HALISTER1: INSIDE ASIA: China Raises Yuan Rate as PPI Advances on Month

INSIDE ASIA: China Raises Yuan Rate as PPI Advances on Month

(Bloomberg) -- The yuan gains after PBOC raises the reference rate by the most since March 31 as consumer inflation gained last month.
  • China CPI index up 2.3% on year, while the producer price index posted the first month-on-month increase since 2013
    • Chinese inflation may remain near current levels for the rest of the year, which would suggest that it won’t “become a constraint on policy in the near future,” according to Capital Economics China economist Julian Evans-Pritchard
    • Onshore & offshore yuan both advance; PBOC raises yuan fixing by 0.13% to 6.4649; Premier says economy better than expected in 1Q: state TV said late on Friday
  • Asian currencies advance, with ringgit and won gaining the most
    • Yen rises for seventh day against dollar with government data showing Feb. machine order fell a less-than- expected 9.2% previous month; median estimate was for a 12.0% decline
    • Ringgit rises ahead of industrial production data; Data may show it rose 3.8% from year earlier in February, highest since October: Bloomberg survey; Malaysia says China’s bond purchases help spur ringgit: Star
    • Rupiah gains; Bank Indonesia expects $400m trade surplus in March: Daily; World Bank cuts 2016 GDP growth estimate for Developing East Asia to 6.3% from October estimate of 6.4%, with Indonesia growth forecast cut by 0.2pps to 5.1%
  • Aussie and Kiwi both declined; Australia’s home loans rose 1.5% from previous month in February; missing median estimate of a 2.0% gain
    • New Zealand’s retail card spending increased 0.1% from previous month in March, least since December; median estimate was for 0.3% gain
    • Taiwan’s dollar weakens; data today will show island’s exports fell 9.5% in March after 11.8% decline in February while trade surplus widened to $4.31b, most since October: Bloomberg surveys
  • U.S. Treasuries little changed, with yield on 10-year bonds at 1.710% in Asian trading; Atlanta Fed cut its U.S. 1Q GDP est. for third time in two weeks
  • IMF says some central banks support negative policy rates
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Julian Evans-Pritchard (Capital Economics Asia Pte Ltd)

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