MNI EUROPEAN OPEN: Macron Beats Out Le Pen In Debate Polling, Chinese Policy Moves & Yuan Matters Eyed

EXECUTIVE SUMMARY

• FED SAYS HIGH U.S. INFLATION, GEOPOLITICS ARE CLOUDING OUTLOOK (BBG)
• ECB COULD END THE YEAR WITH POSITIVE POLICY RATES, WUNSCH SAYS (BBG)
• MACRON MORE CONVINCING THAN LE PEN IN FRENCH ELECTION DEBATE – POLL (RTRS)
• UKRAINE OFFERS TO HOLD MARIUPOL TALKS WITH RUSSIA TO EVACUATE GARRISON, CIVILIANS (RTRS)
• TOP PUTIN ALLY SAYS RUSSIA WILL CAPTURE MARIUPOL ON THURSDAY (RTRS)
• CHINA STILL HAS ROOM TO CUT LPR AFTER NO CHANGE IN APRIL (CSJ)
• YUAN HAS ROOM TO FALL ON WEAKER EXPORTS, FUND OUFLOWS (SEC. TIMES)

Fig. 1: China’s CSI 300 & ChiNext Indices

Source: MNI - Market News/Bloomberg

UK

ECONOMY: Around one in five employers are likely to make staff redundancies over the next year, new research suggests. The conciliation service Acas said its study indicated that large businesses are more likely to reduce their workforce than small and medium-sized firms. Acas chief executive Susan Clews said: "The impact of global events has seen some businesses facing difficult circumstances and our poll reveals that nearly one in five are considering redundancies in the year ahead. "Redundancies at large organisations have been in the news recently and it appears that three in 10 organisations that employ more than 250 employees are likely to make redundancies in the next 12 months. The report was based on a survey of more than 1,000 employers. (BBG)

POLITICS: The government will attempt to delay a decision over an investigation into whether Boris Johnson misled MPs about lockdown parties. MPs were set to vote on Thursday on a Labour plan for a Commons committee to investigate his past comments about Whitehall gatherings. But ministers now say that vote should wait until probes by the Met Police and civil servant Sue Gray have finished. Some rebel Tory MPs were threatening to vote with Labour, or not at all. Mr Johnson will miss the vote himself as he is making an official trip to India. Speaking on the flight to Gujarat, Mr Johnson told reporters he will fight the next general election and would not say if there were any circumstances under which he would resign. "I think the best thing that we can all do is focus on the things that really change and improve the lives of voters and stop talking about politicians," the PM said. (BBC)

POLITICS: Britons believe that the government is handling almost every important issue badly, a poll has found. Inflation, immigration, taxation and crime are among more than a dozen areas where the number of voters who think the government is doing badly outstrips those who think it is doing well, according to YouGov. (The Times)

EUROPE

ECB: The European Central Bank could lift policy rates above zero before the end of the year unless the euro-zone economy suffers a severe shock, and it might even have to deploy “restrictive” policy to get surging prices under control, Governing Council member Pierre Wunsch said. While the war in Ukraine presents a significant risk to the economy, it probably won’t keep the ECB from raising borrowing costs to react to a series of unexpectedly strong inflation readings, he said in an interview in Washington conducted on Wednesday evening. “Without any really bad news coming from that front, hiking by the end of this year to zero or slightly positive territory for me would be a no brainer,” Wunsch said. (BBG)

FRANCE: French President Emmanuel Macron on Wednesday accused his far-right rival Marine Le Pen of being in thrall to Russian President Vladimir Putin over a years-old Russian bank loan to her party during a fiery TV debate ahead of Sunday's election. While he also charged Le Pen with harbouring an undiminished desire to pull France out of the European Union (EU), she struck back with a pledge to put money back in the pockets of millions of French made poorer during his five-year presidency. The debate - their only one of the campaign - was peppered with appeals of "don't interrupt me" and accusations the other was not up to the job of leading France, a veto-wielding U.N. Security Council member and Europe's second-largest economy. (RTRS)

