MNI EUROPEAN OPEN: BoJ Unchanged As Expected
EXECUTIVE SUMMARY
- PUTIN AGREES TO 30-DAY HALT ON ENERGY FACILITY STRIKES BUT NO FULL UKRAINE CEASEFIRE - RTRS
- UK DEC-FEB MEDIAN PAY AWARDS +3%: BRIGHTMINE - MNI
- BOJ HOLDS RATE AT 0.50%, EYES TRADE POLICIES - MNI BRIEF
- BOJ KEEPS ECONOMIC, MAJOR COMPONENTS VIEW - MNI BRIEF
- CHINA-GERMANY TO DEEPEN GREEN COOPERATION - MNI BRIEF
Fig 1: BoJ Market Pricing Outlook
Source: MNI - Market News/Bloomberg/Refinitiv.
UK
WAGES (MNI): Brightmine median pay awards in the 3 months to February remained at 3.0%, the third consecutive monthly reading where pay awards have remained at the lowest level since December 2021.
POLITICS (BBC): “The government has unveiled sweeping changes to the benefits system, aimed at saving £5bn a year by 2030. Work and Pensions Secretary Liz Kendall said the overhaul would create a more "pro-work system" to encourage people to take up jobs, while protecting those who cannot work.”
TRADE (BBC): “US tariffs on imported steel and aluminium have "spooked" customers of British steel, according to Tata Steel UK. Tata Steel operates the UK's largest steelworks in Port Talbot and exports around $100m (£77m) of steel annually to the USA.”
EU
RUSSIA/UKRAINE (RTRS): “ Russian President Vladimir Putin agreed on Tuesday to stop attacking Ukrainian energy facilities temporarily but declined to endorse a full 30-day ceasefire that President Donald Trump hoped would be the first step toward a permanent peace deal.”
RUSSIA (POLITICO): “As United States President Donald Trump pushes ceasefire talks with Russia, top European officials gathering for a security conference on the other side of the world warned that Vladimir Putin isn’t actually interested in any meaningful peace deal.”
DEFENCE( MNI BRIEF): The European Union will prioritise investment in European firms to help develop an industrial base, European Commission president Ursula Von der Leyen said in a speech in Copenhagen on Tuesday.
RUSSIA (ECONOMIST): “Russia appeared keen to please the hosts of the Raisina Dialogue, India’s premier geopolitics conference, which ends on Wednesday. Ahead of the event, the Kremlin paid for billboards across Delhi emblazoned with images of Narendra Modi, India’s prime minister, and Russia’s president, Vladimir Putin. The pair are “side by side” in “driving global change”.”
UKRAINE (POLITICO): “In a joint letter obtained by POLITICO on Tuesday, top diplomats from Sweden, Finland, Denmark, Latvia, Lithuania and Estonia called on Brussels to produce “concrete proposals on how to decisively advance Ukraine’s accession process.””
UKRAINE (POLITICO): “Ukrainian President Volodymyr Zelenskyy is visiting Finland to meet top leadership in Helsinki, at a delicate point in Kyiv’s defense against Russia’s full-scale invasion.”
EU (POLITICO): “The European Parliament's reforms in the wake of the cash-for-influence Qatargate scandal helped it identify alleged Huawei corruption earlier, Parliament President Roberta Metsola said Tuesday evening.”
GERMANY (POLITICO): ““If one day a just and secure peace [with Ukraine] is established, then we should also be able to discuss purchasing Russian gas again,” said Jan Heinisch, a politician with the conservative Christian Democratic Union (CDU) and a negotiator in his party’s federal coalition talks with the center-left Social Democratic Party.”
GERMANY (POLITICO): “The German foreign office informed Chancellor Olaf Scholz’s office and other ministries Monday of its intention to propose Baerbock for the post of U.N. General Assembly president, according to domestic media outlets including Spiegel and dpa.”
FRANCE (POLITICO): “France will modernize one of the country's main air bases so it can host nuclear weapons, French President Emmanuel Macron announced Tuesday.”
TURKEY (POLITICO): “The political future of Turkish President Recep Tayyip Erdoğan’s main rival, İstanbul Mayor Ekrem İmamoğlu, has been thrown into jeopardy after his university diploma was annulled on Tuesday.”
