ASIA FX: Most Asian FX Down on Broad Based USD Strength
May-31 05:07
Asian FX has lost ground today, although KRW and TWD have outperformed the region and broader USD strength.
- CNH: USD/CNH is modestly higher today in line with broad based USD strength. We are down from intra-day highs of above 6.6900, as China PMI prints came out better than expected, while further stimulus was also announced by China's cabinet. Last trading at 6.6770.
- KRW: Spot USD/KRW tracked as high as 1243 in early trade before renewed selling interest emerged. Local equities are higher, so too are China and Hong Kong stocks. This, along with firmer China PMI's has helped the won outperform today. Spot KRW and TWD are the only currencies in the region up against the USD today.
- INR: USD/INR has opened with a firmer tone, pushing back up to 77.65, which is close to recent highs. A stronger USD and Brent crude through $123/bbl are not helping. Q1 GDP is due later today.
- IDR: Spot USD/IDR has crept higher today, back up towards the 14600 level. This is in line with regional trends. CPI data and PMI prints on Thursday are the next major data focus points.
- PHP: Spot USD/PHP is back above 52.40, while the 1 month NDF is through 52.50. Topside focus falls on May 12 high of PHP52.850, while bears look for losses past May 23 low of PHP52.070.
- THB: USD/THB has rebounded from the low 34.00 region, +0.33% on the day to 34.19. BoP and trade figures for April are due out later today. PM Prayuth is preparing for a busy political season. Parliament will begin the first reading of the FY2023 budget bill today, while the opposition is planning to submit a censure motion on June 15.
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Historical bullets
USDCAD TECHS: Corrective Pullback
Apr-29 20:00
- RES 4: 1.2964 High Dec 20 2021
- RES 3: 1.2936 2.0% 10-dma envelope
- RES 2: 1.2901 High Mar 8
- RES 1: 1.2880 High Apr 28
- PRICE: 1.2804 @ 16:59 BST Apr 29
- SUP 1: 1.2648 50-day EMA
- SUP 2: 1.2568 Low Apr 22
- SUP 3: 1.2459 Low Apr 21
- SUP 4: 1.2403 Low Apr 5 and a key support
USDCAD remains bullish and added to the week’s gains Thursday. However, the pullback from 1.2880, Thursday’s high, highlights potential for a short-term correction. A key near-term support lies at 1.2648, the 50-day EMA. A clear break of this support is required to suggest scope for a deeper pullback. For bulls, a resumption of gains would refocus attention on 1.2901, the Mar 8 high. This is also the bull trigger.
US TSY FUTURES: BLOCK, Late 10Y Buy
Apr-29 19:57
- +7,500 TYM2 119-00.5, buy through 119-00 pst-time offer at 1551:35ET
US TSYS: Data-Driven Vol, Yields Higher, Stocks Extend Wk Lows
Apr-29 19:54
FI markets traded weaker after the bell, off early session lows amid data-driven vol in the first half. Quiet second half trade ensued even as equities fell back to late Tuesday levels (SPX -3.6% to 4128.0)
- Rates trade weaker, curves bear flattening with short end underperforming (Block sale: -10,000 TUM2 105-10.88, sell through 105-11 post-time bid at 0841:030ET) after Personal Income: +0.5%/MoM vs. +0.4% est, Spending +1.1%MoM vs. +0.6% est, PCE Deflator in line at +0.9%, Employment Cost Index is +1.4% vs. 1.1% est.
- FI levels rebounded sharply after April Chicago Business Barometer™ fell to 56.4 vs. 62.0 est. Prices Paid ticked up a modest 0.4 points to 86.1 with over three-quarters of firms citing higher prices this month. The Ukraine war was cited as inflating steel, plastics and lumber costs.
- Data driven volatility evaporated by midday with rates hold to a relative narrow range, yield curves flatter but off lows (2s10s -1.116 at 18.994 vs. 13.399L; 5s30 -1.867 at -3.742 vs. -6.508L).
- Focus turns to next Wednesday's FOMC policy annc, 50bp expected, Tsy refunding early Wednesday as well.
- The 2-Yr yield is up 7.7bps at 2.6943%, 5-Yr is up 7.3bps at 2.9124%, 10-Yr is up 5.9bps at 2.8811%, and 30-Yr is up 4.9bps at 2.9413%.
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