FRANCE: French President Emmanuel Macron was found to be more convincing than far-right candidate Marine Le Pen in a pre-election debate on French televison ahead of Sunday's presidential runoff vote, an opinion poll showed. The snap survey by Elabe for BFM TV found that 59% of polled viewers found Macron more convincing than Le Pen. In 2017, the same polling firm found that 63% of those surveyed found Macron more convincing. Polls of voting intentions for the April 24 election estimate that Macron will win with around 55.5% of the vote. In 2017, Macron beat Le Pen with 66.1% of the vote. (RTRS)

GREECE: Greece will raise the minimum wage for employees by 7.5% to 713 euros ($774) a month from 663 euros starting on May 1, Prime Minister Kyriakos Mitsotakis said Wednesday. “‘Now is the time to boost lower incomes,” Mitsotakis said in a national televised address. He called on employers to act accordingly and increase wages for all employees. Mitsotakis had promised in December to increase the minimum wage twice in 2022 and today’s announcement follows a 2% rise that began on Jan. 1. The move comes as citizens confront soaring energy and food prices after Russia’s invasion of Ukraine exacerbated the jump in the price of natural gas. The government is considering additional measures to curb increases to power prices to help businesses and households if the European Union doesn’t develop joint actions soon. (BBG)

IRELAND: Irish consumer confidence suffered its second successive sharp monthly drop as concerns about living costs that hurt the macro economic outlook in March spread into a weakening of spending plans in April, a survey showed on Thursday. The KBC Bank Ireland consumer sentiment index dropped to 57.7 from 67.0, an almost identical fall to that from February to March, which was the sharpest since the start of the COVID-19 pandemic when swathes of the economy shutdown. The index stands significantly below the long-term average of 86.6 and the cumulative 24 point decline since Irish inflation began climbing sharply over the last three months was the second largest in the 26-year history of the survey. It was scarcely surprising that there was a downgrade of the current and future state of household finances, the survey's authors said, citing upward pressure on energy costs and increased concerns in relation to food prices. (RTRS)

SWEDEN: Swedish residential property prices were unchanged on the month in March, according to the Nasdaq OMX Valueguard-KTH Housing Index. HOX Sweden index rose 4.4% in the 3 months through March and rose 7.5% y/y. (BBG)

U.S.

FED: U.S. central bankers should move “purposefully” and raise interest rates to neutral -- the level which neither speeds up nor slows down the economy -- by the end of the year, Federal Reserve Bank of San Francisco President Mary Daly said. “I see an expeditious march to neutral by the end of the year as a prudent path,” Daly said Wednesday in a speech in Las Vegas, noting that most forecasters see that level lying around 2.5%. “Moving purposefully to a more neutral stance that does not stimulate the economy is the top priority.” “The case for a 50 basis-point adjustment is now complete,” Daly told reporters following the speech. “The economy is resilient; it can handle these adjustments.” (BBG)

FED: The U.S. economy grew at a moderate pace through mid-April, but rising prices and geopolitical developments created uncertainty and clouded the outlook for future growth, the Federal Reserve said. “Inflationary pressures remained strong since the last report, with firms continuing to pass swiftly rising input costs through to customers,” the U.S. central bank said in its Beige Book survey released Wednesday. “Outlooks for future growth were clouded by the uncertainty created by recent geopolitical developments and rising prices.” (BBG)

INFRASTRUCTURE: President Joe Biden is expected to highlight his administration’s infrastructure spending and efforts to fight climate change and lower prescription drug costs during a two-day visit to Portland and Seattle beginning Thursday. Biden’s Pacific Northwest swing will start with a visit to Portland on Thursday, where he’s scheduled to tout benefits from the $1 trillion infrastructure measure signed into law late last year. The president will arrive at Portland Air National Guard Base at 12:40 p.m., according to the White House. He’ll visit nearby Portland International Airport to highlight infrastructure investments such as an earthquake-resistant runway at the airport and deliver a speech promoting the benefits of such spending. (The Seattle Times)