US
FED (MNI INTERVIEW): Fed Standing Pat, Awaiting Clarity - English
DATA (MNI INTERVIEW): Concerns Mount Over US Data Reliability -Wilcox
GOVERNMENT (RTRS): “ President Donald Trump fired two Democratic commissioners at the U.S. Federal Trade Commission on Tuesday, in another major test of the independence of regulatory agencies.”
GOVERNMENT (RTRS): “U.S. Chief Justice John Roberts rebuked President Donald Trump on Tuesday for urging the impeachment of a federal judge, laying bare tensions between the country's chief executive and the judiciary as Trump's sweeping assertions of power run into judicial roadblocks.”
OTHER
JAPAN (MNI BRIEF): The Bank of Japan board on Wednesday unanimously decided to keep the unsecured overnight call loan rate at 0.50%, noting it would watch trade and other policies amid high uncertainties.
JAPAN (MNI BRIEF): The Bank of Japan maintained its view that Japan’s economy is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to strengthen moderately, following the Board's decision Wednesday to hold the Policy Rate at 0.5%.
JAPAN (MNI BRIEF): Japan’s exports posted their fifth straight rise in February, up 11.4% from January's 7.3% driven by higher automobile shipments, which grew 2.9 percentage points to 13.4%, data released by the Ministry of Finance showed on Wednesday showed.
SOUTH KOREA (BBG): “South Korean government will mobilize all available means to block factors that cause housing price increase, including property-related regulations and finance, Acting President Choi Sang-mok says in a meeting.”
CHINA
MONETARY POLICY (CSJ): “China is set to deploy a set of monetary tools to support economic recovery after its central bank governor recently indicated that there’s still room for reserve requirement ratio cuts, according to a report by China Securities Journal Wednesday, citing analysts.”
BONDS (SECURITIES TIMES): “China’s 30-year treasury bond futures hit the lowest this year on Tuesday as the market lowers its expectations of the pace of monetary policy easing, according to a report by Securities Times Wednesday.”
CHINA/GERMANY (MNI BRIEF): China and Germany will continue deepening cooperation in energy efficiency and climate change this year, the National Development and Reform Commission announced on Wednesday, citing a recent meeting with German counterparts.
LPRs (MNI BRIEF): "China's Loan Prime Rate is likely to remain unchanged this month as the economy continues to recover, although authorities will likely ease policy later in the year to consolidate momentum and target key sectors, such as the stock market and technology sector."
TECH (SHANGHAI SECURITIES DAILY): "China’s AI and tech sector-led stock market recovery was further consolidated by rising consumption and financial stocks since March, a trend expected to continue fuelling asset revaluation going forwards, Shanghai Securities News reported"
CHINA MARKETS
MNI: PBOC Net Injects CNY120.5 Bln via OMO Wednesday
MNI (BEIJING) - The People's Bank of China (PBOC) conducted CNY295.9 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net injection of CNY120.5 billion after offsetting the maturity of CNY175.4 billion today, according to Wind Information.
- The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.7622% at 09:46 am local time from the close of 1.9609% on Tuesday.
- The CFETS-NEX money-market sentiment index, measuring interbank money-market liquidity, closed at 60 on Tuesday, compared with the close of 50 on Monday. A higher reading points to tighter liquidity condition, with 50 representing an equilibrium.
MNI: PBOC Sets Yuan Parity Lower At 7.1697 Weds; +0.09% Y/Y
MNI (BEIJING) - The People's Bank of China (PBOC) set the dollar-yuan central parity rate lower at 7.1697 on Wednesday, compared with 7.1733 set on Tuesday. The fixing was estimated at 7.2223 by Bloomberg survey today.
