ASIA FX: KRW Bears To Brunt Off Risk Off, TWD Outperforms
Jun-13 03:36
In North East Asia FX, the USD is firmer, particularly against KRW, as markets are gripped by risk off following Israel strikes on Iran (including its nuclear facilities). TWD is outperforming, making fresh multi year highs in the first part of trade.
- USD/KRW spot has surged nearly 1% higher, virtually unwinding all of Thursday's won gains. The pair was last near 1370. Earlier highs this week were close to 1375, while recent lows rest around the 1351 level. We have seen South Korean equities retrace lower, with the Kospi off a little over 1%, while the Kosdaq has fallen over 3%. The won is sensitive to broader risk shifts, while the spike in oil is a terms of trade headwind if it is sustained.
- USD/TWD traded to lows of 29.50 in the first part of Friday dealing, continuing Thursday's better TWD trend. These were levels last seen in 2022. USD/TWD has recovered some ground since, last back to 29.60/65, only 0.10% stronger in TWD terms. It was reported earlier that Taiwan will measures to encourage insurers to invest more domestically (see this BBG link).
- USD/CNH has pushed higher, albeit only up 0.15% versus end Thursday levels in the US. We were last close to 7.1850, with CNH seeing some negative spillover from USD gains elsewhere. Earlier USD/CNH opened closer to 7.1700.
- Spot USD/HKD is little changed, last close to 7.8490.
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CHINA: Bond Futures Lower in Morning Trade
May-14 03:04
- China's bond futures are all lower in morning trading.
- The 10YR future is lower by -0.10 at 108.56 and has breached the 50-day EMA of 108.59. The next key level below is the 100-day EMA of 108.32.
- The 2YR future is lower by -0.05 at 102.46 and remains firmly below all major moving averages. The nearest being the 20-day EMA at 102.46.
- CGB bond yields are stable with the CGB 10YR at 1.66%
MNI EXCLUSIVE: Insight On German FDI Into CHina
May-14 02:52
A leading German industry leader in China provides insight into German FDI. On MNI Policy MainWire now, for more details please contact sales@marketnews.com.
AUSTRALIA DATA: Wage Gains Pick Up, Led By Public Sector
May-14 02:19
The Q1 wages print was slightly above market expectations, printing at 0.9%q/q (0.8% was forecast and the prior was 0.7%). In y/y terms we rose 3.4%, also above forecasts (3.2%, which was also the prior outcome).
- This is the first y/y momentum gain since Q2 last year. We are below recent highs for the metric (4.3%y/y, recorded in Q4 2023), but still comfortably above long averages (the 3yr moving average for y/y wages growth is back at 2.5%), see the chart below.
- At face value this suggests little need for aggressive RBA easing action and still suggests tightness in the labor market.
- The detail was a touch on the dovish side, in the sense that stronger wage gains were more focused in traditional public service areas. The ABS noted: "Seasonally adjusted private sector annual wage growth was unchanged from the December quarter at 3.3 per cent. Annual public sector wage growth was higher than the private sector at 3.6 per cent in the March quarter 2025, up from 2.9 per cent in the December quarter 2024."
- The strongest q/q gains were for health care, +1.4%, education +1.3% and public administration, +1.0%. Utilities, along with wholesale trade, at 0.9%, were the next strongest. Weakness was evident in retail trade, accommodation (+0.1%) and manufacturing (+0.3%), although these figures are not seasonally adjusted.
Fig 1: Australian Wages Growth Ticks Up In Q1, Led By Public Sector Gains
Source: MNI - Market News/Bloomberg
