XAG/USD Remains Constructive Above $32.50

China's new home prices stalled month-on-month in January, official data showed on Wednesday, suggesting the crisis-hit property sector is struggling to stabilise despite continued government efforts to prop up the market.

Prices were unchanged for the second straight month, according to Reuters calculations based on National Bureau of Statistics data. On a year-on-year basis, new home prices fell 5%, narrowing a 5.3% drop the previous month.

Official data from January showed unsold new homes totalled 390.88 million square metres in 2024, marking a 16.2% increase from the previous year. Furthermore, new construction starts, measured by floor area, plummeted 23% annually last year.

Key indicators suggest a sustainable recovery in the property market remains uncertain, according to a research note from Moody's Ratings this week.

"We would expect a more sustainable recovery in property sales should there be positive income expectations, stable or rising property price expectations and lower inventory levels that indicate disciplined supply management," said Moody's Ratings.

Policymakers in the second half of last year ramped up efforts to support China's property market, which fell into a slump in 2021.

The crisis in the sector, triggered by a government-led campaign to rein in property developers' leverage, left many unable to repay debt and complete presold housing units. Home sales have tumbled and confidence sagged.

In the central bank's monetary policy implementation report released last week, the property sector joined the list of key areas marked for more credit support.

Source: Theedgemarkets

Japan’s exports rose at a faster clip in January as businesses ramped up orders just as US President Donald Trump unleashed a barrage of protectionist policies expected to take effect in coming months.

Exports measured by value increased 7.2% from a year earlier led by shipments of cars and ships, the Ministry of Finance reported Wednesday. That compared with the consensus estimate of a 7.7% gain. Shipments to China fell as the lunar new year holidays disrupted trade flows.

Imports surged 16.7% led by communication machinery and computers, and beat the median estimate of a 9.3% increase. Japan’s trade balance swung back into the red, with a deficit of ¥2.76 trillion (US$18.2 billion or RM80.9 billion), the largest in two years.

By region, shipments to the US rose 8.1%, while those to China fell 6.2%. Exports to Europe declined 15.1%.

The global trade outlook is increasingly uncertain. Trump said Tuesday he would likely impose tariffs on automobile, semiconductor and pharmaceutical imports of around 25%, with an announcement coming as soon as April 2.

His fresh tariffs against China already prompted retaliatory levies from Beijing, and the president has also threatened a range of measures against other nations, including 25% levies on steel and aluminum imports that will take effect in March and reciprocal tariffs on numerous trading partners.

Japan, whose two biggest trading partners are the US and China, is bracing for the potential impact and trying to minimise fallout. Tokyo has asked Trump to exclude it from the steel and aluminum steps as well as the reciprocal duties while it also seeks details regarding his other levy plans.

Japan’s longstanding trade surplus with the US continues to risk the ire of Trump, who favours using levies to close trade gaps with other nations. Japan’s trade surplus with the US was ¥477 billion in January. Auto exports to the US surged 21.8% in the month.

Source: Theedgemarkets

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Gold shipments from Singapore to the US climbed to the highest level in almost three years in January, a further sign of the ructions in bullion trading after pricing disparities opened up in key markets.

Volumes of the precious metal shipped from the Southeast Asian city-state to the US rose to about 11 tonnes last month, up 27% from December, and the largest amount since March 2022, according to data from state agency Enterprise Singapore. Typically, most flows from Singapore go to destinations in Asia.

The global gold market has been in upheaval in recent weeks, at a time when prices were already near record highs. Concerns that possible tariffs from US President Donald Trump’s administration could hit flows of precious metals helped to lift bullion futures in New York to an unusually wide premium over international benchmarks in London. That gap then pulled imports into the US.

“Metal is being shipped there from all locations where there are refineries,” said Nikos Kavalis, managing director at Metals Focus Ltd.

Singapore is home to one of Metalor Technology SA’s gold refineries, a facility certified by the London Bullion Market Association. A Singapore-based general manager from Metalor declined to comment.

Under normal conditions, most gold-bar exports from Singapore go to destinations across Asia, depending on where demand is good, according to Kavalis. When regional consumption isn’t enough, these bars go to London, the main terminal market for gold.

Futures traded at about US$2,925 (RM12,996) an ounce on the Comex on Tuesday, compared with spot metal at about US$2,912 an ounce in London, a difference of around US$13. In January, the premium was wider, topping US$50 toward the end of the month.

