Rearview Macro data largely irrelevant to markets amid tariff and trade uncertainty

Asia Market Update: Rearview Macro data largely irrelevant to markets amid tariff and trade uncertainty; ECB Rate Decision tonight; JP CPI tomorrow.

General trend

- Asian equities largely positive [Hang Seng outpeforming] on another day where the markets appear to only have ears for trade developments.

- A White House fact sheet stated that some products from China now face up to a 245% tariff on imports, with an extra potential 7.5% to 100% tariff imposed, depending on the item, on top of the reciprocal 125% and 20% Fentanyl rates.

- China reiterated it would ignore such “number games”, while reportedly the China govt is open to trade talks with the US, if the US “shows consistency and respect”. China also said to want a clear US point person to work with. The overture comes as PDD's Temu and also Shein said to have surge in sales ahead of the US $800 de minimis import exemption ending on May 2nd.

- Japan trade rep Akazawa met with Pres Trump, Treas Sec Bessent, Commerce’s Lutnick and USTR Greer; Trump said ‘Big Progress’ had been made, and underscored the importance he is personally giving the Japan trade talks by giving 50 minutes to Akazawa prior to Akazawa meeting the full US Trade team for a further 75 minutes. A second meeting is planned for April, while Akazawa said the US side wants a deal within the 90 day period. Notably, FX was not discussed today.

- USD/JPY today bounced a Big Figure off of the precise low it reached on Aug 5th when USD/JPY plunged to 141.6. This seemed to have significantly more effect on JPY today than later trade comments by Akazawa or Gov Ueda and Board member Nakagawa. Both BOJ member’s comments largely in line although Ueda re-emphasized that keeping low rates even as inflation is accelerating could result in the BOJ being forced to hike rapidly. Meanwhile 70% of Japanese companies in a survey said they were mulling price hikes in FY25/26.

- Slightly better than expected March trade balance figures for Japan saw increased exports to Asia and US but a nearly 5% fall to China.

- The probability of a May BoJ rate hike of 25bp is now down to 0%, vs 2% yesterday. Somewhat notably this is on top of the gap in demand for 30-year JGBs reported back on Monday, and today’s 12-month bills and liquidity enhancement auctions today saw markedly lower bid-to-covers.

- The Bank of Korea (BOK) held rates, with Gov Rhee revealing the rate decision was not unanimous; However, all of the 6 board members are open to a rate cut in the next 3 months.

- Australian jobs improved, but by less than expected while the unemployment rate ticked down slightly.

- New Zealand hotter than expected Q1 CPI, with Index Non-Tradeables +4.0% y/y. The largest contributor was rent, up 3.7%. Meanwhile the RBNZ’s Q1 Sectoral Factor inflation model hit an almost four-year low,

- Aussie miner BHP reported no change to guidance despite cyclone Alfred in Feb, while Pilbara Minerals blamed missing volumes on the cyclone, but also reaffirmed guidance.

- US equity FUTs +0.7% to +0.8% during Asian trading.

Looking ahead (Asian-weighted news, using Asian time zone)

- Thu 16th (Thu eve ECB Rate Decision).

- Fri 17th JP Mar National CPI.

- Sat 18th CN Mar FDI.

Holidays in Asia this week

- Mon Apr 14th India, Thailand.

- The Apr 15th Thailand.

- Thu Apr 17th Philippines.

- Fri Apr 18th Australia, Hong Kong, India, Indonesia, New Zealand, Philippines, Singapore.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens flat at 7,757.

- AUSTRALIA MAR EMPLOYMENT CHANGE: +32.2K V +40.0KE; UNEMPLOYMENT RATE: 4.1% V 4.2%E.

- BHP Reports Q3 WAIO Iron Ore production 67.8Mts v 68.1Mts y/y; FY production guidance unchanged.

- NEW ZEALAND Q1 CPI Q/Q: 0.9% V 0.8%E; Y/Y: 2.5% V 2.4%E.

- Reserve Bank of New Zealand (RBNZ) Q1 Sectoral Factor Model Inflation Index Y/Y: 2.9% v 3.1% prior [almost four-year low].

- RBNZ Assistant Gov Simone Robbers to 'leave' at the end of May [reason not initially disclosed]; RBNZ is consulting on a new structure for the executive leadership team.

- New Zealand sells total NZ$500M vs. NZ$500M indicated in 2029, 2036 bonds.

