IDR: Rupiah Weakens In Lead-Up To Bank Indonesia Rate Review
Nov-17 04:28
Spot USD/IDR advances for the fourth day in a row, last trades +90 figs at IDR15,693. Topside technical focus falls on Nov 4 high of IDR15,750, while bears keep an eye on Nov 11 low of IDR15,393.
- USD/IDR 1-month NDF last +64 figs at IDR15,717. Bulls take aim at Nov 3 high of IDR15,838, with bears setting their sights on Nov 11 low of IDR15,385.
- Foreign investors sold a net $85.22mn in Indonesian stocks Wednesday. The Jakarta Comp traded on a heavier footing but has regained poise today and last deals around unchanged levels.
- INDOGB 5-Year/10-Year spread has widened at the margin, moving further away from multi-year flats printed last week.
- Palm oil futures have retreated and the contract for January delivery last operates MYR150/MT below neutral levels, consolidating below its 50-DMA/MYR4,000/MT mark. The aggregate BBG Commodity Index sits ~0.6% lower on the day.
- Bank Indonesia will almost certainly raise its 7-Day Reverse Repo Rate today, with most analysts expecting a 50bp hike. Click here to see our preview.
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ECB: Villeroy Points To Slower Hikes After 2% Hit, Organic B/S Runoff May Start End ‘22 (FT)
Oct-18 04:23
In an interview with the FT ECB’s Villeroy “expressed irritation at the idea the ECB risked pushing the economy into recession, saying this “misses the point”. The “predominant” risk was not higher rates, but the energy crisis.”
- “The ECB would continue to “go quickly” until its deposit rate reached 2 per cent — the so-called neutral rate of interest at which it neither stimulates nor restricts the economy — at the end of the year. Any increases beyond that point would be at “a more flexible and slower pace”, he said.”
- “The ECB aims to start shrinking the €9tn balance sheet that ballooned during the pandemic once rates are at neutral. Villeroy said from the end of this year the bank could stop replacing some of the bonds maturing under its €3.26tn asset purchase programme.”
- “The TLtros were designed to encourage lenders to keep lending during the pandemic by providing them with financing at minus 1 per cent. However, rising rates mean lenders are now in line for a risk-free profit of over €25bn.”
- “Shrinking the balance sheet would be handled with care, he said. “Let us start clearly but cautiously, and then accelerate gradually.””
- Click for full story.
US TSY OPTIONS: TYX2 109.50 Puts Given
Oct-18 04:17
TYX2 109.50 puts ~5K given at 0-04, delta -11%.
STIR: RBNZ Dated OIS Pulls Higher after CPI, Sell-Side Get More Hawkish
Oct-18 04:16
| RBNZ Meeting | OIS Implied OCR 18 Oct '22 (%) | OIS Implied OCR 17 Oct '22 (%) | Change |
| Nov-22 | 4.21 | 4.11 | 0.10 |
| Feb-23 | 4.87 | 4.57 | 0.30 |
| Apr-23 | 5.20 | 4.93 | 0.27 |
| May-23 | 5.25 | 5.05 | 0.20 |
| Jul-23 | 5.21 | 5.02 | 0.19 |
| Aug-23 | 5.22 | 5.00 | 0.22 |
| Oct-23 | 5.24 | 5.00 | 0.24 |
| Nov-23 | 5.13 | 4.92 | 0.21 |
| Feb-24 | 5.07 | 4.87 | 0.20 |
| Apr-24 | 5.00 | 4.87 | 0.13 |
| May-24 | 4.94 | 4.87 | 0.07 |
| Jul-24 | 5.05 | 4.87 | 0.18 |
Source: MNI - Market News/Bloomberg
