ASIA FX: Asia EM Currencies Trade On Firmer Footing
Asia EM FX space found poise as Chinese tech equity space got some reprieve while the greenback softened ahead of today's Fed policy announcement.
- CNH: Spot USD/CNH wobbled after the PBOC set the yuan reference rate fairly close to the sell-side estimate, dropping its weakening bias showed on Monday & Tuesday. The rate dipped later in the session as the DXY lost ground.
- KRW: The won held a familiar range while operating slightly below neutral levels. South Korea's unemployment rate unexpectedly slumped to 2.7% in February, while North Korea conducted an apparent failed test-launch of a missile.
- IDR: Spot USD/IDR trimmed its initial losses ahead of Thursday's monetary policy decision from Bank Indonesia. FinMin Indrawati pledged to keep lowering the budget deficit this year.
- MYR: Spot USD/MYR operated below neutral levels. Domestic headline flow centred around the upcoming meeting of UMNO general assembly, which may provide an opportunity for ruling party members to discuss snap election optionality.
- PHP: Spot USD/PHP drifted lower in line with regional trend. BSP Gov Diokno noted that the Philippines enjoys ample FX reserves and steady FX inflow.
- THB: The baht firmed at the margin. Speculation re: potential for a snap general election did the rounds after PM Prayuth refused to rule it out.
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AUSSIE BONDS: Tracking Wider Moves
There hasn’t been much to report for the ACGB space, with futures largely tracking gyrations witnessed in the wider core FI complex (albeit with a slightly different beta), allowing YM & XM to move away from their respective Friday peaks, before consolidating over the last few hours. YM +7.0 & XM +8.5 as a result. The 7- to 12-Year zone of the cash ACGB curve has outperformed.
CNH: Rangebound
Spot USD/CNH has shed a mere handful of pips, as lacklustre domestic headline flow and in-line PBOC fix failed to move the needle for the redback. The rate last sits -29 pips at CNH6.3626, with bears looking for a dip through Feb 4 low of CNH6.3489 before taking aim at Jan 26 low of CNH6.3238. On the flip side, a break above Jan 31 high of CNH6.3864 would shift topside focus to Jan 6/Nov 26 highs of CNH6.3976/99.
- The main point of note on China's data docket this week is provided by inflation figures, due for release on Wednesday.
BOJ: 0 Bids Received In Fixed Rate Bond Buying Op
The Bank of Japan notes that it received 0 bids in today's JGB fixed rate operations. We suggested that this may be the case given recent yield dynamics.
