ASIA FX: SEA FX Marginally Stronger To End The Week
In South East Asia FX, the bias has been for modest USD losses, but aggregate moves have not been large at this stage. Gains are not beyond 0.20% at this stage for most pairs.
- USD/THB got to lows of 32.38, but sits back above 32.40 now, so within recent ranges. Thailand officials are confident that the country will be able to achieve similar tariff rates similar to other countries in the region. Thailand equities are pushing higher again today, up +0.80%, putting the SET through 1200. Offshore investor interest has certainly been stronger this past week.
- USD/MYR is around 4.2450 in latest dealings, little changed for the session. Earlier we had Q2 GDP, which was slightly above expectations, printing at 4.5%y/y. Still, June export growth fell sharply to -3.5%y/y, against a +5.4% forecast.
- USD/IDR is a little lower, but still above 16300 at this stage. Outflows pressures from local equities and bonds have less evident as this week has progressed but haven't turned meaningful positive yet. Local equities continue to surge higher, up to 7379 in latest dealings, fresh highs since Dec last year.
- USD/PHP has edged down a touch, last in the 57.15/20 region. Recent highs in the pair rest at 57.26.
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BUND TECHS: (U5) Trading Below Last Week’s High
- RES 4: 132.42 2.000 proj of the May 14 - 20 - 22 price swing
- RES 3: 132.00 Round number resistance
- RES 2: 131.85/95 High Apr 22 and the bull trigger / High Jun 13
- RES 1: 131.27 61.8% retracement of the Jun 13 - 16 downleg
- PRICE: 130.77 @ 05:45 BST Jun 18
- SUP 1: 130.17 Low Jun 16
- SUP 2: 130.12 Low Jun 5 a key short-term support
- SUP 3: 129.30 Low May 22
- SUP 4: 128.97 Low May 14 and a reversal trigger
Bund futures are unchanged and the contract continues to trade below last Friday’s high. For now, the latest move down is considered corrective and key short-term support to watch lies at 130.12, the Jun 5 low. A break of this level would highlight a stronger reversal and undermine the bullish theme. Key short-term resistance and the bull trigger, has been defined at 131.95, the Jun 13 high.
FOREX: Asia FX Wrap - The USD Drifts Lower Heading Into FOMC
The BBDXY has had a range of 1207.92 - 1210.11 in the Asia-Pac session, it is currently trading around 1208. “Xi Jinping said there are no winners in tariff and trade wars, and pledged 1.5 billion yuan ($209 million) in aid this year to central Asian nations as Beijing seeks closer ties with the region. He also said China is ready to play a role in restoring Mideast peace.”(BBG). “CHINA FX REGULATOR: FX MARKET RESILIENCE WILL CONTINUE, ABILITY TO COUNTER FX MARKET VOLATILITY HAS IMPROVED, WILL KEEP YUAN BASICALLY STABLE AT REASONABLE AND BALANCED LEVELS" RTRS”
- EUR/USD - Asian range 1.1475 - 1.1506, Asia is currently trading 1.1505. EUR has rejected the move above 1.1600 but dips should continue to find demand, first support back towards the 1.1400 area then 1.1100/1200. Price action does not look good short-term with a potential false break above 1.1500/1.1600.
- GBP/USD - Asian range 1.3422 - 1.3447, Asia is currently dealing around 1.3445. The GBP looks to have failed in its attempts to break above the 1.35/36 Weekly pivot. First support is seen back towards 1.3400 a move back below here and we could see a deeper correction unfold.
- USD/CNH - Asian range 7.1866 - 7.1924, the USD/CNY fix printed 7.1761. Asia is currently dealing around 7.1890. Sellers should be around on bounces while price holds below the 7.2500 area and the PBOC manages the fix lower.
- Cross asset : SPX +0.07%, Gold $3396, US 10-Year 4.40%, BBDXY 1207, Crude oil $75.0
Data/Events : EZ Current Account, Italy Current Account, EZ CPI
Fig 1: GBP/USD Spot Weekly Chart
Source: MNI - Market News/Bloomberg Finance L.P
ASIA STOCKS: Hang Seng Drags Others Lower
The Hang Seng was one of the worst regional performers today, weighing heavy on other major bourses. As escalating Middle East tensions dominate this week's Federal Reserve meeting has markets sidelined to see if the FED will alter the direction for US interest rates.
The Middle East tensions are driving oil prices higher raising concerns as to the return of inflation as a catalyst for interest rates in the region.
- China's Hang Seng is down -1.15% and is down -2.75% over the last five days of trading. This dragged the CSI 300 with it, albeit marginally, down -0.07%, the Shanghai Comp was softer by -0.20% and the Shenzhen Comp down -0.36%
- The KOSPI's good run continued and is up +0.45% today and approaching a +2.00% gain over the last week.
- The FTSE Malay KLCI barely moved today and is where it started the trading day despite the BNM governor's positive comments about the economy.
- The Jakarta Composite fell -0.54%, taking back yesterday's gains.
- The FTSE Straits Times in Singapore fell -0.33% and the PSEi in the Philippines fell -0.10%
- The NIFTY 50 is up +0.20% so far today, looking to recover yesterday's losses of -0.37%
