Calm before the storm as all eyes on US “Liberation Day” tariff announcements by US Pres Trump

Asia Market Update: Calm before the Storm as all eyes on US “Liberation Day” tariff announcements by US Pres Trump (delayed by one hour to Wed 4pm ET, 20:00 GMT).

General trend

- Little action in quiet Asian trading for equities and currencies as the entire financial and trading world gears up for the US tariff announcement to be given by Pres Trump in the Rose Garden of the White House at 4pm ET, Wed. UST yields ticked up ~3bps from yesterday’s lows.

- Outdoing other currencies were the Aussie +0.4% and Kiwi +0.4%, the commodity currencies perhaps anticipating a gentler outcome for their China and global trade outlook than that currently held by financial markets. Note reports after the US cash close that the US Trade Rep's office is preparing a third tariff option on a subset of nations likely to be less than the universal 20% tariffs proposed.

- Last minute jostling by various countries in a bid to avoid US tariffs; Thailand Commerce Ministry plans tariff cuts for US products, as Canada tries to avoid counter-tariffs that risk Canadian jobs and price increases, while Fin Min Kato of Japan reiterated that the govt has been considering various steps, known to include requesting for steel and auto exemptions.

- In special election results US Republicans won both US House seats in Florida that were up for grabs to replace Mike Walz and Matt Gaetz joining the Trump Admin. The results extend the GOP majority in the House to 220-213 (from 218) but the wins were by much narrower margins than on Nov 5th, when Pres Trump won each District by around 30 points.

- In the other “early referendum on the Trump Admin”, results of Wisconsin election for State Supreme Court and Superintendent of Public Instruction saw Democrat Susan Crawford win to maintain the 4-3 liberal majority on the WI Court; Note that Republican-promoted Voter ID requirements were passed into state law.

- South Korea CPI figures for March remained within 2% target range.

- Bank of Japan (BOJ) Gov Ueda was in parliament again for more Q&A yet again, saying that US tariffs make the picture "unclear".

- BOJ reduced bond purchases inline as per April guidance given on Mar 31st.

- South Korea acting-Pres Han appealed for calm ahead of Apr 4th (Fri) Constitutional Court decision on Pres Yoon's impeachment, amid widespread security concerns with mass mobilizations by both sets of supporters expected.

- US equity FUTs -0.1% during Asian trading.

Looking ahead (Asian-weighted, on Asian time zone)

- Wed Apr 2nd Overnight US “Liberation Day” tariff announcement by US Pres Trump (Wed 4pm ET, 20:00 GMT).

- Thu Apr 3rd AU Feb Trade Balance, (Thu night US Mar ISM Mnfg PMI).

- Fri Apr 4th JP Feb Household Spending, (Fri night US Mar NFP, Fed Chair Powell).

Holidays in Asia this week

- Mon Mar 31st India, Indonesia, Malaysia, Philippines, Singapore.

- Tue Apr 1st Indonesia, Malaysia.

- Wed Apr 2nd Indonesia.

- Thu Apr 3rd Indonesia, Taiwan.

- Fri Apr 4th China, Hong Kong, Indonesia, Taiwan.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.1% at 7,928.

- Australia Feb Building Approvals M/M: -0.3% v -1.3%e.

- Australia sells A$800M v A$800M indicated in 3.75% May 2034 bonds; Avg Yield: 4.3260% v 4.1813% prior; bid-to-cover 3.91x v 3.61x prior.

- Reserve Bank of Australia (RBA) Asst Gov Kent (Financial Markets): To increase the price of all new OMO repos by 5bps to 10bps over the Cash Rate target - speech at The RBA’s Monetary Policy Implementation System – Some Important Updates – at the KangaNews Debt Capital Market Summit, Sydney.

- New Zealand Feb Building Permits M/M: 0.7% v 2.6% prior.

- Fonterra Global Dairy Trade Auction Dairy Trade price index: +1.1% v -0.5% prior.

China/Hong Kong

- Hang Seng opens -0.2% at 23,167; Shanghai Composite opens -0.1% at 3,344.

