- Cash tsys yields are 2-3bps richer in Asia today, with the belly outperforming head of US Nonfarms later today, bbg consensus has them to increase 160,000, up from 143,000 in January.
- Equities have tracked losses made on Wall street overnight, with tech stocks struggling. Japan's Nikkei is the worst performing benchmark, down 2.10% followed by Australia's ASX200 which trades 1.70% lower. China & Hong Kong equities have found support throughout the session with major benchmarks now in the green.
- FX has been relatively stable throughout the session, with the BBDXY little changed. The AUD& NZD are the worst performing currencies, down 0.47% & 0.38% respectively
MARKETS
- Tsys futures are trading higher ahead of the US jobs report and Federal Reserve Chair Jerome Powell’s speech on the economic outlook. TU is +01 3/8 at 103-18 5/8, while TY is +07+ at 111-01 with TY trading after Thursday's highs.
- As per MNI's technical team the trend in tsys remains bullish and the latest pullback appears corrective. TY has pierced resistance at 111-22+, the Dec 3 ‘24 high. A clear break of this level would strengthen a bullish theme and open 112-02 and 112-13, Fibonacci projection points. Note that the daily trend condition is overbought, a pullback is allowing the overbought set-up to unwind. Firm support is at 110-00, the Feb 7 high.
- Cash tsys yields are 2-3bps richer in Asia today, with the belly outperforming, the 2s7s30s fly -1bps at -22bps, although we did see a large bounce in it this week, moving almost 10bps. The 2yr is -2.4bps at 3.937%, the 10yr is -2.7bps at 4.251%. The 2s10s is -0.5bps at 31.318, although has steepened 10bps this week.
- Non-farm payrolls are expected to have increased 160,000 last month, up from 143,000 in January, as per BBG, while the whisper number among Bloomberg terminal users is 120,000
- The Fed's Bostic signaled that the Fed may hold rates steady until late spring or summer due to uncertainty surrounding Trump’s policies and economic conditions. While investors expect no change in March, markets anticipate three rate cuts later this year, aligning with Fed Governor Christopher Waller’s forecast of two to three reductions.
- the Fed's Waller said he wouldn’t support a rate cut in March but sees room for two or possibly three cuts this year if inflation trends toward target. He emphasized the need to monitor the labor market and inflation before making policy changes and reiterated that tariffs are unlikely to have a significant impact on inflation.
- Investors favored the Treasury’s four-week bill auction on Thursday amid uncertainty over the Fed’s rate path, pushing its yield to 4.23%, slightly below the WI bid. Indirect bidders took 67.7% of the four-week supply, exceeding the four-auction average, while the eight-week bill saw weaker demand. Oxford Economics noted that rising rate cut expectations and shrinking auction sizes continue to support bill auctions, as per BBG
- Powell is scheduled to speak later Friday along with New York Fed President John Williams, the FOMC blackout period starts on Saturday
- Later today we have Nonfarms, Unemployment Rate & Consumer Credit
JGBS: Twist-Steepener On A Subdued Data-Light Session Ahead Of US Payrolls
JGB futures are stronger, +14 compared to settlement levels, on a subdued data-light session ahead of US payrolls data. Fed Chair Powell will also discuss his economic outlook (text, Q&A) at Chicago Booth's Monetary Policy Forum at 1230ET.
- Cash US tsys are ~3bps richer in today’s Asia-Pac session after yesterday’s twist-steeper.
- “The yen has regained some strength, but its weakness and downward fall last year will still boost inflation this spring. The Bank of Japan may normalize its policy soon, with potential 25-basis-point hikes in April and July, taking its target rate up to 1.0%.” (per BBG Economics)
- “Japan has cleared the key threshold for the government to officially declare an end to long-term price deflation, economy minister Ryosei Akazawa said on Friday.” (per RTRS)
- Cash JGBs have twist-steepened, with benchmarks yields 4bps lower to 3bps higher. The benchmark 10-year yield is 1.7bps lower at 1.525% versus the cycle high of 1.553%.
