US: Def Sec Austin Delivering Remarks On Indo-Pacific Strategy
20:30 ET 01:30 BST: US Defence Secretary Lloyd Austin is continuing his ten-day tour of Asia with a speech at the IISS Shangri-La Dialogue in Singapore outlining "Next Steps for the United States' Indo-Pacific Strategy."
- The Secretary's speech will be livestreamed on the Pentagon website: https://www.defense.gov/News/Live-Events/
- Today, Austin met with Chinese counterpart Wei Fenghe to discuss "the need to responsibly manage competition and maintain open lines of communication."
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US TSYS: A Touch Firmer
A modest bid comes into the space around the cash market re-open, with Asia COVID headlines doing the rounds, namely, China has declared the discovery of 2 Shanghai COVID cases outside of quarantine (after 0 cases were noted yesterday), while the apparent discovery of 1 COVID case in North Korea has triggered the lockdown of all of the cities in the country (make of that what you will). You would also point to some of the bid in cash Tsys being related to regional reaction to the stagflation worry that became evident in NY trade (after the cheapening impact from firmer than expected CPI readings abated). Cash Tsys sit 0.5-2.0bp richer early on, with 5s leading, while TYM2 is printing fresh session highs, +0-01+ at 119-10.
KRW: USD/KRW making fresh highs in early trade
Headwinds still persist for the Korean currency.
- USD/KRW 1 month NDF is opening around 1283 this morning, spot is slightly below this level. Yesterday spot closed around 1275, while the1 month NDF finished the NY session around 1280.
- Yesterday we saw continued foreign equity selling, $235mn, bringing week to date sales to just over $600mn. Today could be another challenging one for sentiment, following weaker leads from US shares and US listed China tech stocks overnight.
- Local wires report the new government plans to scrap stock capital gains tax for most share holders. However, the proposal still has to pass parliament.
- Risk reversals remain elevated, the 1 month at 1.51 and 3 month at 1.81, but both are below March highs and as we noted yesterday are well below 2020 peaks.
- The South Korean finance ministry again reiterated yesterday that it stands ready to stabilize markets, but resolve around FX levels could be tested further.
- There isn't much in the way of local data to note on Thursday, with just money supply figures on tap.
MNI: US SENATE CONFIRMS PHILIP JEFFERSON TO FEDERAL RESERVE BOARD
- MNI: US SENATE CONFIRMS PHILIP JEFFERSON TO FEDERAL RESERVE BOARD