China/Hong Kong

- Hang Seng opens flat at 21,066; Shanghai Composite opens -0.4% at 3,261.

- China Mar Swift Global Payments (CNY): 4.1% v 4.3% prior.

- China: MOFCOM, MIIT and PBOC official to attend Mon [Apr 21st] briefing; the briefing is expected to focus on expanding the services sector.

- China car parts makers 'impacted' by US tariffs, notes these cos. can increase production in the US to reduce the impact - Economic Info Daily.

- China reiterates to accelerate the issuance of special sovereign bonds - China Securities Times.

- China Ministry of Foreign Affairs (MOFA): If US continues to play a "numbers game" on US tariffs, China will pay no attention - financial press.

- Traders re-circulating White House fact sheet from last night stating that China now faces up to a 245% tariff on imports to the United States as a result of its retaliatory actions.

- CHINA GOVT REPORTEDLY OPEN TO TRADE TALKS WITH US; WANTS PRES TRUMP TO REIN IN CABINET MEMBERS AND SHOW CONSISTENCY AND RESPECT – PRESS [overnight update].

- China Vice Premier He Lifeng: Vows more support for foreign trade; will ignore "numbers game" by US; Reiterates to fight till the end if interests are harmed.

- Hutchison (1.HK):(US) Reportedly buyers discuss separating Panama ports from Hutchison ports deal; Revamping ports deal with Blackrock would require newagreement – WSJ.

- Former editor-in-chief and Chinese Communist Party Committee Secretary of Global Times Hu Xijin: China and the US are locking horns. It's highly likely that China will retaliate by cutting off rare earth supplies to the US. By the way, China is now capable of producing its own GPUs. Stimulated by the new US regulations, our GPU technology will progress rapidly. The US should start thinking about how to handle its upcoming rare earth crisis.

- Unit Temu and also Shein said to have surge in sales ahead of US de minimis exemption ending on May 2nd - financial press.

- AMD: Confirms US govt export license required for MI308 products bound for China (incl. HK and Macau) may result in up to ~$800M in inventory charges, purchase commitments and related reserves – filing.

- China PBOC sets Yuan reference rate: 7.2085 v 7.2133 prior.

- China PBOC Open Market Operation (OMO): Injects CNY246B in 7-day reverse repos; Net injects CNY180B v drains CNY15B prior.

Japan

- Nikkei 225 opens flat at 33,951.

- JAPAN MAR TRADE BALANCE: ¥544.1B V ¥464.9BE.

- Japan releases weekly flows data [period ended Apr 11th]: Foreign buying of Japan equities: ¥1.04T v +¥1.78T prior; Japan buying of foreign bonds: -¥512.0B v -¥2.57T prior.

- Japan's Econ Revitalization Min Akazawa: Had (trade) talks with Pres Trump, Bessent, Lutnick, Greer; Grateful that Trump met with me directly - financial press.

- Japan PM Ishiba: Econ Revitalization Min Akazawa reported to me that 'constructive talks' were held with the US - financial press.

- US Pres Trump said to have raised Japan taking on more defense costs at meeting with Japan Econ Revitalization Min Akazawa - Japanese press.

- Bank of Japan (BOJ) Nakagawa: Reiterates to raise rates if economic outlook is realised - prepared speech in Gunma.

- Japan BOJ Gov Ueda: Reiterates Japan's economy is recovering moderately, albeit with some weak signs - parliamentary testimony.

- Japan sells ¥3.2T vs. ¥3.2T indicated in 12-Month Bills; Avg Yield: 0.5292% v 0.6184% prior; bid-to-cover: 2.78x v 3.71x prior.

- Japan MOF sells ¥650B v ¥650B indicated in JGBs in liquidity enhancement auction; bid-to-cover: 2.39x v 2.85x prior.

- 70% of Japanese companies mulling price hikes in FY25/26 - financial press survey.

- Follow up: Japan govt reportedly drops its plan for tariff cash handouts - Japanese press.

- US Pres Trump: Has met with the Japanese Delegation of Trade - Truth Post.

- Japan's Econ Revitalization Min Akazawa to meet with US Pres Trump ahead of trade talks – press.

- (CN) Japan govt pension fund (GPIF) switches its foreign equities benchmark to exclude Chinese domestic shares.

- *(US) PRES TRUMP: JAPAN IS COMING IN TODAY TO NEGOTIATE TARIFFS, THE COST OF MILITARY SUPPORT, AND “TRADE FAIRNESS”; HOPEFULLY SOMETHING CAN BE WORKED OUT.

