EM ASIA CREDIT: TSMC (TAISEM): Q4 results on tapes

USD/CNH is just up from session lows (7.0373), last in the 7.0375/80region. The currency is only marginally stronger, but is outperforming some other North East Asia currencies so far today, with KRW and TWD under pressure amid fresh equity market weakness. USD/JPY is lower though, back to 154.75/80, so this may be seeing some positive spill over to CNH. USD/CNY spot is also down but remains above 7.0400 at this stage. The earlier USD/CNY fix was set above market forecasts but still comfortably below yesterday's outcome. Also via BBG: "dollar-buying by major Chinese banks softens, reducing resistance to further gains for the renminbi." 

• Until we see greater push back on yuan gains the market remain comfortable to keep looking for downside in USD/CNH, with the 7.00 region the likely next focus point.
• BBG notes that a stronger yuan backdrop is also gaining traction onshore amongst economists and former central bank officials: see this link.
• Despite the break lower in USD/CNH, vol and risk reversal markets still look well behaved. The 1 month implied vol is a little higher, but at 2.44%, remains close to recent cycle lows. The 1 month RR is also up from recent lows, last -0.47.
• Focus remains on stronger yuan gains to address external imbalances, although expectations of a sharp rally in the yuan is not the consensus view point. The BBG survey only has CNY strengthening to 7.00 by Q3 2026. 

Bond futures opened up this morning in Asia but with limited follow on.  The US 10-Yr opened at 112-10+ and got to 112-12+ where it has stayed all day as it nears the topside resistance being the 100-day EMA of 112-14+.  

Cash was stronger with yields -0.2 - 1.00bps lower across the curve with intermediate maturities the best performers.  

• The 2-Yr is down -0.6bps at 3.497%
• The 5-Yr is down -0.9bps at 3.717%
• The 10-Yr is down -0.6bps at 4.17%
• The 30-Yr is down -0.2bps at 4.846%

US Non Farm Payrolls are the next focus for markets.  Here is the MNI US Payrolls Preview:  Double NFPs And A Single Unemployment Update

https://media.marketnews.com/USNFP_Nov2025_Preview_postshutdown_392dffc2d3.pdf

Tonight there is a US$75bn 6-week auction as the primary focus.

JGB futures are little changed compared to settlement levels.

• The BOJ is widely expected to raise its policy interest rate by 25 basis points to 0.75% at the upcoming December 18-19 Monetary Policy Meeting.
• Some analysts, however, caution that a December hike is not guaranteed. A 26 November Reuters article described a December move as merely “possible.” Goldman Sachs has emphasised that with only a limited number of companies having announced wage plans so far, there is a risk that insufficient information will be available by the December meeting. In that scenario, the BOJ may delay a hike until wage announcements by large firms later in December and the January Branch Managers’ meeting.
• Cash US tsys are slightly richer, with a steepening bias, in today's Asia-Pac session ahead of today's heavy US data schedule that includes headline NFP for November, weekly ADP, Retail Sales and S&P Global flash PMIs.
• Cash JGBs are little changed across benchmarks out to the 20-year, and ~2bps richer (30-year) beyond. The benchmark 10-year yield is 0.3bp lower at 1.956% versus the cycle high of 1.976%.
• Swap rates are little changed.
• Tomorrow, the local calendar will see Trade Balance and Core Machine Orders data alongside 1-year supply.

Source: Bloomberg Finance LP