- Swap rates are 2bps lower to 2bps higher, with a steeper curve. Swap spreads are wider.
- On Monday, the local calendar will see Labor and Real Cash Earnings, Current Account Balance and Bank Lending data alongside 5-year supply.
AUSSIE BONDS: Holding Richer Ahead Of US Payrolls & Fed Chair Powell Speech
ACGBs (YM +5.0 & XM +7.5) holding stronger after trading in relatively narrow ranges ahead of today’s US payrolls release.
- Australia's seasonally adjusted household spending rose 0.4% month on month in January following a 0.2% increase in the prior month. A 1.5% rise in services spending drove the January growth, accelerating from a 0.1% uptick in December 2024.
- Cash US tsys are 2-3bps richer in today’s Asia-Pac session. Fed Chair Powell will discuss his economic outlook at Chicago Booth's Monetary Policy Forum at 1230ET.
- Cash ACGBs 6-8bps richer with the AU-US 10-year yield differential at +15bps.
- ACGB Dec-30 supply showed a weighted average yield of 1.19bps through prevailing mids. The cover ratio was a solid 4.6357x.
- The bills strip has bull-flattened, with pricing +1 to +8.
- RBA-dated OIS pricing is flat to 3bps softer across meetings today.
- Nevertheless, pricing remains mixed compared to February’s pre-RBA Decision levels—meetings through May are 2-4bps firmer, while those beyond are 2-16bps softer. A 25bp rate cut in April is given a 10% probability, with a cumulative 63bps of easing priced by year-end.
- The local calendar will be empty on Monday.
- Next week, the AOFM plans to sell A$300mn of the 2.75% 21 May 2041 bond on Tuesday and A$800mn of the 3.50% 21 December 2034 bond on Wednesday.
NZGBS: Richer Ahead Of US Payrolls
NZGBs closed near session bests, with benchmark yields 7-8bps lower.
- With the local calendar empty today ahead of US payrolls data. Today’s strength has been entirely tied to US tsys. After a positive lead-in from yesterday’s bullish NY session, cash US tsys are 2-3bps richer in today’s Asia-Pac session.
- After the US Employment Report, Fed Chair Powell will discuss his economic outlook (text, Q&A) at Chicago Booth's Monetary Policy Forum at 1230ET.
- Swap rates closed 4-8bps lower, with the 2s10s curve flatter.
- RBNZ dated OIS pricing closed flat to 3bps softer across meetings. 25bps of easing is priced for April, with a cumulative 72bps by November 2025.
- The local calendar is empty on Monday, ahead of Mfg Activity Volume on Tuesday and Card Spending Retail on Wednesday.
ASIA STOCKS: Asian Equities Track Wall Streets Sell-Off, Focus Turns To Payrolls
Asian equity markets tracked a U.S. sell-off, driven by persistent uncertainty over Trump’s shifting tariff policies, which eroded risk appetite and confidence in the global economic outlook. Despite a delay in tariffs on Mexican and Canadian goods until April, fragile sentiment persisted, amplified by Trump’s dismissal of market reactions and hints of future levies. Tech stocks slumped regionally after U.S. peers like Nvidia faltered, though late U.S. optimism from Broadcom’s AI-driven forecast offered a glimmer of hope. China’s robust stimulus signals and a focus on consumption and tech bolstered some resilience, yet tariff fears capped gains. Commodity-linked currencies weakened, and Japan saw sharp declines tied to export sensitivity, while South Korea’s chip-heavy index faltered. Australia faced broad losses amid banking and energy woes, and smaller markets like Malaysia and Vietnam showed muted responses, all bracing for the US jobs report as a potential volatility trigger.
- Chinese stocks retreated on the open after hitting a four-year high, with the CSI 300 Index falling 0.3% however we have since seen a bounce in Chinese equities with the CSI 300 now 0.15% higher. Optimism from Beijing’s fiscal stimulus plans, a record-high 2025 broad deficit, and the PBOC’s pledge for looser monetary policy (including rate and RRR cuts) supported sentiment. JD.com’s strong earnings, reflecting faster revenue growth and improved consumer sentiment, reinforced confidence in policy traction, though tariff uncertainty tempered gains.