MARKET DATA
NEW ZEALAND Q4 CURRENT ACCOUNT DEFICIT NZ$7.04B; EST. -NZ$6.65B; Q3 –NZ$10.84B
NEW ZEALAND CURRENT ACCOUNT DEFICIT 6.2% OF GDP IN 12 MTHS TO DEC.; EST. -6.1%; Q3 -6.5%
NEW ZEALAND WESTPAC CONSUMER CONFIDENCE Q1 89.2; Q4 97.5
AUSTRALIA FEB. WESTPAC LEADING INDEX +0.07% M/M; JAN. +0.10%
JAPAN FEB. EXPORTS +11.4% Y/Y; EST. 12.6%; JAN. +7.3%
JAPAN FEB. IMPORTS -0.7% Y/Y; EST. 0.8%; JAN. +16.2%
JAPAN FEB. TRADE BALANCE +Y584.5B; EST. +Y688.3B; JAN. -Y2736.6B
JAPAN FEB. ADJUSTED TRADE SURPLUS Y182.26B; EST. +Y491.5B; JAN. –Y601.3B
JAPAN JAN. CORE MACHINE ORDERS -3.5% M/M; EST. -0.1%; DEC. -0.8%
JAPAN JAN. CORE MACHINE ORDERS +4.4% Y/Y; EST. +6.6%; DEC. +4.3%
JAPAN FINAL JAN. INDUSTRIAL OUTPUT -1.1% M/M; DEC. -0.3%
JAPAN FINAL JAN. INDUSTRIAL OUTPUT +2.2% Y/Y; DEC. +2.6%
JAPAN JAN. CAPACITY UTILIZATION +4.5% M/M; DEC. -0.2%
MARKETS
US TSYS: Cash Bonds Slightly Cheaper Ahead Of FOMC Decision
In today's Asia-Pac session, TYM5 is 110-22+, -0-03 from closing levels.
- Yesterday, TYM5 traded 110-14 low/110-29 high, still inside initial technical levels according to MNI’s technicals team: resistance above at 111-25 (Mar 11 high), support below at 110-12.5/110-00 (Low Mar 6 & 13 / High Feb 7).
- Cash US tsys are flat to 1bp cheaper, with a steepening bias, in today’s Asia-Pac session.
- The focus remains on Wednesday's FOMC policy announcement. The majority of analysts expects the FOMC to leave its Dot Plot funds rate medians unchanged in March compared with the December meeting. That would imply the Fed is still pencilling in 50bp of cuts in 2025 (to 3.9%) and 2026 (to 3.4%), with a further 25bp cut in 2027 (to 3.1%).
- Yesterday, projected rate cuts through mid-2025 closed steady to softer vs. yesterday morning’s levels (*) as follows: Mar'25 steady at -2bp, May'25 at -5.4bp ( -6bp), Jun'25 at -18.2bp (-19.7bp), Jul'25 at -26.7bp (-28.7bp).
JGBS: No Change Decision By BoJ As Expected, Holiday Tomorrow
In Tokyo afternoon trading, JGB futures are weaker and near session lows, -18 compared to the settlement levels, after the BoJ Policy Decision announcement.
- The BoJ left rates unchanged at 0.50%, as widely expected by sell-side economists and financial market pricing. The decision was unanimous, with a 9-0 vote.
- The BoJ left the door clearly ajar for further policy adjustments. It stated that price trends are likely to move in line with its 2% goal in the second half. In particular, the central bank noted that the virtuous cycle of wages and prices was intensifying. This in turn should keep output above potential.
- Still, it noted high uncertainties in terms of the outlook for economic activity and prices.
- Cash US tsys are ~1bp cheaper in today’s Asia-Pac session ahead of today’s FOMC policy decision. The majority of analysts expect the FOMC to leave its Dot Plot funds rate medians unchanged in March compared with the December meeting.
- Cash JGBs are flat to 2bps cheaper across benchmarks. The benchmark 10-year yield is 1.0bp higher at 1.517% versus the cycle high of 1.58%.
- Swap rates are 1-2bps higher. Swap spreads are wider.
- Tomorrow, the local calendar will be closed for the Vernal Equinox Day holiday.
AUSSIE BONDS: Subdued Session Ahead Of FOMC Decision & Jobs Data
ACGBs (YM -1.0 & XM -1.5) are slightly weaker, with dealings muted ahead of the FOMC decision (tomorrow morning local time) and the February Employment Report.
- Cash US tsys are ~1bp cheaper in today’s Asia-Pac session.
- Cash ACGBs are 1-2bps cheaper with the AU-US 10-year yield differential at +12bps.