- Reportedly there is no consensus within BOJ on extent of Trump tariff damage; BOJ to cut fiscal 2025 growth forecast from current 1.1% forecast in quarterly report due on May 1st – press [overnight update].

Korea

- Kospi opens +0.2% at 2,451

- BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 2.75%; AS EXPECTED.

- Bank of Korea (BOK) Gov Rhee: Rate decision was not unanimous; Apr exports slowed, showing 'weak' momentum - post-rate decision press conference.

- Follow up: South Korea Fin Min Choi: South Korea is in 'no rush' to talk with US on tariffs - financial press
[overnight update].

Other Asia

- Singapore Mar Non-Oil Domestic Exports Y/Y: 5.4% v 13.6%e.

- (MY) China President Xi ‘encourages’ Chinese enterprises to invest in Malaysia; China welcomes additional Malaysia agricultural products – Xinhua [overnight update].

North America

- FNMA, FHFA Director Pulte: Fannie Mae, Freddie Mac to 'evaluate how to recall loans' - financial press.

- (US) Fed's Schmid (voter; hawk): There is a lot of nervousness in the agricultural sector from tariffs - financial press.

- Nvidia: Follow Up: Says it follows exports laws 'to the letter' - CNBC.

- *(US) FEB TOTAL NET TIC FLOWS: +$284.7B V -$48.8B PRIOR; NET LONG-TERM TIC FLOWS: $112B V -$45.2B PRIOR.

- (US) MBA Mortgage Applications w/e Apr 11th: -8.5% v 20.0% prior.

- (US) REPORTEDLY US IN TALKS WITH YEMENI FORCES ON LAND OFFENSIVE AGAINST HOUTHIS - PRESS.

- (US) MAR ADVANCE RETAIL SALES M/M: 1.4% V 1.4%E; RETAIL SALES (EX AUTO) M/M: 0.5% V 0.4%E.

- (US) Apr New York Fed Services Business Activity: -19.8 v -12.1e.

- (US) MAR INDUSTRIAL PRODUCTION M/M: -0.3% V -0.2%E; CAPACITY UTILIZATION: 77.8% V 77.9%E.

- (CA) BANK OF CANADA (BOC) LEAVES INTEREST RATES UNCHANGED AT 2.75%; AS EXPECTED; Expect tariffs and supply chain disruptions to push up some prices.

- (US) APR NAHB HOUSING MARKET INDEX: 40 V 38E.

- (US) Fed's Hammack (non-voter for 2025): If job market holds and inflation rises, more restrictive policy path is needed - speech text.

- (US) FED CHAIR POWELL: INFLATIONARY EFFECTS OF TARIFFS MAY BE MORE PERSISTENT; SO FAR LARGER-THAN-EXPECTED TARIFFS LIKELY MEAN HIGHER INFLATION, SLOWER GROWTH - SPEECH TEXT.

- (US) Fed Chair Powell: Effects of administration's policies will likely move Fed away from its goals; Will be moving away from Fed goals for the balance of this year; Not close to the point where Fed would stop balance-sheet runoff.

- (US) Treasury Sec Bessent: US ready to use maximum pressure to get Iran energy exports to zero - X post.

Europe

- (EU) European People's Party (EPP) head Weber calls for "softening" of 2035 green car targets - FT.

- (IL) US Pres Trump said to have 'waved off' Israeli strike after divisions emerged in his administration [time frame uncertain] - NYT.

- (UR) Ukraine Deputy PM: Minerals deal discussion with US seeing substantial progress; Teams agreed to sign memorandum in near future.

- (IQ) Iraq said planning to cut April oil exports by 70K bpd to 3.23M bpd as OPEC+ pressure to adhere to production quotas rises.

- (IR) Iran govt spokesman: Talks with US at risk of falling apart if goalposts are moved - X post.

Levels as of 00:20 ET

- Nikkei 225 +0.9%, ASX 200 +0.6%, Hang Seng +1.4%; Shanghai Composite flat; Kospi +0.6%.

- Equity S&P500 Futures +0.7%; Nasdaq100 +0.8%; DAX flat; FTSE100 +0.8%.

- EUR 113.55-1.1410; JPY 141.62-142.86; AUD 0.6338-0.6377; NZD 0.5907-0.5944.

- Gold +0.1% at $3,350/oz; Crude Oil +1.4% $63.32/bbl; Copper -0.9% at $4.6355/lb.