Oil prices slid back to US$100/barrel overnight after the G7 said it’s ready to release reserves. China’s consumer price inflation rose in February, but producer prices are still falling. So there’s still room for China to cut rates. And Asia’s currencies are hit hard.
And then in our deep-dive interview, ANZ Greater China Economist Vicky Xiao Zhou explores China’s slower growth target, albeit with much better exports than most expected last year.
5 things to know in 5 minutes:
Oil prices have backed off their post Ukraine war highs overnight, sliding from almost US$120/barrel for Brent to be at US$99.90 by 4am Sydney/Melbourne time, thanks to reassurances from the world’s biggest economies that they would release reserves into global markets to dampen energy inflation, says ANZ Economist Henry Russell. That contained the losses on US and European stock markets overnight, after stock indices in Japan and South Korea fell 5% and 6% earlier in the evening. Both are heavily reliant on oil and gas imports from the Middle East, which are blocked because of the closure of the Strait of Hormuz.
China’s annual Consumer Price Inflation rate rose in February to a three-year high of 1.3%, although seasonal price rises for the Chinese New Year Festival and higher oil prices meant the broader picture wasn’t as strong, says ANZ Senior China Strategist Zhaopeng Xing.
Zhaopeng still sees room for the People’s Bank of China to cut its key interest rate one more time, despite the rise in consumer price inflation, although not any time soon.
Asian currencies were hammered yesterday when oil prices were headed for US$120 a barrel, with all but Malaysia being net oil importers. Net foreign equity outflows from the region surged last week to US$14 billion, says ANZ Head of Asia Research Khoon Goh.
The Indonesian rupiah, the Indian rupee, and the Philippine peso were the hardest hit, says Khoon.
Cheers
Bernard.
PS: Catch you tomorrow with a preview of key US inflation figures due late on Wednesday.