The last time there was a spike in gold flows from Singapore to the US came during the pandemic, when border and trade restrictions triggered concern about the ability to settle futures contracts. In July 2020, shipments from the city-state rose to about 26 tonnes.

Source: Theedgemarkets

NZD/USD drifts lower for the second straight day after the RBNZ’s expected 50 bps rate cut. 

Concerns about Trump’s reciprocal tariffs and trade war fears further weigh on the Kiwi. 

Subdued USD price action could lend support to the pair amid a generally positive risk tone.

The NZD/USD pair attracts some sellers for the second straight day and drops to a three-day low, around the 0.5680-0.5675 area after the Reserve Bank of New Zealand (RBNZ) announced its policy decision this Wednesday.

As was widely expected, the RBNZ lowered the Official Cash Rate (OCR) by 50 basis points (bps) from 4.25% to 3.75% following the conclusion of the February policy meeting. Moreover, the accompanying monetary policy meeting minutes indicated that the committee has scope to lower the OCR further through 2025. This, in turn, exerts some downward pressure on the New Zealand Dollar (NZD) and drags the NZD/USD pair away from a nearly two-month top touched earlier this week. 

The US Dollar (USD), on the other hand, struggles to capitalize on the previous day's positive move amid expectations that the Federal Reserve (Fed) would cut interest rates further this year. Apart from this, a generally positive tone around the equity markets caps the safe-haven Greenback and could offer some support to the risk-sensitive Kiwi. That said, worries about US President Donald Trump's reciprocal tariffs might hold back bulls from placing fresh bets around the NZD/USD pair.

Economic Indicator

RBNZ Interest Rate Decision

The Reserve Bank of New Zealand (RBNZ) announces its interest rate decision after its seven scheduled annual policy meetings. If the RBNZ is hawkish and sees inflationary pressures rising, it raises the Official Cash Rate (OCR) to bring inflation down. This is positive for the New Zealand Dollar (NZD) since higher interest rates attract more capital inflows. Likewise, if it reaches the view that inflation is too low it lowers the OCR, which tends to weaken NZD.

Source: FXSTREET

AUD/NZD appreciated as the RBNZ lowered its Official Cash Rate by 50 basis points on Wednesday.

Traders will closely monitor RBNZ Governor Adrian Orr’s press conference for clues on the central bank’s future policy direction.

Australia's Wage Price Index increased by 0.7% QoQ in Q4 2024, missing the expected 0.8% rise.

AUD/NZD extends its gains for the second successive session, trading around 1.1170 during Asian hours. The upside is driven by the Reserve Bank of New Zealand’s (RBNZ) decision to lower the Official Cash Rate (OCR) by 50 basis points (bps) from 4.25% to 3.75%, following the conclusion of the February policy meeting on Wednesday. The decision aligned with the market expectations.

Traders will closely watch RBNZ Governor Adrian Orr’s press conference for insights into the central bank’s future policy stance. Any dovish signals could add to selling pressure on the New Zealand Dollar (NZD), providing support for the AUD/NZD cross.

However, the upside of the AUD/NZD cross could be restrained as the Australian Dollar (AUD) remains subdued following the Reserve Bank of Australia’s (RBA) policy decision on Tuesday. The central bank lowered its Official Cash Rate (OCR) by 25 basis points (bps) to 4.10% on Tuesday, as widely expected, marking the first rate cut in four years.

Reserve Bank of Australia Governor Michele Bullock addressed the media after the policy meeting, stating that it’s clear high interest rates have had an impact. However, Bullock emphasized that it's too early to declare victory over inflation. She also noted the unexpectedly strong jobs market and clarified that the market's expectation of further rate cuts is not guaranteed.

Australia's Wage Price Index rose by 0.7% quarter-over-quarter in Q4 2024, below the expected 0.8% increase and the previous quarter's 0.9% rise. On an annual basis, the index grew by 3.2%, slowing from a revised 3.6% in the prior quarter and matching forecasts. This marked the slowest wage growth since Q3 2022.

Economic Indicator

RBNZ Interest Rate Decision

The Reserve Bank of New Zealand (RBNZ) announces its interest rate decision after its seven scheduled annual policy meetings. If the RBNZ is hawkish and sees inflationary pressures rising, it raises the Official Cash Rate (OCR) to bring inflation down. This is positive for the New Zealand Dollar (NZD) since higher interest rates attract more capital inflows. Likewise, if it reaches the view that inflation is too low it lowers the OCR, which tends to weaken NZD.

Source: FXSTREET