- Hong Kong's HSI opened 0.8% lower following a stellar Thursday, as profit-taking emerged after gains driven by tech heavyweights like Alibaba and JD.com, however we have since recovered with the HSI now 1.12% higher while the HS Tech Index is +2%. The MSCI China gauge, fueled by AI narratives and firms like Tencent, continued to outpace MSCI Hong Kong, despite external tariff pressures. Beijing’s tech and consumption support provided a positive backdrop, but US trade policy volatility kept markets on edge.
- Japan’s Topix Index is 1.6% lower, while the Nikkei is down 2.20%, reflecting sensitivity to US tariff shifts and a broader tech sell-off. Export-oriented firms faced pressure despite the dollar’s fifth-day decline.
- South Korea's Kospi declined as much as 1.4%, weighed down by large-cap chip stocks like Samsung Electronics and SK Hynix, echoing a 4.5% drop in the U.S. Philadelphia Semiconductor Index, however we have seen a bounce with the index now just 0.20% lower, as Samsung finds some support. Mdevice, a SSD maker, soared 65.27% on its Kosdaq debut, buoyed by AI-driven demand.
- Australia's ASX 200 dropped 1.8% poised for its worst close since September, mirroring Wall Street’s tariff-driven slump. Banks like CBA (-3.8%) and financials (-2.5%) led losses, with energy stocks down 1.3% despite stable oil prices (WTI above $66). Mining giants held steady with iron ore above $US100. New Zealand's NZX50 closed down just 0.23%.
EQUITIES: US Equities Tumble On Trade Concerns
- US equity prices saw sharp declines overnight driven by intense volatility tied to trade policy uncertainty. The S&P 500 dropped 1.8% and the Nasdaq 100 fell 2.8%, nearing a technical correction, as markets struggled to recover despite Trump’s decision to delay tariffs on Mexican and Canadian USMCA-compliant goods until April.
- A barrage of tariff headlines, following the largest US tariff hike in a century, fueled fragile sentiment, with Trump defending the moves as a counter to foreign exploitation.
- Tech stocks, led by Nvidia (-5.74%), dragged indices lower, with the SOX down 4.53%. Broadcom’s upbeat AI revenue forecast offered some late relief, and trades +16% in after hours trading.
- Ahead of Friday’s payrolls report (expected +160k jobs, 4% unemployment), jobless claims data provided mild reassurance, but trade policy dominated market action, overshadowing mixed economic signals and muted Treasury yield movements (10-year at 4.278%).
- Low-volatility stocks outperformed amid the rout (Dow Jones fell just 1%), reflecting a flight to safety as investors braced for ongoing uncertainty.
ASIA STOCKS: Foreign Investors Continue To Offload Asian Equities
Outflows across the region continue, Taiwan has been by far the worst hit my foreign investors selling, with an almost $5b weekly outflow, while India is the worst ytd with an almost $15b outflow so far.
- South Korea: Recorded -$51m in outflows Thursday, bringing the 5-day total to -$1.6b. YTD flows remain negative at -$4.19b. The 5-day average is -$319m, worse than the 20-day average of -$157m and the 100-day average of -$119m.
- Taiwan: Recorded -$774m in outflows Thursday, bringing the 5-day total to -$4.86b. YTD flows remain negative at -$8.92b. The 5-day average is -$971m, significantly worse than the 20-day average of -$293m and the 100-day average of -$151m.
- India: Posted -$217m in outflows Wednesday, bringing the 5-day total to -$2.4b. YTD outflows remain heavy at -$14.93b. The 5-day average is -$481m, worse than the 20-day average of -$305m and the 100-day average of -$215m.