- China sees stable liquidity despite upcoming bond supply; PBOC will offset any liquidity pressure during Q2 - Shanghai Securities News.

- Standard Chaterered Raises China 2025 GDP forecast to 4.8% (prior 4.5%).

- (US) Follow up: Trump Administration discussing revoking de minimis exemption; Reciprocal tariffs likely to take effect immediately - CNBC.

- China MOF sells 2-year Bonds, 10-year Bonds.

- China reportedly looking for trade cooperation with Netherlands and Europe - State Radio [overnight update].

- META (CN) Reportedly US Senate Committee will review alleged efforts on Facebook to build censorship tools for China as part of an effort to gain market entry into China - Press citing letter.

- China President Xi: It is right for China and India to partner [overnight update].

- China National Financial Regulatory Administration (NFRA) releases action plan for banking and insurance industry to support high-quality development of science and tech [overnight update].

- China PBOC sets Yuan reference rate: 7.1793 v 7.1775 prior.

- China PBOC Open Market Operation (OMO): Injects CNY230B in 7-day reverse repos; Net drains CNY225B v drains CNY313B prior.

Japan

- Nikkei 225 opens +0.2% at 35,714.

- Japan Mar Monetary Base Y/Y: -3.1% v -1.8% prior.

- Bank of Japan (BOJ) Gov Ueda: Whole picture of US tariffs remain "unclear" - Q&A in parliament.

- DPP [Japan opposition party] Policy Chief: A May BOJ rate hike would be too early - Press.

- Japan Finance Min Kato: Concerned US tariffs are not consistent with WTO agreements; notes the government has been considering various steps.

- Bank of Japan (BOJ) announcement related to outright bond buying operations: <1 Year; 1-3 Years; 3-5 Years; >25 Years (Reduced purchase amounts inline with Apr guidance).

Korea

- Kospi opens +0.2% at 2,525.

- SOUTH KOREA MAR CPI M/M: 0.2% V 0.1%E; Y/Y: 2.1% V 1.9%E.

- Bank of Korea (BOK); Inflation expected to remain stabilized around 2% target level - post-CPI comments.

- South Korea financial watchdog (FSS) Chief Lee said to resign - financial press.

- South Korea acting Pres Han appeals for calm ahead of Apr 4th (Fri) Constitutional Court decision on Pres Yoon's impeachment; Police to step up security - financial press.

- Follow up: South Korea parliament introduces formal impeachment motion for Fin Min Choi - Korean press.

Other Asia

- Thailand Commerce Ministry: Thai chips could face 25% US tariffs; Thailand might see $7.0-8.0B impact from the US reciprocal tariffs.

- Indonesia Mar PMI Manufacturing: 52.4 v 53.6 prior (fourth month of expansion).

- Malaysia Mar PMI Manufacturing: 48.8 v 49.7 prior (10th month of contraction).

- Philippines Mar PMI Manufacturing: 49.4 v 51.0 prior (Moves into contraction after 18 months of expansion)- (TW) US National Security Council: We remain committed to maintaining peace and stability across the Taiwan Strait, and encourage peaceful resolutions to cross-strait issues.

- Thailand Mar Business Sentiment Index: 50.2 v 48.9 prior [overnight update].

- Vietnam Central Bank (SBV) leaves Refinance Rate unchanged at 4.50% [overnight update].

North America

- (US) Barclays says US President Trump may claim currency manipulation to justify tariffs – US financial press.

- (CA) Follow Up: Canada to avoid counter-tariffs that risk Canadian jobs and price increases - Globe and Mail.

- (US) Results of US House Florida Special Elections for 1st and 6th Districts: GOP’s House edge boosted to 220-213 after Randy Fine (R) wins 6th District and Jimmy Patronis (R) wins 1st District.

- US Treasury Sec Bessent told lawmakers that the Wed tariffs are a 'cap' – CNBC.

