indexed bond tomorrow. The operation has no implications for monetary policy stance.
FOREX: AUD & NZD Lower, JPY Edges Higher Despite Higher US Equity Futures
The USD BBDXY index sits slightly lower in the first part of Thursday dealings, the index last close to 1263.5. This has largely reflected modest JPY and CHF gains, while AUD and NZD have been weaker.
- USD/JPY has dipped under Wednesday lows, the pair last near 148.35/40, up around 0.20% in yen terms. Japan markets have been out today, which has impacted liquidity, which has also meant no US cash Tsy trading. US Tsy futures are higher, but volumes haven't been large. CHF is up close to 0.15%, last near 0.8765/70.
- These moves look to be carry over from Wednesday's session, where USD/JPY slumped as the FOMC and Powell's press conference unfolded, with lower cash Tsy yields accompanying the move.
- Earlier data showed NZ's economy moving out of recession, with stronger than forecast Q4 GDP growth. Domestic demand growth remains lacklustre but it seems to have troughed and be gradually turning. NZD/USD initially moved higher, but ran out of steam above 0.5825, we were last 0.5790/95, down by 0.35%. The AUD/NZD cross was supported sub 1.0920, last near 1.0945/50
- AUD/USD is also weaker last near 0.6340/45, off around 0.25% (session lows were at 0.6329). Feb jobs growth fell sharply, but the fall likely overstated the extent of labor market weakness. Labour market indicators that the RBA monitors tightened. The unemployment rate was 4.05% down from 4.11% and underemployment fell 0.1pp to 5.87%, its lowest since August 2008.
- Equity sentiment has been mixed. Hong Kong and China markets have struggled, but US futures are higher. Nasdaq futures are up nearly 0.60%. Positive headlines from Nvidia tech spending plans (via FT). Still, the yen is outperforming higher beta plays like AUD and NZD.
- Later US Q4 current account, jobless claims, March Philly Fed and February existing home sales data print. The ECB’s Lagarde and Lane speak and the BoE is expected to leave rates unchanged. There is also UK labour market data.
ASIA STOCKS: China Stocks Lag Whilst Region Bourses Strong Post Fed.
China’s bourses did their best to try to bring down the mood post Fed whilst regional bourses had a good day. In recent months, the Hang Seng has been buoyed by margin loans to buy shares seeing it rise 22% year to date. However, the regulator may be about to calm time on the activity, planning to cap market loans for IPOs specifically, requiring an initial deposit of 10% from retail investors.
In Taiwan, the high-profile supplier to Nvidia TSMC was up +3.00% today as reports suggest the company will spend an additional US$100bn to procure US-made chips and electronics over the coming years (source: BBG)
- In China the Hang Seng led the falls down by -1.18% following four successive days of solid gains. The CSI 300 followed its lead down -0.40% wiping out the last two days of gains. Shanghai Comp is barely holding on to +0.05% gains whilst Shenzhen is bucking the trend rising +0.21%
- The KOSPI has had a strong week delivering gains each day so far and is up again today by +0.42%.
- Following Tuesday’s disaster requiring a trading halt, the Jakarta Composite is up today by +0.82% to record two successive days of gains.
- In Malaysia the FTSE Bursa Malaysia is fallen again today by -0.35%.
- Other key movers in the region see the FTSE Straits Times of Singapore rising +0.56% for a fourth straight day of gains and the Philippines up +0.19%, following on from yesterday’s gain of +0.45%.
- India’s NIFTY 50 is opening up +0.30% in early trading and on track for a fourth successive day of gains, one of the strongest weeks of the year thus far.
OIL: Crude Higher As Geopolitical Risk Premium Builds
Oil prices are higher during APAC trading driven by heightened geopolitical tensions in the Middle East as Iran-backed Houthis targeted Ben Gurion airport in Tel Aviv. The US has said that it will continue to attack Yemen’s Houthis. Also Russia struck Ukrainian energy infrastructure despite being prepared to agree to an energy ceasefire. Thus oil’s geopolitical risk premium is gradually growing. Benchmarks have also continued to find support from yesterday’s EIA data showing robust US product demand.
- WTI is up 0.6% to $67.31/bbl, close to the intraday high. It fell to $67 early in the session. Brent has exceeded $71 today and is currently 0.5% higher at $71.16/bbl, around its peak. The USD index is down 0.1%.
- Crude markets don’t seem concerned at this point by the Fed’s downward revision to growth and upward to inflation and Chair Powell saying that the outlook is highly uncertain. The decision to slow the pace of QT may have supported risk appetite.