- Indonesia: Recorded -$2m in outflows Thursday, bringing the 5-day total to -$155m. YTD flows remain negative at -$1.32b. The 5-day average is -$31m, slightly better than the 20-day average of -$44m but worse than the 100-day average of -$32m.
- Thailand: Saw -$141m in outflows Thursday, bringing the 5-day total to -$316m. YTD flows remain negative at -$696m. The 5-day average is -$63m, worse than the 20-day average of -$20m and the 100-day average of -$19m.
- Malaysia: Posted -$38m in outflows Thursday, bringing the 5-day total to -$274m. YTD flows are negative at -$1.33b. The 5-day average is -$55m, worse than the 20-day average of -$29m and the 100-day average of -$29m.
- Philippines: Recorded +$6m in inflows Thursday, bringing the 5-day total to -$55m. YTD flows remain negative at -$255m. The 5-day average is -$11m, slightly worse than the 20-day average of -$8m and the 100-day average of -$8m.
Table 1: EM Asia Equity Flows
Oil Prices Steady - On Track for Biggest Weekly Decline for Year.
- The push pull of tariff headlines was evident in oil markets today as some economists suggest that full blown tariffs could drive economic growth down, weighing heavy on oil demand.
- As always with markets a counter view is that tariffs on Mexican and Canadian oil (whose infrastructure is dominated by US demand) could actually increase oil demand as the US demand seeks supply from elsewhere.
- WTI opened at $66.34 trading down initially before recovering back to $66.39.
- WTI is down -4.8% this week and on track to record its biggest fall for the year.
- Brent opened at g$69.43 falling initially before stabilizing at $69.53 on low volumes.
- Brent is currently down -4.9% for the week, on track for its biggest decline for the year.
- President Trump has now indicated tariffs will be deferred on Canada and Mexico for all goods covered under the trade agreement known as USMCA which includes energy.
- Data out shows US refiners have reduced their orders for Mexican oil by 30% for March.
- Canadian fuel tankers usually bound for the US are being diverted to Europe as the flow of energy in North American is disrupted by tariffs.
- Treasury Secretary Bessent said Thursday that the US “will not hesitate to go all in on Russian energy if it helps lead to a ceasefire in Ukraine.”
- In a report to the National People’s Congress China’s economic planners are advocating a reduction in the refinement of oil and a re-focus on chemicals .
- Brazil’s Raizen SA is exploring the sale of its Argentinian oil assets as yet another multi-national leaves the country.
Gold Prices Lower but Delivers Another Strong Week.
- Markets are caught in the crossfire on tariffs with headlines changing rapidly.
- Despite gold’s safe-haven status, it too has paused with the rally running out of steam.
- Up over 10% for the year, gold did very little overnight opening at $2,911.80 in Asia trading and moderating to $2,907.23.
- For the week, gold is up +1.7% having recorded only one week of losses this year.
- Physical gold stockpiles have soared in US exchange houses as billions of dollars in bullion has flowed into the US in advance of the tariffs.
- South Africa's Public Investment Corporation (PIC) has increased its stake in gold producer, Pan African Resources (Pan African), from 9.98% to 12.39%.
- The State Oil Fund of the Azerbaijan Republic (SOFAZ) will continue purchasing gold in 2025 and plans to boost the volume in assets to 170 tonnes by April-May, SOFAZ Investment Department Director Farhad Zeinalov told reporters.
- Despite the ongoing armed conflict, Sudan achieved a record gold output in 2024 of 64.4 tons and generating approximately USD1.6 billion in revenue for the government, according to a recent report by Sudan's state-run Mineral Resources Company.
FOREX: BBDXY Steady Ahead Of Payrolls, AUD & NZD Worst Performing G10 FX
The BBDXY is trading little changed here in Asia today, last -0.06% at 1,269.33 although trades 2.22% lower over the past 5 sessions, and is on course for the biggest weekly drop in more than two years. There hasn't been much in the way of headlines throughout the session. The JPY is trading higher while the AUD & NZD are the worst performing G10 currencies as as uncertainty over the US tariff policy spurred risk aversion in the market.
