SOUTH KOREA: Country Wrap: Trade Deal with Korea Harder - US
May-09 05:21
- Commerce Secretary Howard Lutnick says trade deals with South Korea will take significantly more time to complete than the framework agreement with the UK. He mentioned India as a possibility for a future agreement, but notes that it will require a lot of work, with around 7,000 lines of tariffs to be changed or modified. He also said that he hopes that initial deals can serve as templates for their respective regions, and President Donald Trump is "very close" to signing more agreements. (source BBG)
- Bank of Korea releases March current account data in statement today. Feb. current-account surplus at $7.18b; last year March surplus was $6.99b. Goods trade surplus at $8.49b in March vs $8.18b surplus for Feb. Services deficit at $2.21b in March vs $3.21b deficit for Feb. (source Maeil)
- The KOSPI followed the lead of the Hang Seng and has barely moved from where it opened and has delivered modest gains of about +0.50% for the week.
- The Won has had a strong day today gaining +.25% to drag it into positive territory for the week.
- Bonds finished the week with a strong sell off with yields up to +4.5bps higher. KTB 10YR 2.67% +4.5bps
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FOREX: USD Pulls Back
Apr-09 05:21
All eyes today on the USD/CNH as it broke above 7.40 in overnight trading. The market is looking for signs to confirm the PBOC is going to let the Yuan move lower. Chinese Premier Li Qiang said his country has ample policy tools to “fully offset” any negative external shocks.
- EUR/USD - Asian range 1.0951 - 1.1066, going into the London open near the Asian highs around 1.1060. Quite a big range for the EUR in Asia as it benefits from the broad USD sell off.
- GBP/USD - 1.2762 - 1.2856, trading at the day's highs going into the London session. Look for sellers once more back towards 1.2900/50.
- USD/CNH - 7.3712 - 7.4273, finding some support back towards 7.3700 after falling away post the Yuan fix which printed 7.2066. The market views a higher USD/CNH as 1 of the cleanest ways to express 104% tariffs being applied. They need further confirmation from the PBOC to give the green light.
- USD/JPY - 144.58 - 146.36. USD/JPY has been under pressure most of the Asian session as Asian stocks tumbled. A bounce of its lows into the London session to be around 145.20, expect it to continue to trade heavy until we start seeing some actual trade deals done.
- Cross asset : SP -2.6%, Gold 3010.00 + 0.88%, US 10yr 4.42%, BBDXY 1264, Cruse oil 56.85
- Data/Events : FOMC minutes, ECB Knot speaks, ECB Cipollone speaks, BOE FPC meeting record released.
USDCNH
Source: MNI - Market News/Bloomberg
LOOK AHEAD: Eurozone Timeline of Key Events (Times BST)
Apr-09 05:18
| Date | Time | Country | Event |
| 09-Apr | 1330 | EU | ECB's Cipollone On Macro-Financial Stability Panel |
| 10-Apr | 900 | IT | Industrial Production |
| 11-Apr | 700 | DE | HICP (f) |
| 11-Apr | 800 | ES | HICP (f) |
| 11-Apr | 1045 | EU | ECB's Lagarde at Eurogroup Press Conference |
| 15-Apr | 745 | FR | HICP (f) |
| 15-Apr | 900 | EU | ECB Bank Lending Survey |
| 15-Apr | 1000 | EU | Industrial Production |
| 15-Apr | 1000 | DE | ZEW Current Expectations Index |
| 16-Apr | 900 | EU | EZ Current Account |
| 16-Apr | 900 | IT | HICP (f) |
| 16-Apr | 1000 | EU | HICP (f) |
| 17-Apr | 700 | DE | PPI |
| 17-Apr | 1315 | EU | ECB Deposit/ Main Refi/ Marginal Lending Rate |
| 17-Apr | 1345 | EU | ECB Monetary Policy press conference |
FOREX: Antipodean Wrap - AUD & NZD Bounce Off Asian Lows
Apr-09 05:17
The RBNZ cut interest rates as expected to 3.5%, citing downside risks for economic growth and inflation, and said it has further scope for reductions if needed. The Australian Treasurer will meet with top economic figures, following a similar meeting Tuesday with the heads of Australia's big banks and super funds. USD/CNH has seen a retracement from its highs around 7.4300 even though the Yuan fixing was higher for a 5th straight day. The market is looking for any confirmation that the PBOC is prepared to let the Yuan weaken.
- AUD/USD - Asian range 0.5915 - 0.6003, AUD has retraced off its Asian highs and goes into the London session trading around 0.5975. Can it hold below 0.6000 ?
- AUD/JPY - Asian range 86.05 - 87.46, AUD/JPY trading back near its lows as USD/JPY comes under pressure due to Asian stocks being heavily sold.
- NZDUSD - Asian range 0.5486 - 0.5561, NZD trading around 0.5539 back at levels it was pre the RBNZ cut. The price still fails to break 0.5500.
- AUD/NZD - Asian range 1.0750 - 1.0828, the cross could not hold onto attempts to get back on a 1.08 handle drifting lower after the RBNZ to go into the London session around 1.0775.
