EM ASIA CREDIT: Singapore Telecom: S&P on reputation risk

The USD/CNY fixing printed at 7.1188, versus a BBG market consensus of 7.1682.

• Today's fixing is up a touch on yesterday's outcome (7.1161), while the fixing error has widened back out to -494pips, from -366pips yesterday. This is what typically happens when we see stronger USD levels.
• For USD/CNH, we got to fresh lows of 7.1472 earlier, as the USD has been weighed on headlines that Trump has removed Fed Governor Cook from her position. US front end Tsy yields are lower, the 2yr down by 2bps. USD/CNH has stabilized somewhat though, last around 7.1515/20. 

• CHINA SETS YUAN CENTRAL PARITY AT 7.1188 TUES VS 7.1161

This morning's news that Trump has removed Fed Governor Cook will just add fuel to the rate cut fire, with Trump now in a position to appoint another uber dovish Governor to do his bidding. Will this eventually break the world's trust in US institutions though? This morning US futures have turned lower on this news, ESU5 -0.25%, NQU5 -0.40%. The AUD was helped by the return in risk appetite overnight and continued to pull back from its lows seen in the crosses last week. However risk has turned lower this morning how this eventually ends up in regards to this morning's news will determine if these moves can continue.

• EUR/AUD - Overnight range 1.7910 - 1.8038, Asia is currently trading around 1.7960. This area just above 1.8100 has seen decent supply cap it the last few months, a sustained move above 1.8100 is needed to see the move extend higher. With risk struggling in response to the firing the AUD is giving back some of these gains.
• GBP/AUD - Overnight range 2.0750 - 2.0820, Asia is trading around 2.0785. The pair traded heavily all of yesterday and is now approaching the pivot toward 2.0700 within its wider range where you could expect some demand first up. We have seen a bounce in Asia, let see if this risk off move can be extended into the more reliable London session.
• AUD/JPY - Overnight range 95.57 - 95.95, Asia is trading around 95.50. The pair has topped out back towards the 96.00 area this morning helped by the sacking news. This pair’s direction will be determined by the market's ability to follow on with this risk-on move or not.
• AUD/NZD -  Overnight range 1.1060 - 1.1084, the cross is dealing in Asia around 1.1080. The dovish RBNZ has seen the Cross surge higher breaking back above 1.100 convincingly. This move continues to now see dips supported as it looks to build momentum to push higher.

Fig 1: AUD/NZD spot 2H Chart

Source: MNI - Market News/Bloomberg Finance L.P