INFLATION: U.S. Director of the National Economic Council (NEC) Brian Deese made the following prepared remarks at the Economic Club of New York on Wednesday, “By enacting long-term, technology-neutral incentives to generate zero-carbon energy and innovation, we can lay the foundation for more American-made clean-energy technologies and bolster domestic supply chains. We can partner with allies to expand our collective capacity to produce clean energy, while opening new export markets for American products. And we can do it in a way that lowers immediate costs for Americans, keeps our affordable-energy advantage, and accelerates growth in energy communities transitioning toward industries of the future. Congress urgently needs to act here as well.” (MNI)

CORONAVIRUS: The U.S. Justice Department said it would appeal a Florida judge’s ruling that threw out a mask requirement for plane and air travel, setting up a likely court battle that could extend past the midterm elections. The department on Wednesday filed papers in Tampa, where the ruling was handed down on Monday, notifying the court of its plans to appeal. The department said it made the move following a request from the U.S. Centers for Disease Control and Prevention. “It is CDC’s continuing assessment that at this time an order requiring masking in the indoor transportation corridor remains necessary for the public health,” the agency said in the assessment released Wednesday evening. “CDC believes this is a lawful order, well within CDC’s legal authority to protect public health.” (BBG)

OTHER

JAPAN: Japan explained to its G7 counterparts the yen's recent "somewhat rapid" declines, finance minister Shunichi Suzuki said on Thursday, underscoring Tokyo's growing alarm over the currency's sharp fall to a two-decade low against the dollar. Suzuki did not comment on how the G7 finance leaders responded, saying only that the meeting in Washington, D.C., focused on discussions over the global economy and Russia's invasion of Ukraine rather than exchange-rate moves. In a statement issued after their meeting, the leaders said they were closely monitoring global financial markets that have been "volatile," but made no direct mention of exchange rates. Suzuki said the G7 likely stuck to its agreement that markets ought to determine currency rates, that the group will closely coordinate on currency moves, and that excessive and disorderly exchange-rate moves would hurt growth. He added that rapid currency moves were undesirable, when asked about the yen's recent sharp falls. (RTRS)

JAPAN: BOJ Governor Haruhiko Kuroda, who also attended the meeting, said excessive exchange-rate volatility could affect business activity. "It's desirable for exchange rates to move stably, reflecting fundamentals," Kuroda said. "The BOJ will carefully watch how currency moves could affect Japan's economy and prices." (RTRS)

JAPAN: The yen's recent declines have been driven by fundamentals and would be no reason for Japan to change its economic policy, including the central bank's ultra-low interest rates, a senior International Monetary Fund (IMF) official said."What we're seeing so far on the yen is driven by fundamentals," Sanjaya Panth, deputy director of the IMF's Asia and Pacific Department, told Reuters late on Wednesday. "Economic policymaking should continue to look at fundamentals. We don't see any reason to change economic policy because what's happening right now reflects fundamentals." When asked whether yen-buying currency intervention by Japanese authorities would be justified, Panth said the current policy stance was appropriate as conditions in the foreign exchange market were not disorderly. (RTRS)

JAPAN: Japan’s ruling Liberal Democratic Party and its junior coalition partner Komeito agree to compile an extra budget for fiscal 2022 to finance a relief package designed to cushion the impact of higher prices on the population and businesses, Kyodo reports, citing an unidentified official. The secretary generals of the 2 parties are set to reach a formal agreement this afternoon. (BBG)