- Swap rates are flat to 1bp higher.
- The bills strip is -1 to -2.
- RBA-dated OIS pricing is flat to 4bps firmer across meetings today, with Dec-25 leading. A 25bp rate cut in April is given a 4% probability, with a cumulative 62bps of easing priced by year-end (based on an effective cash rate of 4.09%).
- Tomorrow, the local calendar will see February jobs data. It will be scrutinised closely, especially as the RBA said that the tight labour market was the strongest argument to leave policy on hold in February.
- It is also a key reason why “the Board remains cautious on prospects for further policy easing”, as the labour market “tightened a little further in late 2024” and could be signalling the economy is stronger than assumed. The RBA is also focused on the underemployment & youth unemployment rates and changes in hours worked.
BONDS: NZGBS: Closed On A Strong Note Ahead Of FOMC Policy Decision
NZGBs closed on a strong note, with benchmark yields 3-4bps lower.
- Outside of the previously outlined current account deficit and consumer confidence data, there hasn't been much by way of domestic drivers to flag.
- The NZGB 10-year has outperformed its $-bloc counterparts, with the NZ-US and NZ-AU yield differentials 4-5bps wider.
- Cash US tsys are ~1bp cheaper in today’s Asia-Pac session ahead of the FOMC policy decision tomorrow morning local time.
- Swap rates closed 3-5bps lower, with the 2s10s curve steeper.
- RBNZ dated OIS pricing closed flat to 4bps softer, with February 2026 leading. 24bps of easing is priced for April, with a cumulative 64 bps by November 2025.
- Tomorrow, the local calendar will see Q4 GDP alongside the NZ Treasury’s planned 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.
- The RBNZ will start the repurchase program of the Sep-25 inflation-indexed bond on March 21. The operation has no implications for monetary policy stance.
FOREX: USD Index Edges Up, Yen Steady Post BOJ, FOMC Later
The USD BBDXY index sits slightly higher in the first part of Wednesday dealings, last near 1263.1. We are still close to recent multi-month lows at 1261.15. Today's gain is around 0.10% at this stage.
- Today's main focus has been the BOJ decision, but as widely expected, the central bank left rates on hold at 0.50%. The statement appeared balanced, in that the door was left firmly ajar for further hikes (virtuous wage and price cycle was described as intensifying), but significant uncertainty around the economic outlook was also highlighted (particularly from a trade standpoint). We have Ueda's press conference in just under 2 hours.
- USD/JPY was last near 149.55, slightly up on end Tuesday levels, with ranges of 149.20/64 so far. We had earlier data on trade and machine orders. The trade position moved back into surplus, while machine orders were weaker than forecast. Sentiment in the FX space didn't shift though. broadly USD/JPY is wedged between key support and resistance levels.
- NZD/USD has ticked down, back to 0.5810, off close to 0.20%. Q1 Westpac consumer confidence fell to 89.2 from 97.5, the weakest since Q2 2024 which is before the RBNZ began easing. The Q4 current account deficit was slightly wider than expected at $7.037bn but significantly narrower than Q3’s $10.84bn. Note tomorrow we get Q4 GDP. Upside focus for the currency is at 0.5860, the 200-day EMA. The 100-day at 0.5765 may act as downside support.
- AUD/USD has also edged down a touch, last near 0.6355/60. The currency remains sub key resistance at 0.6409, the Feb 21 high and bull trigger.
- In the cross asset space, US equity futures are slightly higher, but away from best levels. US Tsy yields have ticked up, the 10yr back to 4.295%, up a little over 1bps.
- Later the Fed’s decision is announced and includes updated projections and Chair Powell’s press conference. No change in rates is widely expected. The ECB’s de Guindos and Elderson speak later and February euro area CPI data print.
ASIA STOCKS: A Mixed Day as Indonesia Bounces Back.
Following a disastrous day for the Jakarta Composite yesterday, attempts by authorities to stabilize things appear to be working as it posts some solid gains whilst bourses around the region are mixed.
- Yesterday in Indonesia the Jakarta Composite fell by -6.8% at one stage, sufficient to see a trading halt before recovering to finish just -3.8% down. The intervention, along with intervention in the currency markets has calmed investors and the index is up by +1.00% today.
