Before an hour
The Reserve Bank of Australia gives the middle peak rate already reached: CBA
The Reserve Bank of Australia’s latest monetary policy statement shows that the central bank has already reached its peak rate of 3.85%, the Commonwealth Bank of Australia said in a statement on Friday.
“Our take on this important guidance is that the board is poised to raise interest rates again this cycle. However, another rate hike would require economic data, particularly inflation, GDP, the unemployment rate and wages, to come out stronger than their updated forecasts,” CBA economists wrote.
“In other words, we do not believe that the RBA will hike interest rates again if economic data comes in line with its forecasts or weakens,” they wrote.
– Jihye Lee
Before an hour
According to Goldman Sachs, China’s services stocks point to a “slightly slower” recovery
China’s Caixin Services PMI and the release from the National Bureau of Statistics point to a “slightly slower” recovery, economists at Goldman Sachs said in a note on Friday.
“It suggests that the recovery in the services sector continued in April, but at a slightly slower pace,” they wrote.
Economists noted that services-related inflation remained at elevated levels for the month, particularly in input prices.
– Jihye Lee
Before an hour
HSBC shareholders vote on spin-off of Asia business
HSBC shareholders are set to vote on proposals, including the spin-off of the Asian business, at the bank’s annual meeting on Friday.
Agenda resolutions 17 and 18, introduced by a group of investors led by Ken Lui, call for a “strategic review” of the company, including the spinoff proposal and fixed dividends.
These were backed by HSBC’s main shareholder, Ping An Insurance, but HSBC advised investors to oppose the two resolutions, a stance backed by investor advisory firms ISS and Glass Lewis.
Since these are considered “special resolutions”, Luis’ motions must be accepted with 75% of the votes cast.
Read the whole story here.
— Lim Hui Jie
2 hours ago
Inflation in the Philippines eases for the third straight month to 6.6% in April
Headline inflation in the Philippines fell for the third straight month to 6.6% yoy, down from 7.6% in March.
This was also lower than economists’ expectations for a 7% rise.
In a press release, the country’s statistics agency said the downward trend was mainly driven by a lower inflation rate for food and non-alcoholic beverages, which recorded 7.9% compared to 9.3% in March.
Transportation was the second-biggest contributor to the downtrend, with an inflation rate of 2.6% in April versus 5.3% in March.
Inflation in the Philippines hit a 15-year high of 8.7% in January, the highest since October 2008.
— Lim Hui Jie
3 hours ago
Australia still sees “further tightening” of monetary policy even after the surprise rate hike
Australia’s central bank still sees “further monetary tightening” may be needed to curb inflation, the Reserve Bank of Australia said in its May monetary policy statement.
The central bank noted that this “will depend on how the economy and inflation develop”.
This comes as the Reserve Bank of Australia surprised markets by raising interest rates by 25 basis points to 3.85% on Tuesday.
In its statement, the RBA lowered its near-term inflation and GDP forecasts but said inflation is still not expected to return to the upper end of the 2-3% target range by mid-2025.
The central bank also expects goods inflation to moderate further, while energy and services inflation are expected to remain elevated, with the service sector expected to see growth in labor costs and rents.
— Lim Hui Jie
4 hours ago
Apple’s Asian suppliers mixed after profits beat estimates
3 hours ago
Indonesia’s economy grew year-on-year in the first quarter of 2023
Indonesia’s gross domestic product grew by 5.03% year-on-year in the first quarter of 2023.
Robust economic growth beat expectations of 4.95% forecast in a Portal poll and exceeded the 5.01% growth recorded in the first quarter of last year.
On a quarterly basis, Indonesia’s economy shrank 0.92%, less than a 1% contraction forecast. The economy grew by 0.36% in the last quarter of last year.
Based on output, the transportation and storage sector saw the strongest growth at 15.93%, the country’s statistics department said. In terms of expenditure, the export of goods and services recorded the highest growth at 11.68%.
— Lim Hui Jie
4 hours ago
China’s Caixin Services Purchasing Managers’ Index slides
China’s Caixin/S&P Global services purchasing managers’ index fell to 56.4 in April from 57.8 in the previous month.
The reading marked the second-highest reading since November 2020 and the fourth straight month above the 50 mark, which separates growth and contraction.
The survey showed an expansion in service activity despite disappointing factory activity in mainland China earlier this week.
According to Wang Zhe, senior economist at Caixin Insight Group, the reading suggests services activity is still “recovering quickly.”
– Jihye Lee
3 hours ago
Hong Kong’s IPO market is poised for a rebound, but its biggest listing to date has flopped
The Hong Kong Stock Exchange in Hong Kong, China on Wednesday July 13, 2022.
Paul Yeung | Bloomberg | Getty Images
Hong Kong’s biggest-ever listing of 2023 flopped last week, suggesting the market still needs time to recover despite hopes of a recovery.