AUSTRALIA: A snap poll showed Australian opposition leader Anthony Albanese had the edge in the first combative debate of a tightly-fought election campaign against Prime Minister Scott Morrison. Faced with undecided voters, about 40% of their audience said they believed Labor’s Albanese had the upper hand, according to a tally by host Sky News, while 35% said Morrison had come out on top. The remaining 25% of attendees were undecided after the event. As the two rivals slugged it out on Tuesday night, the most fraught issues to emerge were around political corruption, domestic manufacturing of green energy and the ways to support the country’s nurses in the wake of a health pandemic that saw Australia largely sealed off from the outside world. The debate grew heated when Morrison was asked about the news that the Solomon Islands had signed a security agreement with the government in Beijing despite Australia’s objections. Morrison accused the Labor Party of “taking China’s side, ” which Albanese called an “outrageous slur.” (BBG)

SOUTH KOREA: South Korea’s economy has been resilient and continuing policy normalization is “appropriate” at the current stage, IMF Mission Chief for Korea Martin Kaufman says on Bloomberg TV. Inflationary pressure is “rising but much more contained” than in other advanced countries. Monetary authorities are well-positioned because they started policy normalization early. ’Gradual and steady’ normalization will work for South Korea. South Korea should seek greater labor flexibility and lower barriers for start-ups. South Korea should calibrate scale and scope of extra budgets; may still need budget support for certain sectors. (BBG)

ASIA: Rising Covid cases in China and the war in Ukraine pose headwinds for Asia’s growth, the International Monetary Fund told CNBC on Wednesday. “Asia is clearly facing headwinds, both from the war in Ukraine but also from the lingering effects of Covid now being much more pronounced in China than before,” said Anne-Marie Gulde-Wolf, the acting director of the IMF’s Asia and Pacific Department. She said the outlook for Asia in 2022 had been downgraded by half a percentage point to 4.9% from the 5.4% estimate in January. (CNBC)

MEXICO: Mexico’s tax revenue will rise this year even with gasoline subsidies, said Raquel Buenrostro, head of tax agency SAT. Total revenue may be a little below budgeted amount, Buenrostro said at a media conference. Total cost of gasoline subsidies in 2022 will be between 350b pesos and 400b pesos, including 200b-peso hole from suspension of gasoline excise taxes. Income from higher crude prices from Pemex sales, other tax collection efforts and economic growth will help offset impact of subsidies. Mexico expected to collect around 200b pesos from big companies in 2022 vs nearly 209b pesos last year and 218b pesos in 2020, Martinez said. (BBG)

MEXICO: Mexico central bank Deputy Governor Jonathan Heath deleted tweets on the IMF’s inflation forecast for Mexico, saying his chief adviser had given him the wrong data. Heath apologized for distributing the incorrect information. (BBG)

BRAZIL: Brazil's central bank said on Wednesday it would resume data release that were suspended due to a strike by its employees, including a weekly survey seen as critical for the monetary policy conduction. The central bank's weekly FOCUS survey compiles data from over 100 private economists for macroeconomic indicators, including inflation and interest rates. It was last released on March 28 and will be returned to normal next Tuesday, said the central bank. (RTRS)

RUSSIA: Senior Ukrainian negotiators on Wednesday offered to hold special talks with Russia in Mariupol without conditions in a bid to evacuate troops and civilians from the besieged port city. Negotiator Mykhailo Podolyak tweeted on Wednesday that the talks could be "one on one. Two on two. To save our guys, (the far right) Azov (battalion), military, civilians, children, the living and the wounded". (RTRS)

RUSSIA: Russian forces said they will seize the Mariupol steel plant that is the last main stronghold of resistance in the besieged city on Thursday after Ukraine proposed talks on evacuating troops and civilians there. Mariupol would be the biggest city to be seized by Russia since invading Ukraine eight weeks ago in an attack that has taken longer than some military analysts expected, seen over five million people flee abroad and turned towns and cities to rubble. "Before lunchtime, or after lunch, Azovstal will be completely under the control of the forces of the Russian Federation," Ramzan Kadyrov, the head of Russia's republic of Chechnya, whose forces have been fighting in Ukraine, said of the steel plant. (RTRS)