- Chevron had a meeting with US President Trump about its licence to export oil from Venezuela, which was revoked. According to the WSJ, Trump is now considering extending the licence.
- Later US Q4 current account, jobless claims, March Philly Fed and February existing home sales data print. The ECB’s Lagarde and Lane speak and the BoE is expected to leave rates unchanged. There is also UK labour market data.
GOLD: New Highs as China Article Warns on Gold Investing.
- Gold hit new highs overnight as the Federal Reserve remained on hold whilst pointing to higher near-term inflation.
- Fed Chair Powell said the Fed can wait for policy uncertainty to subside before making any decisions on interest rates, while anticipating two 25bp cuts this year (in terms of the dot plot). The Fed also decided to slow the pace at which it is reducing Treasuries holdings in its balance sheet to a cap of USD5 billion per month from USD25 billion previously.
- Gold opened the morning session in Asia at US$3,047.77 and reached a new high of $3,056.12 before giving back some of the gains to be at $3,049.62.
- Gold has exhibited ‘safe-haven’ status behaviour as President Trump’s policies create uncertainty in markets as he threatens tariffs.
- Gold has gained 16% year to date with many forecasters tipping it to go much higher.
- An article in the China Securities Journal has warned investors to be cautious as gold prices are likely to be volatile going forward (source: BBG)
- Russia expanded its gold reserves to record levels, hitting $217.4 billion as of March 1, 2025. The country ranks fifth globally, surpassing China, with gold making up 34.4% of its total foreign exchange reserves. (source: Caspian News)
- Gold’s technicals remain firmly bullish with all major indicators upward sloping.
UP TODAY (TIMES GMT/LOCAL)
| Date | GMT/Local | Impact | Country | Event |
| 20/03/2025 | 0700/0700 | *** |  GB | Labour Market Survey |
| 20/03/2025 | 0700/0800 | ** |  DE | PPI |
| 20/03/2025 | 0800/0900 |  EU | ECB's Lagarde At ECON Hearing | |
| 20/03/2025 | 0830/0930 | *** |  CH | SNB PolicyRate |
| 20/03/2025 | 0830/0930 | *** |  SE | Riksbank Interest Rate Decison |
| 20/03/2025 | 0830/0930 | *** | CH | SNB Interest Rate Decision |
| 20/03/2025 | 0900/1000 |  NO | Q1 Regional Network Survey | |
| 20/03/2025 | 1000/1100 | ** | EU | Construction Production |
| 20/03/2025 | 1100/1100 | ** | GB | CBI Industrial Trends |
| 20/03/2025 | 1200/1200 | *** | GB | Bank Of England Interest Rate |
| 20/03/2025 | 1200/1200 | *** | GB | Bank Of England Interest Rate |
| 20/03/2025 | 1200/1300 | EU | ECB's Lane At UCC Economics Society's Conference | |
| 20/03/2025 | 1200/1200 | GB | Agents summary of business conditions | |
| 20/03/2025 | 1230/0830 | * |  CA | Industrial Product and Raw Material Price Index |
| 20/03/2025 | 1230/0830 | *** |  US | Jobless Claims |
| 20/03/2025 | 1230/0830 | ** | US | WASDE Weekly Import/Export |
| 20/03/2025 | 1230/0830 | ** | US | Philadelphia Fed Manufacturing Index |
| 20/03/2025 | 1230/0830 | * | US | Current Account Balance |
| 20/03/2025 | 1400/1000 | *** | US | NAR existing home sales |
| 20/03/2025 | 1430/1030 | ** | US | Natural Gas Stocks |
| 20/03/2025 | 1530/1130 | ** | US | US Bill 04 Week Treasury Auction Result |
| 20/03/2025 | 1530/1130 | * | US | US Bill 08 Week Treasury Auction Result |
| 20/03/2025 | 1650/1250 | CA | BOC Governor speaks in Calgary | |
| 20/03/2025 | 1700/1300 | ** | US | US Treasury Auction Result for TIPS 10 Year Note |
| 21/03/2025 | 2330/0830 | *** |  JP | CPI |
| 21/03/2025 | 0001/0001 | ** | GB | Gfk Monthly Consumer Confidence |
| 21/03/2025 | 0700/0700 | *** | GB | Public Sector Finances |
| 21/03/2025 | 0745/0845 | ** |  FR | Manufacturing Sentiment |
| 21/03/2025 | 0900/1000 | ** | EU | EZ Current Account |
| 21/03/2025 | 1230/0830 | ** | CA | Retail Trade |
| 21/03/2025 | 1305/0905 | US | New York Fed's John Williams |
