EM ASIA CREDIT: Q1 Results: Indofood CBP (ICBPIJ, Baa2/NR/BBB- Pos.) - Solid

AUD and NZD are underperforming so far in Tuesday trade, albeit with modest losses. EUR, JPY and CHF have all ticked up, but recent ranges are holding. The BBDXY USD index was last little changed near 1274. 

• US equity futures have tracked lower after re-opening. Eminis were last off around 0.50%, while Nasdaq futures were down 0.70%. The SPX did rise in Monday trade, but month end/qtr end flows may have played a role.
• Market sentiment remains skittish ahead of tomorrow's liberation day/reciprocal tariff announcement in the US. Trump made remarks earlier from the oval office, but few fresh details were released.
• AUD/USD was last near 0.6230/35, off around 0.20%. Monday intra-session lows were just under 0.6220. Retail sales printed a short while ago and were just under market forecasts (0.2%m/m, versus 0.3% forecast). We have the RBA decision later, but no change is expected.  
• NZD/USD is last at 0.5665/70, off by a similar amount. Monday lows were close to 0.5650 in this pair.
• USD/JPY is ticking down, last near 149.65/70, around 0.20% stronger in terms. Still this is around 100pips above intra-session lows from Monday. Japan's labor market remains tight, given the downtick in the unemployment rate. The Q1 Tankan results painted a resilient picture, but survey results were likely taken ahead of recent auto tariff announcements by the US (per the BoJ).
• US yields are ticking up slightly in the first part of Tuesday trade.
• Coming up we have the China Caixin PMI out, then later the RBA decision. 

In Tokyo morning trade, JGB futures are weaker, -24 compared to settlement levels.

• Japan's jobless rate for Feb ticked down to 2.4%, versus a 2.5% forecast and 2.5% (which was also the prior outcome). This puts the jobless rate back at 2024 lows, which were fresh cycle lows back to late 2019. This indicates a still tight labour market for Japan.
• The job-to-applicant ratio painted a less positive picture though. It eased to 1.24, versus a 1.26 forecast and prior 1.26 outcome.
• Japan's Q1 Tankan survey presented mixed results. The headline for large manufacturing was +12, in line with forecasts, but down from the Q4 read of +14. The outlook was above expectations though at +12 (+9 was forecast and prior was +13). Non-manufacturing for large firms was better for Q1 but the outlook was slightly below. The large industry capex estimate was 3.1%, close to the 3.2% forecast, but well off Q4's pace of 11.3%. For smaller firms, outcomes were mostly above expectations.
• Cash US tsys are slightly cheaper in today’s Asia-Pac session after yesterday’s modest gains.
• Cash JGBs are flat to 2.5bps cheaper, with a steepening bias, across benchmarks. The benchmark 10-year yield is 2bp-s higher at 1.51% versus the cycle high of 1.596%.
• Swap rates are 1bp lower to 1bp higher. Swap spreads are mostly tighter.

February retail sales were slightly weaker than expected rising 0.2% m/m after 0.3% with annual growth moderating 0.2pp to 3.6%. Looking through volatility from seasonal discounting, retail spending is in line with rates seen since October but 3-month momentum has slowed. The pickup in consumer confidence from lower inflation & rates should support the upward trend in retail spending going forward.

Australia retail sales vs consumer confidence

• February’s growth was driven by department stores (+1.5% m/m & 5.6% y/y), the fifth consecutive month of non-negative outcomes, and food retailing (+0.6% m/m & 3.0% y/y). Restaurants rose 0.2% m/m & 3.7% y/y. Spending on household goods and other sectors both contracted following heavy discounting in Q4.
• Most states & territories saw growth in sales in February except Tasmania and Queensland.
• In July, retail sales will be replaced by the household spending series. The February data for this print on Friday and the headline is forecast to rise 0.3% m/m & 3.2% y/y after 0.4% & 2.9%. 

Australia retail sales $mn