RUSSIA: Evolving intelligence indicates the Russian government is exploring options for potential cyberattacks, while some cybercrime groups are looking to aid Moscow, security agencies from the U.S., Australia, Canada, New Zealand, and the U.K. said in a joint advisory. “This activity may occur as a response to the unprecedented economic costs imposed on Russia as well as materiel support provided by the United States and U.S. allies and partners,” the advisory said, adding the cybersecurity agencies behind the joint assessment are urging “critical infrastructure network defenders to prepare for and mitigate potential cyber threats.” (BBG)

RUSSIA: Russia properly notified the United States ahead of its test launch of an intercontinental ballistic missile, the Pentagon said on Wednesday, adding it saw the test as routine and not a threat to the United States. Russia said earlier on Wednesday it had conducted a first test launch of its Sarmat intercontinental ballistic missile, a new addition to its nuclear arsenal which President Vladimir Putin said would give Moscow's enemies something to think about. (RTRS)

RUSSIA: Russia's nuclear forces will start taking delivery of the new Sarmat intercontinental ballistic missile this year once testing is complete, Tass quoted the head of the Roscosmos space agency as saying on Wednesday. Dmitry Rogozin said deliveries would start "in the autumn of this year," it reported. Earlier in the day Russia said it had conducted a first test launch of the missile. (RTRS)

RUSSIA: President Joe Biden will deliver an update on the Russian invasion of Ukraine on Thursday as he works to complete a new arms package for its military. Biden is to address Americans from the White House Roosevelt Room at 9.45 a.m. (1345 GMT) and a source familiar with the planning said he is "expected to provide an update on our efforts to support Ukraine and the assistance we are providing.” The new arms package was likely to be roughly the same size as an $800 million one announced last week but details were still being worked out, another U.S. official told Reuters earlier. (RTRS)

U.S./RUSSIA/CHINA: During a meeting with NATO representatives in Brussels on Wednesday, Wendy Sherman, the US deputy secretary of state, also raised concerns over China’s “support for Russia’s aggression, including through its amplification of Russian disinformation about NATO” and the war in Ukraine. Sherman “called for continued strong Transatlantic coordination to defend the rules-based international order”, the State Department said in a statement. (Al Jazeera)

RUSSIA: Group of Seven finance ministers and central bankers condemned Russia’s “unjustifiable” war in Ukraine and will work to isolate the country from the global economy, according to a G-7 statement released by Japan’s finance ministry. They are also closely coordinating with partners to increase costs of war for Russia, according to the statement. (BBG)

RUSSIA: Top finance officials from Britain, the United States and Canada walked out of Wednesday's G20 meeting as Russian representatives spoke, UK finance minister Rishi Sunak said, exposing deepening divisions over Russia's continued presence in the body. Ukrainian officials in attendance also walked out of the meeting of top finance officials from the world's 20 largest economies, according to a source familiar with the meeting. "Earlier my representatives, along with US & Canadian counterparts left today's G20 meeting in Washington as Russian delegates spoke," Sunak said on Twitter. "We are united in our condemnation of Russia's war against Ukraine and will push for stronger international coordination to punish Russia." (RTRS)

RUSSIA: The Biden administration is resisting growing calls from U.S. lawmakers, former diplomats and others to reopen the U.S. Embassy in Kyiv, a move advocates say would send a signal of Western strength and unity to Russia as its war on Ukraine nears the two-month mark. Multiple U.S. diplomats privately say they want an American return to the Ukrainian capital, an area from which Russian forces have withdrawn. More than a dozen European countries, including Slovenia, Italy and Spain, as well as the European Union, already have reopened their Kyiv missions or intend to do so. And Ukrainian President Volodymyr Zelenskyy has praised the governments that have returned, saying they are sending “a clear signal to the aggressor.” (POLITICO)

