ASIA FX: PHP Best Performer For The Week, Aided By Equity Rebound
Most USD/Asia pairs in South East Asia FX are lower, although for the week only PHP FX is firmer. There is less fallout for South East Asian markets from tech equity related losses. However, less prospects of a Fed easing before year end is providing some USD support via the yield channel.
- PHP is up around 0.25% at this stage, as we continue to see moves above 59.00 draw selling interest in the pair. Yesterday also saw strong offshore equity inflows of just over $125.6mn. Offshore investors may be using depressed PCOMP levels as fresh entry points. PCOMP shares are up firmly from multi year lows under 5600, last approaching 6000. USD/PHP is still above its 20-day EMA though, which comes in at 58.84 (spot was last 58.90).
- USD/IDR is flat for the week, holding above 16700 at this stage. The steady BI hand this week, amid a renewed focus on FX stability has likely helped at the margins. Still, the pair remains above all its key EMAs (20-day back near 16683.45).
- USD/MYR is lower, continuing the recent run of greater volatility in the pair, but at 4.1435/40 still remains above recent lows. For now, we seem to have firm resistance above the 4.1600 level.
- USD/THB is relatively steady, the pair ticking back up to 32.45/50, but likewise remains within recent ranges.
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EUROZONE ISSUANCE: EGB Supply Daily
Germany will conclude auction issuance for the week today. Italy has opened books for its retail-only BTP Valore and we pencil in a Slovakian syndication. Estonia has held a syndicated transaction yesterday, while Finland and Germany held auctions yesterday, and Slovakia and the EU have both held auctions earlier this week. We pencil in issuance of E15.4bln for the week (excluding retail), down from E38.8bln last week.
- Germany will return to the market today with E3bln of the 7-year 2.50% Nov-32 Bund (ISIN: DE000BU27014) on offer.
- Italy will look to issue a new 7-year Oct-32 BTP Valore (ISIN: IT0005672016) this week. Books across the first two days totalled E9.7bln, almost 50% higher than the last BTP Valore (E6.6bln in May 2024 with eventual takeup of E11.2bln) but less than the E11.1bln day 1-2 total for the Valore in February/March 2024 (eventual takeup E18.3bln).
SCHATZ TECHS: (Z5) Overbought But Uptrend Remains Intact
- RES 4: 107.400 Round number resistance
- RES 3: 107.365 High Jul 7 (cont)
- RES 2: 107.348 50.0% retracement of Apr 7 - Sep 25 bear leg (cont)
- RES 1: 107.320 High Oct 17 and the bull trigger
- PRICE: 107.190 @ 06:24 BST Oct 22
- SUP 1: 107.150/108 Low Oct 15 / 20-day EMA
- SUP 2: 106.965 Low Oct 6
- SUP 3: 107.030 Low Oct 10
- SUP 4: 106.995 Low Oct 8
A bull cycle in Schatz futures remains intact following recent gains and the latest pullback is for now, considered corrective. The contract has breached 107.190, the Oct 5 and 8 high. This signals scope for a climb towards 107.348 next, a Fibonacci retracement point on the continuation chart. Note that the contract is overbought. A deeper pullback would allow this condition to unwind. Initial key support lies at 107.108, the 20-day EMA.
EUROZONE T-BILL ISSUANCE: W/C 20 October
Greece is still due to sell bills this week, while Germany, the Netherlands, France and the ESM have already come to the market. We expect issuance to be E20.6bln in first-round operations, up from E20.4bln last week.
- This morning, Greece will look to issue E500mln of the new 26-week Apr 24, 2026 GTB.
