New Zealand hikes interest rate by 50 basis points in a surprise move; Asia markets mixed

It will be a "slow grind" to bring inflation down for New Zealand, according to ASB Bank chief economist Nick Tuffley.

Speaking to CNBC "Squawk Box Asia," Tuffley estimates that inflation in the country will remain above 7% for most of 2023. New Zealand's consumer price index in its final quarter of 2022 stood at 7.2%.

He said inflation will remain "surprisingly sticky" for New Zealand, with weather impacts pushing up prices of fresh produce and home durables.

Inflation in New Zealand is unlikely to fall below 3% till late 2024 at the earliest, he said.

— Lim Hui Jie

Samsung Electronics net profit is expected to drop by over 80% for the first quarter of 2023.

Net profit is forecasted to come in at 1.85 trillion won ($1.4 billion), 83.4% lower than the same period a year ago, according to Refinitiv data.

Most notably, its semiconductor segment is estimated to record a loss of 2.15 trillion won, down from the 8.45 trillion won profit in the first quarter of 2022.

Profit for Samsung visual display and digital appliances businesses are also expected to come in at 317.05 billion won, down from 800 billion won.

Revenue for the quarter is expected to come in at 64.26 trillion won, 17.39% lower than the 77.78 trillion won recorded in the same period last year.

— Lim Hui Jie

Thailand's headline inflation for March came in at 2.83%, lower than expectations of 3.3% and below February's 3.8%, government data showed.

Core inflation was also below expectations at 1.75%, and lower than the previous month's 1.93%.

The Thai baht strengthened slightly to 33.86 against the U.S. dollar on Wednesday's afternoon. Thailand's SET index also fell 0.67%.

Headline inflation for the Philippines in March also fell slightly to 7.6%, lower than the previous month's reading of 8.6%.

Core inflation rose to 8% year-on-year, Refinitiv data showed. The Philippine peso weakened to 54.360 against the greenback.

– Jihye Lee

Singapore's retail sales in February climbed 12.7% year-on-year, reversing a 0.8% decline recorded in January.

Excluding motor vehicles, retail sales rose 11.7%, following the 2.1% increase in January.

In a release, the country's statistics department said the year-on-year increase in retail sales was partly attributed to a lower base, as some shops were not open during the Chinese New Year public holidays on 1-2 February 2022.

Comparing the performance for the two-month period between January to February of festivities, retail sales registered a year-on-year growth of 4.9%.

— Lim Hui Jie

Asia is approaching the end of its rate hiking cycle as inflation continues to slowdown, said Chetan Seth, Nomura's Asia-Pacific equity strategist.

"If you look at the inflation numbers from Philippines, the numbers were slower than expectations," he told CNBC "Street Signs Asia." This is a reflection of a broader trend in Asia that "we are probably approaching the end of the hiking cycle," he added. 

On Wednesday, the Philippines reported that inflation in March slowed down to 7.6% from 8.6% in February, lower than analysts' forecasts for the month. Thailand's headline inflation also rose less than expected at 2.83% in March from a year ago.

"We have to also remember that there concerns building that we may be headed towards a slowdown in the U.S," said Seth.

"In that kind of environment, I would expect the central banks to go a bit slower, maybe even think about pausing interest rates."

 — Sumathi Bala

Reserve Bank of Australia governor Phillip Lowe said on Wednesday just because interest rates hikes were paused in April, that doesn't signal an end to rate increases.

In a speech, Lowe explained that "the decision to hold interest rates steady this month was taken to give the board more time to assess the economic outlook and the impact of the increases in interest rates so far."

He highlighted a further tightening of monetary policy may be needed to bring down inflation levels within a reasonable timeframe.

He repeated the RBA's goal of returning inflation to 2-3%, and added inflation will return to the top of the target range only by mid-2025.

— Lim Hui Jie

Federal Reserve Bank of Cleveland President Loretta Mester said in a speech in New York that the central bank will need to raise rates further to tame inflation.

"Precisely how much higher the federal funds rate will need to go from here and for how long policy will need to remain restrictive will depend on how much inflation and inflation expectations are moving down," said Mester, adding that it will "depend on how much demand is slowing, supply challenges are being resolved, and price pressures are easing."

The central bank in its March meeting raised the benchmark interest rate by 25 basis points, raising the federal funds rate to a target range between 4.75%-5%.

Mester is not a voting member on the Federal Reserve's 2023 committee but an alternate member.

"In my modal projection, to put inflation on a sustained downward trajectory to 2 percent and to keep inflation expectations anchored, monetary policy moves somewhat further into restrictive territory this year, with the fed funds rate moving above 5 percent and the real fed funds rate staying in positive territory for some time," she said.

Her comments came despite job openings tumbling below 10 million in February for the first time in nearly two years, a sign the Fed's effort to slow the labor market may be having some impact.

– Jihye Lee

New Zealand's central bank said its latest rate hike decision was supported by the fact that inflation is still "too high and persistent."