RUSSIA: The U.S. Treasury Department announced Wednesday that it expanded its wide raft of sanctions to include businesses and individuals that are helping Russia evade the impact of economic penalties imposed on Moscow. Treasury officials said the department is now targeting Russian commercial bank Transkapitalbank, as well as a network of more than 40 people including oligarch Konstantin Malofeyev it believes are helping the Kremlin skirt a wave of economic punishments. The Biden administration also said it’s cracking down on companies operating in Russia’s virtual currency mining industry, including Bitriver, that help the country monetize its exports and other natural resources. (CNBC)

RUSSIA: Russia was judged to have breached the terms of two bonds by a derivatives panel, marking another milestone on the nation’s path to its first foreign debt default in a century. The Credit Derivatives Determinations Committee said Wednesday that its payment of rubles on two dollar bonds was a “Potential Failure-to-Pay” event for credit-default swaps. The group, which includes Goldman Sachs Group Inc., Barclays Plc and JPMorgan Chase & Co., said the potential failure happened on April 4. The nation could still avert a default if it pays bondholders in dollars before a 30-day grace period ends on May 4. (BBG)

RUSSIA: Russia's VTB bank plans to use a mechanism of payments in roubles for its foreign-currency denominated eurobonds, Interfax news agency quoted a management board member as saying on Wednesday. Interfax also quoted Dmitry Pyanov as saying the bank paid a coupon on a subordinated dollar-denominated eurobond in roubles. (RTRS)

METALS: BHP Group on Thursday reported a lower-than-expected iron ore production for the third quarter, as pandemic-related labour crunch and planned track renewal works hurt the miner's efforts to boost production in Pilbara in Western Australia. The world's largest listed miner said iron ore production in the June quarter is also expected to be impacted by lingering COVID-related worker absenteeism, but did not change its forecast for fiscal 2022. Iron ore production from Western Australia came in at 66.7 million tonnes (Mt) in the three months to March 31, BHP said, lower than a consensus estimate of 70 mt compiled by Visible Alpha. (RTRS)

METALS: Peru will declare a state of emergency near Southern Copper Corp's Cuajone mine, the country's prime minister said on Wednesday, as protests hit top mines in the Andean nation, halting 20% of national copper output. Peru is the world's No. 2 producer of the red metal. Impoverished communities in Peru's copper-rich Andes have been staging growing protests against mining companies including Cuajone, MMG Ltd's Las Bambas and Glencore's Antapaccay. Cuajone suspended operations on Feb. 28 after residents of a nearby community shut down water supply to the mine, demanding financial compensation and a share of future profits. (RTRS)

METALS: BHP Group Ltd cut its annual copper production outlook on Thursday as operations at its Escondida project in Chile took a hit over protests by workers and environmental activists, as well as labour shortages due to rising COVID-19 cases. Chile, the world's top copper producer, earlier this month sued BHP among others miners over alleged environmental damages caused by its operations in the Atacama salt flats. That, along with road blockades, threats of work stoppage over alleged worker contract breaches, and surging COVID-19 infections at Escondida has affected production at the project, which houses the world's largest copper deposit. Copper production from Escondida is now expected between 1,000 thousand tonnes (kt) and 1,030 kt for 2022, down from its previous range of 1,020 kt to 1,080 kt, resulting in a slight downgrade to total copper output forecast to between 1,570 kt and 1,620 kt. (RTRS)

OIL: Washington and Brazil have discussed the South American nation's role in keeping a lid on global crude prices since Russia's invasion of Ukraine, Brazilian Energy Minister Bento Albuquerque told Reuters in an interview on Wednesday. Brazil, with a current output of around 3 million barrels of oil per day (bpd), has been increasing production for years and is aiming for a 10% increase to 3.3 million bpd in 2022. Asked if the United States had reached out to talk about potential production increases, Albuquerque said the two countries were cooperating. "I already had two meetings with energy secretary (Jennifer) Granholm, and we have been talking about this, the importance to stabilize the offer and demand of oil and gas around the world," he said. (RTRS)