- (US) Results of Wisconsin election for State Supreme Court and Superintendent of Public Instruction: Democrat Susan Crawford has been projected to win the open seat on the Wisconsin Supreme Court, the victory maintains the 4-3 Liberal majority on the court; Republican-promoted Voter ID requirements were passed into state law.

- (US) Fed's Goolsbee (voter): If we can get past this period of uncertainty, the underlying strength of economy is still there - financial press.

- (US) US Trade Rep's office is preparing a third tariff option on a subset of nations likely less than the universal 20% tariffs proposed - WSJ.

- (US) MORE PRESS REPORTS THAT WHITE HOUSE AIDES HAVE DRAFTED A PROPOSAL TO IMPOSE TARIFFS OF AROUND 20% ON AT LEAST MOST IMPORTS TO THE UNITED STATES – WAPO [overnight update].

- (CA) Canada PM Carney: We'll place retaliatory measures against the US if there are additional measures put against Canada on Wednesday.

- (MX) Mexico Finance Ministry Budget Document: Estimates 2025 GDP growth at 1.5-2.3%, 2026 GDP growth at 1.5-2.5%; estimates end of 2025 inflation at 3.5%, end of 2026 inflation at 3.0%.

- (US) Fed’s Barkin (non-voter for 2025): Bond market is pricing in more recession risk - Q&A responses.

- (US) MAR FINAL S&P MANUFACTURING PMI: 50.2 V 49.8E (1ST MONTH OF EXPANSIONARY TERRITORY).

- (US) MAR ISM MANUFACTURING: 49.0 V 49.5E; Prices Paid: 69.4 v 64.6e; New Orders: 45.2 v 48.4e.

- (US) FEB JOLTS JOB OPENINGS: 7.57M V 7.66ME; Quits rate 2.0% v 2.1% prior.

- (US) Mar Dallas Fed Services Activity: -11.3 v 4.6 prior.

- (MX) Mexico Mar Manufacturing PMI: 50.3 v 47.6 prior (1st expansion in 9 months).

- (US) Atlanta Fed GDPNow: Cuts Q1 GDP estimate from -2.8% to -3.7%.

- (MX) Pres Sheinbaum and Canada PM Carney held phone call ahead of Trump's April 2nd tariff day; Agree on need to safeguard North American competitiveness.

- (US) Trump Administration discussing revoking de minimis exemption; Reciprocal tariffs likely to take effect immediately - CNBC.

Europe

- (DE) German Banking Assoc: Cuts 2025 GDP growth forecast from 0.7% to 0.2%.

- (RU) Follow up: 50 US Senators threaten to impose 500% tariffs on countries that buy oil from Russia, relates to primary and secondary sanctions against Russia and ‘actors’ supporting Russia’s ‘aggression’ in Ukraine – financial press [update].

- (RU) Senior Russian official said to visit Washington DC for talks with Trump Administration this week - CNN.

- (KZ) Kazakhstan crude oil and condensate production for March said to rise to record 2.17M bpd - press.

- (CN) China reportedly looking for trade cooperation with Netherlands and Europe - State Radio.

- (CA) PM Carney: We'll place retaliatory measures against the US if there are additional measures put against Canada on Wednesday.

- (IT) Italy Mar New Car Registrations Y/Y: +6.2% v -6.3% prior.

- (EU) Commission Pres Von der Leyen: To assess US announcement on tariffs carefully and give a calibrated response; We have strong plan to retaliate if necessary and will use it [overnight update].

Levels as of 00:20 ET

- Nikkei 225 +0.4%, ASX 200 +0.1%, Hang Seng -0.2%; Shanghai Composite +0.1%; Kospi -0.6%.

- Equity S&P500 Futures -0.1%; Nasdaq100 -0.1%; DAX flat; FTSE100 flat.

- EUR 1.0778-1.0831; JPY 148.98-150.14; AUD 0.6232-0.6302; NZD 0.5663-0.5725.

- Gold flat at $3,146/oz; Crude Oil +0.1% at $71.24/brl; Copper +0.6% at $5.0640/lb.