- Japan’s FinMin Kato expressed concern over one-sided and rapid FX moves since December, stating that the government will act against excessive volatility while the BOJ will make independent policy decisions. The USD/JPY is -0.32% at 147.51, after hitting a high of 148.16 early in the session, we now trade just off session lows.
- EUR/USD is trading 0.21% higher ahead of Eurozone's 4Q GDP due out later today, the gains have come over the past hour with the first half of the session seeing very tight ranges, we trade just off session highs of 1.0815, at 1.080 at the moment.
- GBP/USD is trading little changed at 1.288, ranges have been narrow throughout the session.
- The AUD is the worst performing G10 currency today as commodity heavy currencies struggle, the AUD/USD is -0.44% at 0.6305, and trades just 1.56% higher for the week, only outperforming the CAD. NZD/USD trading slightly better than the AUD, although down 0.35% for the session. After a brief break above the 1.1100 level the AUD/NZD has fallen back with the 1.1000 - 1.1100 range its spent the past 6 months in.
- Equities are trading mostly lower with tech stocks the worst performing following overnight's sell-off. The Philadelphia SE semiconductor Index dropped 4.50%, and is now down 17% over the past two week, this has pressured the Nikkei (-2%), TAIEX (-0.50%). US equities futures look to have found some support with the S&P 500 Eminis +.30%, while the Nasdaq 100 Eminis are trading +0.44% ahead of tonight Non-farm Payrolls.
AUSTRALIA: Australian Household Spending Below Consensus
- Australia’s household spending rose 0.4% m/m in January, up from a revised 0.2% in December and slightly below the expected 0.5%. Year-on-year, spending increased 2.9%, down from a revised 4.2% in December.
- The ABS reported a 1.5%increase in services spending—driven by health (up 2.5%), air travel, and recreation—as the key growth driver, while goods spending fell 0.6% after strong late-2024 gains tied to promotions like Black Friday.
- This follows Q4 2024 GDP data showing 0.6% quarterly and 1.3% annual growth, partly fueled by household consumption, which accounts for over half of GDP.
- The RBA, after cutting rates to 4.1% on February 18, remains cautious, monitoring spending and a tight labor market for signs of inflationary pressure. Spending grew across all states, though declines in furnishings and clothing (both -1.5%) tempered gains. The ABS plans to phase out retail sales reports by mid-2025, favoring the broader household spending metric.
Chart. AU Household Spending - BBG
CHINA: Exports Miss Forecast But Trade Surplus Strong.
- Exports in February rose +2.3%, below expectations of +5.9%.
- The result was down on prior months with the 1-year average +3.8%,
- Forecasters were expecting front loading of exports in February and that is the driver behind the forecast error.
- The result underscores the front loading given a large impact in the month from Lunar New Holiday.
- Imports were impacted more, declining -8.4%.
- The result delivered a trade surplus of US$170.5bn.
- Expectations are high for the release of growth friendly policies over the weekend given the People’s Congress is ongoing.
- The government has committed to GDP growth of 5% and indicated that inflation will be around 2%, whilst expecting bond issuance to grow to support regional governments.
CHINA: DATA Preview: CPI and PPI Declines Impacted by LNY.
- China is set to release February PPI and CPI and the headline is likely to be poor. The Lunar New Year holiday this year was earlier than normal, impacting year on year comparisons and likely to see CPI turn negative. Markets are forecasting a -0.4% decline, following +0.5% the month prior. PPI has been mired in deflation now for more than a year reflecting the challenges that producers face in extracting value. With the National People’s Congress starting, already headlines are out in terms of the goals for the year. The government has said that they expect GDP growth to be 5% and CPI to be around 2%. The February release for now can be looked through as interrupted however the challenges to get to 2% for CPI and PPI to move positive remain.
- China will also release their New Yuan Loans data for February and much like CPI will be an interrupted data set and as such will likely be looked through. That said the market expects a rise in New Yuan Loans to CNY6.4bn, from CNY5.1bn in January with aggregate financing rising to CNY9.6bn from CNY7.05bn.
