Asian markets mixed after the Fed raised interest rates and hinted it may end

Some Japanese lenders are reluctant to take part in Japan’s 550 billion yen ($4.1 billion) syndicated loan to finance the construction of a casino in Osaka after receiving government approval, the Nikkei reported.

The report said some of the 20 or so expected to join the effort have “grown more alarming” after seeing global casinos shut down following the pandemic, as well as growing local concerns about gambling addiction and public safety.

MUFG Bank and Sumitomo Mitsui Banking Corp. are acting as lead arrangers for the syndicated loan, Nikkei reported. The two banks are expected to contribute between ¥200 billion and ¥300 billion in funding, the report added.

̵[ads1]1; Jihye Lee

Hong Kong’s monetary authority raised the base rate to 5.5%, following the US Federal Reserve’s move to raise the Federal Funds rate to 5-5.25% on Thursday.

The City’s base rate follows a preset formula, either 50 basis points above the lower end of the US federal funds rate or the average of the five-day moving averages of overnight and one-month Hong Kong Interbank Offered rates, whichever is higher.

The Hong Kong dollar has been pegged to the greenback since 1983, trading in a tight band of $7.75 to $7.85 Hong Kong dollars per US dollar.

As the average of the five-day moving averages of overnight and one-month HIBORs is 3.28%, the base rate is therefore set at 5.5%, the HKMA said.

— Lim Hui Jie

Australia’s trade surplus came in at AU$15.27 billion ($10.2 billion) in March, higher than the AU$14.15 billion recorded in February, government data showed on Thursday.

The reading was higher than expectations for a decline to AU$12.65 billion in March, according to a Reuters poll.

The country’s statistics agency revealed that exports rose 3.8% month-on-month to $59.3 billion, driven by metal ores and minerals.

Imports rose 2.5% month-on-month to AU$44.02 billion, mainly due to non-industrial transport equipment.

— Lim Hui Jie

China’s manufacturing activity slipped into contraction territory for the first time in three months as the Caixin manufacturing purchasing managers’ index came in at 49.5 in April, below estimates.

The measurement also marks a drop from March’s 50.0 level and reflects a reduction in new orders.

“This suggests that China’s economic recovery slowed significantly after the peak of Covid-19 infections at the beginning of this year, given that the index stood at 51.6 and 50 in February and March, respectively,” Caixin Insight Group senior economist Wang Zhe said in the message. .

Nevertheless, companies were confident that demand will pick up later in the year.

“Producers remained highly optimistic, with the reading for their expectations for future production in April significantly higher than the long-term average, as they expressed strong confidence in the recovery of market demand and the implementation of relevant support policies,” Wang said.

– Jihye Lee

Domestic tourism in China during Golden Week showed traffic up 70.8% year-on-year, returning to pre-pandemic levels, Reuters reported.

Goldman Sachs economists said in a Thursday note, “The strong Labor Day holiday tourism data bodes well for spending and service recovery in the coming months, adding conviction to our above-consensus 2023 GDP growth forecast.” The firm estimates that China’s economy will see full-year growth of 6% in 2023.

Citi’s chief China economist Xiangrong Yu said the rise in prices would be worth watching closely.

“With supply capacity for certain sectors starting to tighten, we tend to think that further demand growth could lead to more hiring and inflationary pressures,” he said, noting that China’s recovery so far has not been inflationary.

HSBC added that there is more to improve for Chinese travelers.

“We would argue that if you thought the Chinese travel boom had played out, we think it’s just the beginning,” they wrote in a Wednesday note.

– Jihye Lee

Asia-Pacific currencies strengthened against the dollar as the US Federal Reserve signaled a potential end to its rate hike cycle.

The offshore Chinese yuan strengthened 0.3% to 6.900 against the dollar on Thursday morning as the dollar index fell 0.24% to 101.102.

The Korean won strengthened 0.6% to 1,326.84 against the dollar and the Japanese yen strengthened 0.13% to 134.49 against the US dollar. The Australian dollar was flat and the New Zealand dollar also rose 0.24% to 0.6240 against the greenback.

– Jihye Lee

Shares in major Australian banks fell on Thursday after National Australia Bank missed earnings expectations for the half year ended in March.

Revenue came in at AU$10.53 billion ($7 billion), up 19.3% year-on-year, while net profit came in at AU$3.97 billion, a gain of 11.7% from the same period a year ago , NAB said.

NAB’s revenue missed estimates by 2% and earnings per share missed estimates by 5.61%, according to Refinitiv data. The net profit, meanwhile, was 2.31% higher than expected.

Shares in NAB fell 7.57% on Thursday, while counterparts Commonwealth Bank of Australia and Westpac Banking also fell 2.84% and 4.24% respectively. Macquarie Group was down 2.22 percent.

China’s Caixin index of manufacturing purchasing managers is expected to remain in expansionary territory in April, according to a Reuters poll of economists.

The reading is forecast to rise to 50.3 for the month of April after posting 50.0 in March, the poll showed.

This comes after manufacturing PMI data released by China’s National Bureau of Statistics disappointed at the weekend, falling below the 50 mark that separates growth and contraction at 49.2.

– Jihye Lee

The Fed raised interest rates for the 10th time in this tightening cycle, as was widely expected. The central bank also signaled a pause for the campaign to come.

“In determining the extent to which further policy tightening may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, lags with which monetary policy affects economic activity and inflation, and economic and financial developments, ” the Fed said in a statement.

The Fed also removed a sentence from the previous announcement, which said, “The Committee anticipates that some additional policy tightening may be appropriate” for the Fed to reach its 2% inflation target.

For more, check out CNBC’s Fed live blog.

— Fred Imbert, Jeff Cox

Morgan Stanley Investment Management’s Andrew Slimmon says it’s time to buy some “offensive” stocks.

“So I think it’s very dangerous to own only very defensive stocks … I think you want to have some offense in your portfolio,” Slimmon told CNBC’s “Squawk Box Asia” on Tuesday.

He explains why and names stocks to buy.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Germany’s Volkswagen and BMW will publish their first quarter results later on Thursday.

Using data from FactSet going back five years, CNBC Pro assessed how well the automaker’s stock is performing against benchmarks based on various outcomes of its quarterly earnings reports.

CNBC Pro subscribers can read more here.

– Ganesh Rao

The dollar index, which tracks the greenback’s performance against six other global currencies, fell more than 0.7% to a low of 101.07 on Wednesday. It was the lowest level since April 16.

The move comes as Fed Chair Jerome Powell answers questions following the central bank’s latest policy decision.

—Fred Imbert, Gina Francolla

WTI Crude (JUN) prices were down 3.07%, hitting a low of $69.46 as of 7:28 a.m. ET on Wednesday. This marked WTI Crude’s lowest price level since March 27, when it traded as low as $69.13.

WTI Crude is down nearly 9.5% for the week to date, on pace for its worst week since March 17, when it lost nearly 13%.

The Energy Select Sector SPDR Fund (XLE) is down 6.6% for the week to date, making it its worst week since March 17, when it lost 6.85%. Energy groups Halliburton and Exxon Mobil have lost 10.4% and 8.4% respectively this week.

— Hakyung Kim, Gina Francolla