BOJ: Fixed Rate Purchase Offer
The BoJ offers to buy an unlimited amount of 5- to 10-Year JGBs at a fixed rate of 0.50%.
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KRW: 1 Month USD/KRW Rebounds, As Spot Can't Sustain 1270 Downside Break
1 month USD/KRW sits back above 1270, around +0.40% above NY closing levels from Tuesday (~1265). Spot USD/KRW gapped below 1270 at the open, but now sits back close to 1273. Onshore equities are down slightly, despite the positive offshore lead, which is likely weighing at the margins for the won.
- 1 month USD/KRW downside accelerated yesterday on the break of 1280, so this level may offer upside resistance if we see further USD gains.
- On the data front, the May unemployment rate dipped to 2.5%, versus 2.7% forecast and 2.6% prior. This is a record low in seasonally adjusted terms, with job gains in the services sector outweighing losses in manufacturing and construction.
- At the margins this is likely to feed into a still hawkish BoK backdrop (i.e. leaving the door ajar for a further rate hike).
AUSTRALIA: Farm Confidence Improves Slightly In Q1
Rabobank rural confidence rose to -22 in Q1 from -25 driven by improved optimism in Queensland. Around half of the farmers surveyed didn’t expect a change in conditions over the year ahead and 13% expected them to improve (up from 11%), as concerns over commodity prices and rising costs eased. But there was an increase in those who feared rising government intervention in the sector. Rabobank noted that farmers are adjusting to a “normalisation of economic conditions”.
- The Australian
US TSYS: Firm Off Session Lows
Tsys have firmed off early session lows and not sit a touch richer. There was no obvious headline driver for the move, perhaps local participants are using yesterdays cheapening as an oppurtunioty to close out short positions/enter fresh longs. This leaves cash tsys ~1bp richer across the major benchmarks. TYU3 deals at 112-28+, +0-07, a touch off the top of the 0-05+ range.