STIR: RBA Dated OIS Pricing Softer Today But Mixed Vs. Pre-RBA Decision Levels
RBA-dated OIS pricing is flat to 2bps softer across meetings today.
- Nevertheless, pricing remains mixed compared to February’s pre-RBA Decision levels—meetings through May are 3-4bps firmer, while those beyond are 2-14bps softer.
- A 25bp rate cut in April is given a 9% probability, with a cumulative 63bps of easing priced by year-end (based on an effective cash rate of 4.09%).
Figure 1: RBA-Dated OIS – Today Vs. Pre-RBA Levels
Source: MNI – Market News / Bloomberg
STIR: $-Bloc Markets little Changed Over the Past Week, Except In The US
In the $-bloc, rate expectations through December 2025 have remained largely unchanged over the past week, except in the US, where pricing softened by 12bps. New Zealand and Canada saw no change, while Australia eased 4bps.
- Australia: The key development was Q4 GDP, which met consensus expectations at +0.6% q/q and +1.3% y/y, up from +0.3% q/q and +0.8% y/y in Q3. The annual figure exceeded the RBA’s February forecast of 1.1% y/y. Meanwhile, RBA Deputy Governor Hauser reiterated that policy decisions will remain meeting-by-meeting, emphasising that while progress toward the CPI target is encouraging, it is too soon to declare victory. The RBA will closely monitor trade tensions and respond if inflation rises as a result.
- Canada: Q4 GDP exceeded expectations, printing at 2.6% annualized versus 1.7% estimate. However, market focus remains on US tariffs on Canada and Canada’s potential retaliatory measures, which continue to generate uncertainty.
- US: Economic data remains mixed. The February ADP job gain came in weaker than expected ahead of today’s payrolls data, while ISM Services data surprised to the upside.
- Looking ahead to December 2025, the projected official rates and cumulative easing across the $-bloc are as follows: US (FOMC): 3.59%, -75bps; Canada (BOC): 2.40%, -60bps; Australia (RBA): 3.45%, -65bps; and New Zealand (RBNZ): 3.04%, -71bps.
Figure 1: $-Bloc STIR (%)
Source: MNI – Market News / Bloomberg
UP TODAY (TIMES GMT/LOCAL)
| Date | GMT/Local | Impact | Country | Event |
| 07/03/2025 | 0700/0800 | ** |  DE | Manufacturing Orders |
| 07/03/2025 | 0745/0845 | * |  FR | Foreign Trade |
| 07/03/2025 | 0800/0900 | ** |  ES | Industrial Production |
| 07/03/2025 | 0930/1030 |  EU | Lagarde Address at ECB International Women's Day 2025 conf | |
| 07/03/2025 | 0940/1040 | EU | ECB International Women's Day conf. incl. Lagarde, Nagel, Panetta | |
| 07/03/2025 | 1000/1100 | *** | EU | GDP (final) |
| 07/03/2025 | 1000/1100 | * | EU | Employment |
| 07/03/2025 | - | *** |  CN | Trade |
| 07/03/2025 | 1330/0830 | *** |  CA | Labour Force Survey |
| 07/03/2025 | 1330/0830 | *** |  US | Employment Report |
| 07/03/2025 | 1515/1015 | US | Fed Governor Michelle Bowman | |
| 07/03/2025 | 1545/1045 | US | New York Fed's John Williams | |
| 07/03/2025 | 1720/1220 | US | Fed Governor Adriana Kugler | |
| 07/03/2025 | 1730/1230 | US | Fed Chair Jerome Powell | |
| 07/03/2025 | 1800/1300 | US | Fed Governor Adriana Kugler | |
| 07/03/2025 | 2000/1500 | * | US | Consumer Credit |
| 09/03/2025 | 0130/0930 | *** | CN | CPI |
| 09/03/2025 | 0130/0930 | *** | CN | Producer Price Index |
3613 words