ASIA FX: NEA FX Firmer, Led By The Won, USD/HKD Remains Elevated
May-21 04:48
North East Asia FX is firmer versus the USD, albeit mainly concentrated in terms of won gains. CNH and TWD have seen more modest rises against the USD. Recent ranges also continue to hold in terms of all three pairs. USD/HKD has edged higher, but remains sub 7.8300 at this stage.
- USD/CNH saw some support emerge after headlines cross from China's MOFCOM, stating that the US is abusing export controls in the chip sector and that China will protect its interest in the space. It remains to be seen if this dents progress around broader US-China trade negotiations. From highs near 7.2200, USD/CNH turned lower though, amid broad USD losses. We were last near 7.2050. Local equities are up, the CSI 300 +0.70%.
- Spot USD/KRW is under 1390 and looking to consolidate the recent downtrend. Focus will be on earlier May lows just under 1382. We were last near 1386, up around 0.55% in won terms so far today. Local equities are up +1%, adding to the generally positive risk mood (outside of weaker US equity futures). Earlier data showed exports down modestly in y/y terms for the first 20-days of May, showing the tariff impact, with exports to the US falling sharply.
- USD/TWD spot is a touch lower, but holds above 30.10 at this stage. Reports from yesterday, per Reuters, suggested exporters were asked to curb USD sales to reduce TWD appreciation pressures. This may point to near term sensitivity around a fresh break back sub the 30.00 level.
- Spot USD/HKD is tracking just short of recent highs, last near 7.8285. Continued focus on depressed forward points and short term yield differentials in favor of the USD, leaves an upside bias in the pair.
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OIL: Crude Down As US Worries Impact Markets
Apr-21 03:39
After rising close to 5% last week, oil prices are lower today driven by a pullback in risk following pressure from US President Trump on the Fed to cut rates and worries regarding the impact of increased protectionism on energy demand. April trade and confidence data will be monitored closely for signs of any early impact. Crude remains well above initial support levels though. The USD is significantly weaker (BBDXY USD index -0.7%) as markets fear political interference in US monetary policy.
- WTI is down 1.5% to $63.69/bbl during holiday-impacted APAC trading today. It reached a low of $63.38 earlier and is now around 10% softer this month with the bearish theme remaining intact. Last week’s rally helped the oversold condition to unwind. Initial support is at $55.12 with resistance $64.49.
- Brent has sold off 1.6% to $66.87/bbl following a low of $66.61. Last week’s 4.8% rise is considered corrective with the trend direction down. Initial support is at $62.00 with resistance at $67.95.
- Talks appear to be progressing between the US and Iran on its nuclear programme, which if successful could result in increased oil exports. Iranian comments continue to support its right to enrich uranium though and the lack of an agreement may result in tighter sanctions, which if enforced would support oil prices.
- The US has suggested that a lasting ceasefire in the Ukraine would allow an easing of sanctions on Russia, which would also add to global oil supplies, but it seems that the Easter truce has not been respected.
- Later the Fed’s Goolsbee appears and the US March leading index is released. Europe remains closed.
FOREX: Risk Averse Currencies Around A Percent Stronger Vs US Dollar
Apr-21 03:15
Market concerns of political interference in US monetary policy and continued tariff uncertainty have weighed heavily on the US dollar during APAC trading today. The BBDXY USD index is down 0.7% to 1216.10, close to the intraday low, with all G10 currencies stronger against the greenback but especially risk-averse yen, Swiss franc and euro. Risk-sensitive AUD and CAD are underperforming.
- USDJPY is down 1.0% to 140.73, close to the intraday low of 140.62 and below support at 141.00 after breaching 141.62 on Friday, which opens 140.32, 17 September 2024 low.
- EURUSD is just off its high of 1.1529 but is still +1.0% to 1.1512, breaking above resistance at 1.1473 and 1.1495 opening up 1.1555.
- The Swiss franc is 1.0% stronger against the greenback with the pair at 0.8085, its lowest since 2011. EURCHF is little changed at 0.9308.
- GBPUSD is up 0.6% to 1.3377 thus EURGBP 0.4% higher at 0.8606 off the peak of 0.8619.
- AUDUSD has breached resistance at 0.6392 opening 0.6409. The pair is currently up 0.4% to 0.6404, close to the intraday high. However, Aussie is weaker against other major currencies with AUDJPY -0.6% to 90.13 after briefly falling below 90.00 to a low of 89.97. AUDEUR is down 0.6% to 0.5564 after a trough of 0.5555. AUDNZD is -0.4% to 1.0696, still above Friday’s low of 1.0684.
- Equities are mixed with both the S&P & Nasdaq e-minis down 0.9% and TAIEX -1.4% but the CSI 300 is up 0.2% and Straits Times +1.2%. Oil prices are down with WTI -1.8% to $63.53/bbl. Copper is down 0.7% but iron ore is higher at around $99/t.
- Later the Fed’s Goolsbee appears and the US March leading index is released. Japan’s March Tokyo condominium sales print today. Europe remains closed.
ASIA STOCKS: Outflows Continue to Challenge Asian Bourses
Apr-21 01:55
The ongoing theme of outflows dominate Asia markets again as any inflows are short lived.
- South Korea: Recorded outflows of -$88m as of 18th, bringing the 5-day total to -$1,001m. 2025 to date flows are -$12,479, m. The 5-day average is -$200m, the 20-day average is -$431m and the 100-day average of -$156m.
- Taiwan: Had outflows of -$552m as of 18th, with total outflows of -$2,292m over the past 5 days. YTD flows are negative at -$20,009. The 5-day average is -$458m, the 20-day average of -$240m and the 100-day average of -$233m.
- India: Had inflows of +$470m as of the 17th, with total outflows of -$72m over the past 5 days. YTD flows are negative -$15,486m. The 5-day average is -$14m, the 20-day average of +$17m and the 100-day average of -$142m.
- Indonesia: Had outflows of -$487m as of 17th, with total outflows of -$1,273m over the prior five days. YTD flows are negative -$3,440m. The 5-day average is -$255m, the 20-day average -$100m and the 100-day average -$47m
- Thailand: Recorded outflows of -$40m as of the 18th, outflows totaling -$33m over the past 5 days. YTD flows are negative at -$1,422m. The 5-day average is -$7m, the 20-day average of -$25m the 100-day average of -$19m.
- Malaysia: Recorded inflows of +$9m as of the 18th, totaling -$75m over the past 5 days. YTD flows are negative at -$2,853m. The 5-day average is -$15m, the 20-day average of -$50m the 100-day average of -$40m.
- Philippines: Saw inflows of +$0m as of 17th, with net inflows of +$5m over the past 5 days. YTD flows are negative at -$287m. The 5-day average is +$1m, the 20-day average of -$4m the 100-day average of -$5m.