- China’s bourses are mixed with the Hang Seng holding on to slender gains up +0.15%, the CSI 300 +0.05 whilst the Shanghai Comp fell -0.06% and Shenzhen is down -0.20%.
- The KOSPI was one of the other strong performers today up +0.78%, following and on track to deliver three successive days of gains.
- Malaysia’s FTSE Malay KLCI fell by -0.64% today, having enjoyed three straight days of gains.
- Singapore’s FTSE Straits Times is up +0.50%, the Philippines +0.20% whilst Taiwan is the worst performer in the region, down by -1.11%.
- As India’s NIFTY 50 starts it’s trading day up marginally, it follows on from yesterday’s very strong performance gaining +1.45%
OIL: Crude Slightly Lower Ahead Of The Fed & EIA Inventory Data
Oil prices are moderately lower during APAC trading today after falling around a percent on Tuesday. It has been pressured by softer risk appetite and US industry data pointing to another crude stock build. Hopes of a Ukraine peace deal have also pressured prices, but with Russia’s president Putin only agreeing to a partial ceasefire, an end to the war and sanctions is likely some way off.
- WTI is down 0.4% to $66.64/bbl off the intraday low of $66.58. Brent is 0.3% lower at $70.36/bbl following a trough of $70.22. The USD index is up 0.1%.
- Moves today have been muted as markets wait for the Fed decision. The impact of increased protectionism on global growth has been worrying crude and a hawkish or very concerned Fed would add to that.
- Geopolitical risks persist with not just the Russian/Ukraine situation but rising tensions in the Middle East with the end of the Gaza ceasefire and the US targeting rebel Houthis in Yemen and saying it will blame Iran if any Red Sea shipping is attacked. It has also said it will tighten sanctions on Tehran.
- Bloomberg reported that there was a US crude inventory build of 4.59mn barrels last week, according to people familiar with the API data. However, there was a product stock drawdown of 1.71mn barrels for gasoline and 2.15mn for distillate. The official EIA data is out today.
- Later the Fed’s decision is announced and includes updated projections and Chair Powell’s press conference. No change in rates is widely expected (see MNI Fed Preview).
- The ECB’s de Guindos and Elderson speak later and February euro area CPI data print.
Gold Consolidates with Eye on Middle East.
- Israel launched attacks at Hamas officials overnight ending a tenuous cease fire with a vow from the Israeli PM to “act with increasing military strength.”
- The insatiable demand for gold had seen the precious metal break through the US$3,000 barrier this week and the overnight news spurred it even higher.
- As key global investments banks and asset managers around the world race to increase their forecasts for gold’s peak this year the risk could be that the price gets there sooner rather than later.
- Gold opened the trading day at $3,034.63 selling off initially down to $3,027.48 before rallying up to $3,030.01.
- It then gave back some of those gains to settle at $3,036.17
- Gold is up +1.75% this week already, following on from last week’s strongest weekly rally of the year.
- Up over 16% year to date, the range on forecasters predictions currently are from $3,200 to $3,500.
UP TODAY (TIMES GMT/LOCAL)
| Date | GMT/Local | Impact | Country | Event |
| 19/03/2025 | 0430/1330 | ** |  JP | Industrial Production |
| 19/03/2025 | 1000/1100 | *** |  EU | HICP (f) |
| 19/03/2025 | 1100/0700 | ** |  US | MBA Weekly Applications Index |
| 19/03/2025 | 1200/1300 | EU | ECB de Guindos In Madrid | |
| 19/03/2025 | 1300/1400 | EU | ECB Elderson At European Financials Conference | |
| 19/03/2025 | 1430/1030 | ** | US | DOE Weekly Crude Oil Stocks |
| 19/03/2025 | 1800/1400 | *** | US | FOMC Statement |
| 19/03/2025 | 2000/1600 | ** | US | TICS |
| 20/03/2025 | 2145/1045 | *** |  NZ | GDP |
| 20/03/2025 | - |  CH | Swiss National Bank Meeting | |
| 20/03/2025 | 0030/1130 | *** |  AU | Labor Force Survey |
| 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 |
