India holds rate in surprise move, Asia markets fall as Wall Street assesses slowing growth

The Central Bank of India has kept its repo rate at 6.5% for the first time since April 2022 when the Reserve Bank of India started its monetary tightening cycle.

The repurchase rate, or repo rate, is Reserve Bank of India makes loans against government securities to commercial banks or financial institutions in India.

Only a minority of economists predicted this, and only 13 of the 60 economists surveyed by Reuters predicted a moratorium on interest rates. All the rest expected a 25 basis point increase.

After the announcement, the Indian rupee fell 0.15% against the US dollar at 82.04.

The gold price remained above $2,000 for the third consecutive day as investors believe the risk of a recession has increased, especially as US job growth slows.

The yellow metal traded at $2,011.54 an ounce on Thursday after surpassing $2,000 on Tuesday, reaching its highest level since October 2020.

Australian February trade balance It expanded to A$13.84 billion ($9.25 billion) from a record A$11.69 billion in January.

It also beat economists’ expectations that the trade balance would fall to A$11.1 billion.

Australia’s imports of goods and services fell 9% year-on-year in February, while exports fell 3%.

— Lim Hijie

China’s service sector activity continued to expand in March, according to the latest Caixin Service Purchasing Managers’ Index, which rose to 57.8.

The measurements are at the 4th month of acceleration and are above the 50 points separating growth and contraction.

It also reached its highest level since November 2020. The increase in activity was supported by a sustained and sharp rise in new transactions, Caixin said in a release.

– Lee Ji Hye

Oil prices fell after Saudi Arabia raised the price of its flagship oil for Asian buyers for a third straight month, Reuters reported.

This comes after prices surged the most in almost a year after OPEC unexpectedly cut output over the weekend.

Brent crude futures fell 0.68% to $84.33 a barrel and West Texas Intermediate crude fell 0.66% to $80.08 a barrel.

– Lee Ji Hye

Electronics contract maker Foxconn reported higher sales in the first quarter of 2023, but its outlook for the second quarter was less bullish.

Foxconn, also known as Hon Hai Precision Industry, recorded revenue of NT$1.46 trillion ($48 billion) in the first quarter of 2023, up 3.87% year-on-year.

However, the company said two factors will weaken its outlook for the second quarter.

These are seasonal off-peak periods during which old and new products transition, as well as base highs “due to the strong out-of-season pull in the first half of last year.”

Foxconn also made headlines recently when founder Terry Gou announced his intention to run for Taiwan’s presidential election.

India’s central bank is expected to raise its repo rate to 6.75% from 6.5%, the eighth straight increase.

A Reuters poll of 60 economists found 47 expected a rate hike, while the rest expected no hike.

Repo rate or repo rate is the rate at which the Reserve Bank of India lends to commercial banks or financial institutions in India against government securities.

The country kept its repo rate at 4% in May 2020, the lowest in five years, until it started raising rates in April 2022.

— Lim Hijie

Recent bank turmoil in the US and Europe has caused panic, but analysts point to pockets of opportunity.

Investors can enjoy high yields on this type of investment. Some investors are at their best, hovering at almost 8%.

CNBC Pro subscribers can read more here.

— Tan Weizhen

The sharp drop in new orders, exports and prices pushed the US services sector close to contraction in March.

The ISM Service Index dropped to 51.2%. This represents the level of companies reporting expansion. Readings below 50% represent contraction and the index last saw the December level. Economists were looking for 53.8%, according to Dow Jones. February reading he was 55.1%.

New export orders fell 18 points to 43.7, new orders fell 10.4 points to 52.2 and imports fell 9 points to 43.6. The price sub-index shows some easing in inflation as it fell 6.1 points to 59.5.

The ISM manufacturing index is well on its level of contraction with a 46.3% reading Tuesday for March.

— Jeff Cox

The U.S. Commerce Department reported Wednesday that the U.S. trade deficit rose more than expected in February as exports fell sharply.

The trade imbalance rose to $70.5 billion in the month, up $1.9 billion from January, beating Dow Jones estimates.

Exports fell by 2.7% to $251.2 billion as industrial goods, automobiles, consumer goods and capital goods all fell. Imports fell by $5 billion.

With exports added to GDP and imports subtracted, the figure suggests that economic growth in the first quarter may be weaker than expected. The Atlanta Federal Reserve’s GDPNow tracker shows a meager 1.7% rise for the period, up from his 3.5% less than two weeks ago.

— Jeff Cox

A strong first quarter share price has raised hopes for a new bull market. But David Dietze, managing principal of PeaPak Private Wealth Management, said that could be wrong and that inflation remains the biggest headwind.

He added that investors should continue to invest in the stock market.

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— Xavier Ong

US Treasury yields gave up on gains and turned to a one-day deficit after a weak labor market reading from the ADP’s individual payrolls report.

Two-year Treasury yields fell 8 basis points to 3.751%. The 10-year yield fell more than 3 basis points to about 3.3%.

Yields move inversely to prices.

— Jesse Pound

Payroll processing company ADP reported that private sector employment fell sharply in March, well below expectations.

That was down from 261,000 in February and below the Dow Jones estimate of 210,000.

Losses in financial activity, occupational and business services, and manufacturing pushed the total down. Leisure and hospitality, trade, transport and utilities, and construction led recruitment.

The figure is ahead of Friday’s nonfarm payrolls report, which is expected to show an increase of 238,000.

— Jeff Cox