Shares in Chinese liquor maker ZJLD Group plunged nearly 18% in their first day of trading on April 27.
“Sentiment in the IPO markets has not yet improved. Many industries are still suffering,” said Ringo Choi, EY’s Asia Pacific IPO head.
“The underlying economy is not doing well,” said Irene Chu, partner at KPMG China. “Concern remains about the high-yield environment, and much of the attention in the Greater China region is on the economic recovery,” Chu said.
ZJLD Group’s share price has been relatively flat since last week.
Read the whole story here.
– Sheila Chiang
5 hours before
Expected week: trade and inflation in China, unemployment in South Korea, industrial production in India
For the Asia-Pacific markets, a slew of economic data is due out next week, including inflation data for China, Indian industrial production and the Philippines trade balance.
Taiwan reports its trade data on Monday. Economists at Citi expect Taiwan’s exports fell 21.4% yoy and imports 22.6% yoy in April.
“Non-tech exports to China have yet to recover (as trade data out of China shows) and lower commodity prices will reduce the value of exports,” Citi economists wrote in a note Thursday.
China’s April trade data will also be released on Tuesday along with Malaysia’s gross domestic product.
South Korea’s March current account balance and April unemployment rate are expected on Wednesday.
China’s producer price index and consumer price index are due to be released on Thursday. In March, China’s CPI rose marginally by 0.7% yoy, while the PPI recorded a 2.5% yoy decline. The Philippines also report their gross domestic product for the first quarter on this day.
India’s industrial production for March will be released on Friday after registering 5.6% yoy growth in February. Citi economists expect headline inflation to ease to 4.8% year over year, the first reading below 5% since November 2021.
– Jihye Lee
6 hours ago
CNBC Pro: Goldman Sachs names a number of energy companies to buy now as attitudes shift
Goldman Sachs has identified a number of energy stocks to hold ahead of an expected reversal in market sentiment towards the oil and gas sector.
The Wall Street Bank said it has seen greater ownership of the energy sector due to a change in how ESG investors — or those who consider environmental, social and governance factors — approach investing. Rather than completely divesting themselves of fossil fuels, they are more focused on working with these companies to achieve better environmental outcomes, according to the bank.
ESG funds increased their exposure to the energy sector by 8 percentage points in the first three months of this year, Goldman added.
CNBC Pro subscribers can read more here.
— Ganesh Rao
6 hours ago
CNBC Pro: Intel vs AMD? Analysts favor a stock for its long-term foray into AI
13 hours ago
Goldman Sachs advises investors to be overweight non-US markets
If markets avoid a recession, Goldman Sachs says interest rates are likely to rise, putting pressure on valuations. In this case, the bank is asking investors to position themselves on markets outside the US
“We continue to recommend overweight non-US markets, which are cheap and have a similar growth profile. Returns for dollar-based investors should also benefit from a gradually lower dollar,” several analysts wrote in a note on Thursday.
The company added that it favors high-quality growth and stable-margin businesses “along with deep value — energy, natural resources and European banks.” Our strategists in the US and Asia also favor high-quality and defensive stocks.
— Hakyung Kim
16 hours ago
Every stock in the closely tracked regional banking index is trading down
15 hours ago
Western Alliance shares lose more than half of their value, trading halted due to volatility
Trading in shares of Western Alliance Bancorp was halted several times on Thursday as the stock plunged 58.2%. The move comes as regional banking competitor PacWest Bancorp posted a 59% loss on news it was considering a sale. The SPDR S&P Regional Banking ETF lost more than 9% on Thursday amid uncertainty.
See grafic…
Western Alliance Bancorp shares
18 hours ago
Claims, productivity, labor costs and trade data miss estimates
A round of economic data points Thursday morning mostly came in worse than Wall Street was expecting.
Jobless claims for the week ended April 29 totaled 242,000, higher than the Dow Jones estimate of 236,000. Labor productivity fell 2.7% in the first quarter from an estimate of 1.9%, while unit labor costs, a measure of inflation, rose 6.3% in the first quarter, beating the 5.5% expectation.
Eventually, the trade deficit narrowed to $64.2 billion, but that was higher than the $63.1 billion estimate.
– Jeff Cox
18 hours ago
As expected, the ECB will raise interest rates by a quarter point
The European Central Bank on Thursday hiked interest rates by a quarter of a percentage point in line with market expectations, noting that inflation is still too high and underlying pressures persist.
A day after the US Federal Reserve announced a similar hike, the ECB raised interest rates to 3.75%, 4% and 3.25%, respectively, near a 15-year high. The Fed’s move brought its benchmark rate to a target range of 5% to 5.25%.
Headline inflation in the eurozone is around 7%, well above the ECB’s target of 2%.
– Jeff Cox