CNH: CNY Fixing - Close To Neutral
The USD/CNY fix printed at 7.0939, versus a Bloomberg consensus of 7.0948.
- Today's outcome, a -9pip surprise in USD/CNY terms, comes after yesterday's -10pip outcome, but we remain close to neutral. Note that the past week has seen a cumulative error of -20pips, which is negligible from an historical standpoint.
- USD/CNH has drifted a little higher in the first part of trade today, last above 7.1100, we opened just under 7.1050. The yen has been a touch weaker, while US back end yields have firmed a touch.
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KRW: BoK Governor Says Won Pressure May Ease Post Dividend Pay-Out Period
1 month USD/KRW is trading with a slight downside bias so far today. We are back to 1338.5, around -0.15% down on NY closing levels. Spot is still above the 1340 level at this stage.
- For the 1 month NDF, over the past week dips to around the 1335 region have been supported, while moves above 1340 have drawn selling interest. The recent high came in just under 1344. On the downside the 20-day EMA is just under 1327.
- An earlier CNBC interview with BoK Governor Rhee touched on a number of topics. The Governor stated it was too early to discuss a pivot from a rates standpoint (1yr implied BoK policy rates sit around 13bps under the current policy rate, but are slightly higher for the next 3-6 months).
- Rhee stated further Fed hikes can't be ruled out, while noting 2023 growth may be slightly below the Feb 1.6% forecast.
- Rhee stated the bank isn't too concerned about day-to-day changes in the won, while also noting pressure may ease post the dividend outflow period.
- In the equity space, the Kospi is tracking lower, down 0.70% at this stage, with offshore investors selling -$69.5mn so far.
NEW ZEALAND: Home Prices Fall Further But Still Above Pre-Covid Levels
CoreLogic house prices for April fell 0.6% m/m to be down 10.3% y/y and 11% off the April 2022 peak. They fell 1.1% m/m and -10.5% y/y in March. April was the thirteenth consecutive fall in contrast to Australia which saw prices rise in March and April. Home prices in NZ though remain 27.5% above pre-pandemic levels compared with 11.5% in Australia.
- CoreLogic noted that “The generalised peak for mortgage rates could start to increase buyers’ confidence in the coming months, while employment remains high, alongside a slight decline in available listings, and rising net migration.”
- Loan-to-value rules are due also to be relaxed while debt-to-income limits are to be introduced next year, both of which could boost house sales and thus support prices over the rest of 2023. On the other hand, the RBNZ is forecasting a shallow recession.
- “I could readily imagine relatively flat house prices into 2024, possibly longer,” said CoreLogic NZ Chief Property Economist Davidson.
- See report here.
Source: MNI - Market News/Refinitiv/CoreLogic
AUSSIE BONDS: ACGB Apr-33 Auction Result
The AOFM sells A$800mn of the 4.5% 21 April 2033 Bond, issue #TB140:
- Average Yield: 3.3617 (prev. 3.727%)
- High Yield (%): 3.365 (prev. 3.73%)
- Bid/Cover: 4.1063x (prev. 2.4562x)
- Amount Allotted at Highest Accepted Yield as Percentage of Amount Bid at that Yield: 52.5%
- Bidders 45 (prev. 36), successful 26 (prev. 23), allocated in full 16 (prev. 15)