CHINA

PBOC: The benchmark Loan Prime Rate is still likely to be cut by 10 to 15 basis points in May and June to help stabilize the economy, the Shanghai Securities Journal reported citing analysts after the April LPR was left unchanged on Wednesday. The recent cut to reserve requirement ratio as well as the lowering of deposit rate ceiling for smaller banks help to reduce costs of banks, which should prompt them to lower corporate loan interest rates, the newspaper said citing Wang Qing, chief analyst at Golden Credit Rating. Corporate loan interest rates fell by 0.21 percentage points year-on-year to a record low of 4.4% in Q1, the newspaper added. (MNI)

YUAN: The yuan is expected to further depreciate this year as export growth is likely to slow while the Federal Reserve is seen accelerating rate hikes and balance sheet reductions, but the yuan still has ample buffer space given its last low point was around 7.1 against the U.S. dollar, the Securities Times reported citing analysts. There will be no panic about yuan devaluation as its two-way flexibility has been greatly strengthened, and the currency mismatch has also been significantly improved, the newspaper said citing Guan Tao, chief economist at BOC Securities. Guan warned that the yuan may come under pressure again should the Fed tightens more than expected, which could burst asset bubbles and trigger a recession, the newspaper said. (MNI)

ECONOMY: A prolonged slowdown in China would have substantial global spillovers, IMF Managing Director Kristalina Georgieva said on Thursday (Apr 21), but added that Beijing has room to adjust policy to provide support. In a video speech to the annual Boao Forum for Asia, Georgieva said China's actions to counter its economic slowdown are vital for the global recovery. "Fortunately, China has policy space to provide macroeconomic policy support, including shifting the focus toward vulnerable households to strengthen consumption, which can also help support China's climate goals by steering economic activity to lower-carbon sectors," Georgieva added. "Stronger policy efforts in the property sector can also help secure a balanced recovery." (RTRS)

PROPERTY: China’s local commercial banks are likely to reduce mortgage rates while the local governments may ease the use of public funds, loosen purchase requirements and boost personal mortgages to release housing demand, Shanghai Securities News said citing Lian Zhan, chief economist of Zhixi Investment Research Institute. China’s loan rate will continue to steadily fall, supporting industries and SMEs and self-employed badly hurt by the pandemic, stabilize economic fundamentals, the newspaper said interpreting a central bank policy meeting on April 19. Future loan rates will likely depend on reduced LPR plus differentials, and lower refinancing to deliver to weak economic links. (MNI)

INFLATION: China will ensure a stable supply of important agricultural products as well as increasing energy supply in the face of high inflation overseas, the China Securities Journal reported citing the State Council executive meeting on Wednesday. China will expand coal production capacity by 300 million tons this year, promote the clean use of coal and strengthen the building of coal reserves, the meeting said. (MNI)

BANKING: The local banking and insurance regulator in Shanghai, China's financial hub, said on Thursday it will step up financial support to help with the resumption of production while the city battles a resurgence of COVID-19 infections. The Shanghai Office of the China Banking and Insurance Regulatory Commission also urged banks to extend loans to firms to help them resume work. (RTRS)

PENSIONS: Participants may pay a maximum of 12,000 yuan ($1,872) per year into the pension, which is voluntary and market-based, according to an opinion posted on the government’s website. Fund can be used to invest in financial products including bank wealth management products, savings deposits, commercial pension insurance and mutual funds. Some cities will be chosen to start the trial for one year. (BBG)

CORONAVIRUS: President Xi Jinping defended China’s lockdown-dependent approach to fighting the pandemic, even as he sought to reassure the world that the country was still committed to opening its economy. Nations must expand cooperation to ensure a recovery from the virus-fueled downturn of the past two years, Xi told the opening ceremony of the Boao Forum for Asia via video link Thursday. While Xi made no mention of the Shanghai lockdown or the growing debate over the costs of China’s Covid Zero strategy, he reaffirmed the underlying goal of minimizing deaths. “We need to work together to defend people’s lives and health,” Xi told the annual event held in China’s southernmost Hainan province. “Safety and health are the prerequisite for human development and progress. For humanity to clinch the final victory against the Covid-19 pandemic, more hard efforts are needed.” (BBG)

