BONDS: Outperforms $-Bloc Post-Budget Release

Asian equity markets have been mixed in the first part of Tuesday trade, although the major indices are outperforming the sharp cash losses US markets saw in Monday trade. US equity futures re-opened higher this morning in Asia Pac trade, but have only recaptured a fraction of the losses seen on Monday. Eminis were last around +0.35% higher. 

• Japan markets are little changed, with a modest downside bias at this stage. The NKY 225 was off around 0.30%, but still holding above the 34000 level. Yen has continued to rally and is threatening to break through 140.00 against the USD. The Topix is little changed.
• Hong Kong markets have seen volatility, but the benchmark HSI is little changed, last just under 21400. This is within striking distance of recent April highs. The tech sub index is underperforming, down 0.50%. Bellwether China names like Meituan and JD.com have fallen amid reports of greater competition in the food delivery business (per BBG).
• Onshore China bourses are little changed, the CSI 300 holding under 3800.
• The Kospi is up modestly, but the Taiex is down 1.30%, underperforming broader region trends. Trade tensions were a factor weighing on TSMC, amid chip export control concerns
• In South East Asia, Singapore's benchmark index is up around 1.2%. Indonesian stocks are also outperforming, up close to 0.90% for the JCI. 

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• Bank Indonesia (BI) meets on Wednesday April 23 and given recent volatility and USDIDR reaching new highs, it is likely to keep rates unchanged at 5.75%. Only 2 of 27 analysts surveyed by Bloomberg expect a 25bp cut.
• Given its FX stability mandate and IDR underperformance, it is likely to want to watch and wait and use other policy instruments apart from rates. BI continues to intervene in FX markets to support the rupiah but USDIDR is still over 2% higher than the March meeting.
• With inflation well contained, its focus is likely to remain on the currency especially given recent global developments, while it has the option to extend macroprudential policy if increased protectionism impacts growth.
• Confidence indicators turned down in March but remain robust but may deteriorate over coming months given that the US announced a 32% duty on imports from Indonesia. Talks are currently progressing, and Indonesian officials expect them to be completed within 60 days. Finance minister Indrawati said that the tariffs could reduce growth by up to 0.5pp. 

TYM5 has traded slightly lower with a range of 110-22 to 110-27+ during the Asia-Pacific session. It last changed hands at Heading 110-23, down 0.03 from the previous close.

• The US 10-year yield is unchanged, dealing around 4.41%
• The US 2-year yields is unchanged, dealing around 3.77%
• Risk has turned lower with concerns President Trump will fire Fed Chairman Jerome Powell adding to a market that is already consumed with uncertainty. 
• “President Donald Trump warned the US economy may slow if the Federal Reserve doesn’t move to immediately reduce interest rates.”(per BBG)
• Dips back towards 4.25% support in US 10-years have found sellers first up as US yields continue to rise on fears of a rotation out of US assets.
• Data/Events : The IMF releases its World Economic Outlook, Fed Vice Chair Philip Jefferson as well as regional Fed chiefs Tom Barkin (Richmond), Neel Kashkari (Minneapolis) and Patrick Harker (Philadelphia) are scheduled to speak later Tuesday