CNH: CNY Fixing In Line With Estimates
The USD/CNY fix printed at 6.7413, versus a market estimate of 6.7415.
- Today's fix is very close to market expectations.
- The 5-day rolling sum of the error term has nudged a little higher though to +39pips from +30pips yesterday. This reflects last Friday's slightly downside surprise (-11pips in USD/CNY terms) rolling out of the calculation. So, for the past week the bias has been skewed to slightly higher USD/CNY levels, but we remain well within recent ranges for this metric.
- CNH has slightly outperformed broader USD strength today. USD/CNH sits unchanged presently, just under 6.7430. The DXY is +0.10% for the session so far.
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BOK: Limited Market Reaction So Far, KRW Following Equity Sentiment
As widely expected the BoK delivered a 50bps hike. This is the first time the BoK has hiked by 50bps, while the policy rate is now at its highest levels since mid-2014. Market reaction has been limited. USD/KRW is following broader USD and equity sentiment. The pair pushed above 1309 in early trade, but we are now back to 1305 in terms of the 1 month NDF. Equities have rebounded, following a strong open from Taiwan's market, which is activating its stock stabilization fund. Korea bond futures rallied to session highs post the BoK announcement. The 10yr got to +35 ticks, just under 114, which is around highs from yesterday.
EQUITIES: TAIEX Jumps On Stock Stabilisation Fund Activation
Taiwan’s TAIEX rallies hard at the open, adding over 3%, after Tuesday saw confirmation that the country will activate its stock stabilisation fund. This is seemingly providing a light bid for wider equities.
BOJ: BoJ Makes Rinban Purchase Offers
The BoJ offers to buy a total of Y1.055tn of JGBs from the market:
- Y475bn worth of JGBs with 1-3 Years until maturity
- Y500bn worth of JGBs with 5-10 Years until maturity
- Y50bn worth of JGBs with 25+ Years until maturity
- Y30bn worth of floating rate notes