OVERNIGHT DATA

CHINA MAR SWIFT GLOBAL PAYMENTS CNY 2.20%; FEB 2.23%

AUSTRALIA MAR RBA FX TRANSACTIONS GOVERNMENT -A$1,319MN; FEB -A$819MN
AUSTRALIA MAR RBA FX TRANSACTIONS MARKET +A$1,298MN; FEB +A$795MN
AUSTRALIA MAR RBA FX TRANSACTIONS OTHER -A$1,445MN; FEB -A$163MN

NEW ZEALAND Q1 CPI +6.9% Y/Y; MEDIAN +7.1%; Q4 +5.9%
NEW ZEALAND Q1 CPI +1.8% Q/Q; MEDIAN +2.0%; Q4 +1.4%

NEW ZEALAND MAR NON RESIDENT BOND HOLDINGS 59.0%; FEB 59.4%

SOUTH KOREA MAR PPI +8.8% Y/Y; FEB +8.5%

SOUTH KOREA APR 1-20 TRADE BALANCE -$5,199.0MN; MAR -$2,078.0MN
SOUTH KOREA APR 1-20 EXPORTS +16.9% Y/Y; MAR +10.1%
SOUTH KOREA APR 1-20 IMPORTS +25.5% Y/Y; MAR +18.9%

CHINA MARKETS

PBOC INJECTS CNY10 BILLION VIA OMOS, LIQUIDITY UNCHANGED

The People's Bank of China (PBOC) injected CNY10 billion via 7-day reverse repos with the rate unchanged at 2.1% on Thursday. This keeps the liquidity unchanged after offsetting the maturity of CNY10 billion repos today, according to Wind Information.

• The operation aims to keep liquidity reasonable and ample, the PBOC said on its website.
• The 7-day weighted average interbank repo rate for depository institutions (DR007) rose to 2.0636% at 09:25 am local time from the close of 1.7857% on Wednesday.
• The CFETS-NEX money-market sentiment index closed at 46 on Wednesday vs 45 on Tuesday.

PBOC SETS YUAN CENTRAL PARITY AT 6.4098 THURS VS 6.3996

The People's Bank of China (PBOC) set the dollar-yuan central parity rate higher at 6.4098 on Thursday, compared with 6.3996 set on Wednesday.

MARKETS

UP TODAY (Times GMT/Local)

Date	GMT/Local	Impact	Flag	Country	Event
21/04/2022	0645/0845	**		FR	Manufacturing Sentiment
21/04/2022	0900/1100	***		EU	HICP (f)
21/04/2022	-			EU	ECB Lagarde & Panetta in IMF/World Bank Meetings
21/04/2022	1230/0830	**		US	Jobless Claims
21/04/2022	1230/0830	**		US	Philadelphia Fed Manufacturing Index
21/04/2022	1230/0830	**		US	WASDE Weekly Import/Export
21/04/2022	1300/1400			UK	BOE Mann Speaks at BOE Webinar
21/04/2022	1400/1600	**		EU	Consumer Confidence Indicator (p)
21/04/2022	1430/1030	**		US	Natural Gas Stocks
21/04/2022	1500/1100			US	Fed Chair Jerome Powell
21/04/2022	1530/1130	**		US	NY Fed Weekly Economic Index
21/04/2022	1530/1130	**		US	US Bill 04 Week Treasury Auction Result
21/04/2022	1530/1130	*		US	US Bill 08 Week Treasury Auction Result
21/04/2022	1630/1730			UK	BOE Bailey at Peterson Institute Event
21/04/2022	1630/1230			US	St. Louis Fed's James Bullard
21/04/2022	1700/1300	**		US	US Treasury Auction Result for TIPS 5 Year Note
21/04/2022	1700/1300			US	Fed Chair Jerome Powell
21/04/2022	1700/1900			EU	ECB Lagarde at IMF Debate