ForexLive Asia-Pacific FX news wrap: China 2023 GDP targeted around 5%

• ECB Chief Economist Philip Lane is speaking Monday, on inflation
• UBS raises its China growth forecast for 2023 from 4.9% to 5.4%
• Vice Chair of China’s state planner says China’s economy is steadily improving
• ICYMI – Saudi Aramco increased most official oil selling prices for Asia in April
• The RBA expected to raise its cash rate again on Tuesday, Gov Lowe speaks the next day.
• PBOC sets USD/ CNY reference rate for today at 6.8951 (vs. estimate at 6.8932)
• MUFG targets USD/JPY to 133 in Q2 and as low as 127 in Q4
• Australian MI monthly inflation for February +0.4% m/m (prior +0.9%)
• New Zealand – ANZ Commodity Price index for February +1.3% m/m (prior -1.0%)
• South Korea’s Pension Service to work with FX authorities to intervene in KRW when needed
• Misleading app uses ForexLive brand to target traders – be on guard for your funds
• South Korean February CPI y/y comes in at slowest rise since April 2022
• Keep it Simple…
• AUD traders heads up: RBA ‘shadow board’ recommends a 25bp cash rate hike on Tuesday 7 Feb
• ECB Lagarde on higher rates: “In the short term, core inflation is going to be high,”
• Binance messages and documents seen by the WSJ show plan to neutralize U.S. authorities
• Trade ideas thread – Monday, 6 March 2023
• Mobius says China’s government is preventing him from taking capital out of China
• Weekend – China sets its 2023 GDP target “around 5%”
• Week Ahead: Fed’s Powell, US NFP; China Two Sessions, CPI; RBA, BoC, BoJ
• Fed’s Daly: If next inflation data hot, would adjust rate path higher and longer
• Japan’s unions are demanding the biggest wage hike in 25 years – BOJ and yen implications
• China’s National People’s Congress begins on Sunday
• Combining volume profile in technical analysis: Bitcoin’s target is $21250 (apx 5% lower)
• Forexlive Americas FX news wrap 3 Mar

Premier
Li Keqiang’s government work report was released on Sunday at the
opening of the National People’s Congress, part of the annual “Two
Sessions” parliamentary meeting. The
2023
economic growth target was
unveiled in the report, on the
low side at “around 5%”. Analysts’ expectations for GDP
centred around 5.5%, so this 5% is a disappointment.

The
modest GDP growth target has implications for policy stimulus, a
lower target will require less of it. It also means less demand for
commodities at the margin than would otherwise have been the case.

While
the news didn’t rock markets it did send a few shudders through.
Stock markets in China dripped a little lower. AUD/USD,
as a China proxy trade, traded a gap lower early Monday but has since
recovered.

EUR/USD
also dipped a small gap down and recovered. Slightly lower demand
from China should assist to further ease any lingering Euro area LNG
supply worries (not that these are weighing too much now regardless).
Also of benefit to the EUR were weekend remarks from European
Central Bank President Lagarde, reiterating the need to hike
rates ahead to combat still strong inflation.

We
also had hawkish remarks over the weekend from Mary Daly, head of the
San Francisco Federal Reserve branch.

From
Japan over the weekend was news of Japan’s unions demanding the
biggest wage hike in 25 years at “shunto” spring wage
talks. The Bank of Japan is encouraging higher wages to support
inflation. Higher wages, the Bank argues, would support demand-pull
inflation. This form of inflation, BOJ officials say, would help
ensure more sustainable and stable inflation around the Bank’s 2%
target. If the BOJ can achieve stable 2% inflation there is a case
for a reduction in its ultra-loose, ultra-stimulatory policy. At the
margin this would be yen supportive and this weekend news seems to
have added to yen gains during the session here.

Also
over the weekend Saudi Aramco increased most official oil selling
prices to Asia for April.

Asian
equity markets:

• Japan’s
  Nikkei 225 +1.2%

• China’s
  Shanghai Composite -0.24%

• Hong
  Kong’s Hang Seng +0.13%

• South
  Korea’s KOSPI +1%

• Australia’s
  S&P/ASX 200 +0.9%