In its statement, the bank's monetary policy committee added that the employment in New Zealand is also "beyond its maximum sustainable level," emphasizing its aim to bring inflation down to its target of 1-3%.

New Zealand's consumer price index in its final quarter of 2022 was 7.2%, hovering around historic highs seen in October.

— Lim Hui Jie

New Zealand's central bank has raised rates by 50 basis points, bringing the benchmark interest rate to 5.25% and higher than economists' expectations of a 25 basis points hike.

The latest move brings the interest rate to the highest level since October 2008.

This follows the previous hike of 50 basis points, which saw the interest rate move from 4.25% to 4.75% in February.

The New Zealand dollar strengthened 0.59% to trade at 0.6351 against the U.S. dollar.

— Lim Hui Jie

Japan's services sector continued to expand in March, according to a private survey from the au Jibun Bank.

The country's services purchasing managers index rose to 55, up from 54 in February and marking the seventh straight month of expansion.

The sector expanded the most since 2013 and marked the second-strongest in the history of the survey.

The economy also saw a rise in new business volumes during the month, marking the steepest rate since February 2019.

Japan's "rates of expansion in business activity, new business and export orders all accelerated on the month to reach among the highest in their respective series histories," the release said, while noting that input inflation eased to a 12-month low.

Firms were also "increasingly optimistic" about the outlook for activity over the coming year, amid hopes for stable market conditions, au Jibun bank added.

— Lim Hui Jie

The Reserve Bank of New Zealand is expected to raise its cash rate by 25 basis points to 5%, according to a Reuters poll of economists. That would take its benchmark interest rate to its highest level since December 2008.

The New Zealand dollar was fractionally higher at 0.6311 against the greenback ahead of the decision.

Stocks in New Zealand traded higher with the S&P/NZX 50 up 0.26% in Asia's morning session.

— Jihye Lee

Job openings plunged in February in a sign that the ultra-tight labor market may be loosening up.

Available positions fell to 9.93 million for the month, down more than 600,000 from January and well below the FactSet estimate of 10.4 million, according to a Labor Department report Tuesday.

The decline marked the first time openings were below 10 million since May 2021.

Separations and hires also both moved lower though quits rose to just over 4 million.

—Jeff Cox

Crude oil climbed on Tuesday, with the output cut from OPEC+ continuing to push prices above $80 per barrel.

West Texas Intermediate crude was 1% higher at $81.27 per barrel, while international benchmark Brent ticked up 0.9% to $85.75. The Energy Select Sector SPDR Fund (XLE) also headed higher on Tuesday.

The surprise output cut sent oil prices surging as much as 6% a day earlier, and added to worry that the move could stoke more inflation and add to recession fears.

The output cut amounts to 1.16 million barrels per day, and now puts the total amount of cuts from OPEC+ at 3.66 million barrels per day.

— Brian Evans

U.S. Treasury Secretary Janet Yellen said the banking crisis is "stabilizing" and regulators are prepared to act again to protect deposits if necessary, according to Bloomberg News.

"My read is the outflows from smaller and medium-sized banks are diminishing and matters are stabilizing, but it's a situation we're watching very closely," Yellen told reporters on Tuesday.

Yellen also pushed back against criticism toward the Financial Stability Oversight Council, which some GOP members have blamed for not identifying the banking crisis earlier. She said the crisis itself only afflicted "a couple of banks" which were extraordinarily exposed to the threat of runs.

"I don't think there's a fundamental problem with the banking system," Yelled added.

— Brian Evans

Investors seeking safety and attractive yields are rushing into money market funds at record levels.

A new report from Bank of America shows that $18 billion per day on average was moved into these funds since Mar. 10.

CNBC Pro subscribers can read more about these 36 widely traded funds available as ETFs worldwide.

— Ganesh Rao

Gold futures were higher on Tuesday, gaining nearly 2% after hitting its highest level since March of 2022.

Bullion reached a session high of $2,043 per ounce is on track for its fifth positive session out of the last six. Gold flew past $2,000 per ounce after bond yields fell on news of weaker than expected available jobs data from the Labor Department.

So far this year, gold prices have gained 11.6%. The precious metal is often touted as a hedge against inflation.

— Brian Evans, Nick Wells

Credit Suisse Chairman Axel Lehmann apologized to shareholders on Tuesday for the bank's collapse and controversial takeover by UBS.

"I apologize that we were no longer able to stem the loss of trust that had accumulated over the years, and for disappointing you," Lehmann said during Credit Suisse's annual general meeting. This marked the first time the bank's leaders addressed the public since the buyout deal.

Swiss authorities helped broker an emergency rescue of the troubled bank by its larger domestic rival for just 3 billion Swiss francs, over the course of a weekend in late March.

The deal, which was facilitated by Swiss regulators to stem a wider global banking crisis, remains entangled in legal and logistical challenges. Neither UBS nor Credit Suisse shareholders were allowed a vote on the deal.

— Hakyung Kim