ASIA STOCKS: Stocks Falter into Week's End

China began its economic support today with a range of various measures announced to support the economy, especially in the face of 145% tariffs from the US.  The key PBOC announcement being a 0.10% in the interbank funding rate and a 0.50% reduction in the RRR.  In September the concept of the "national team" was created which effectively is key asset management companies through which support for equity markets will occur. Today sees the addition of two more entities being China Chengtong Holdings, China Reform Holdings and Central Huijin Investment Ltd.  The PBOC also announced two new funding schemes of up to CNY800bn to support the stock market also.

• Markets liked the news with the Hang Seng up +0.49%, CSI 300 +0.48%, Shanghai up +0.65% and Shenzhen up +0.47%.
• In the first day back post holidays, the KOSPI is up also by +0.33%.
• In Malaysia the FTSE Malay KLCI is up +0.42% whilst the Jakarta Composite continues its good run rising +0.90%.
• Singapore’s FTSE Straits Times is higher by just +0.07% and the PSEi in the Philippines is up +1.43% on improving local data.
• As news of the escalation of action between India and Pakistan filters through the market reaction in India has been somewhat muted.  The NIFTY 50 is lower by -0.30%, having fallen -0.33% yesterday.

ACGBs (YM +6.0 & XM +6.5) are stronger and near Sydney session bests on a local data-light session. The local calendar will be empty for the rest of the week.  

• Cash US tsys have twist-flattened, pivoting at the 20-year, with benchmark yields 2bps higher to 1bp lower.
• The FOMC today will be watched closely, MNI Economist - "The FOMC will extend its series of rate holds to a third meeting in May, keeping the Fed funds target rate at 4.25-4.50% while maintaining its forward guidance in the Statement. As the FOMC awaits clarity in both government policy and the data on the degree to which one if not both dual mandate targets will be missed, most participants will continue to support a holding pattern until there is a clearer signal to act."
• Cash ACGBs are 6-7bps richer with the AU-US 10-year yield differential at -4bps.
• The bills strip has bull-flattened, with pricing flat to +8.
• RBA-dated OIS pricing is flat to 7bps softer across meetings today, with mid-2026 leading. A 50bp rate cut in May is given a 4% probability, with a cumulative 107bps of easing priced by year-end.
• The AOFM plans to sell A$700mn of the 2.75% 21 November 2029 bond on Friday.

• As the PBOC announced stimulus measures today, equities got a boost and gold fell.
• Gold is down -1.3% in the Asia trading day at US$3,384.54, having opened at $3,431.60.
• The PBOC announced a range of measures with the key being a 0.10% in the interbank funding rate and a 0.50% reduction in the RRR.
• This comes after US President Trump suggested that China is eager to negotiate due to its 'struggling' economy but emphasized the talks would take place at the right time.
• Another Central Bank reported overnight that their gold reserves are on the increase with the Central Bank of Ghana's gold reserves up by 31 tonnes in March.
• As gold does not pay interest it can be highly sensitive to interest rates as that dictates the borrowing cost to buy gold. Gold markets will watch carefully tonight as the push pull on rates continues with the White House demanding a rate cut and the FED talking more neutral