FOREX: USD Index Ticks Higher, Supported By Higher UST Yields
Mar-26 00:54
The USD has ticked up in recent dealings, although aggregate moves for some of the majors is not much beyond 0.15% at this stage. The BBDXY index was last near 1271.1, slightly up on end Tuesday levels in NY. This is still sub recent highs above 1273 for the index.
- We have had both Japan and Australian inflation related prints. Japan's services PPI was slightly below forecasts at 3.0%, but is just off cycle highs. BoJ Governor is before parliament this morning, largely reiterating recent BoJ rhetoric. The economy is recovering gradually, while inflation goal is expected to be met in 2nd half of the outlook period. High uncertainties remain though.
- USD/JPY has crept higher, last near 150.10/15, still a little distance from Tuesday highs of 150.94.
- In the cross asset space, US yields have firmed since the open, up over 2bps for the 10yr to 4.33%. This offsets yesterday's dip and is likely aiding the USD at the margin. US equity futures are also a touch higher.
- AUD/USD is back under 0.6300, off around 0.15% so far for the session. The Feb monthly CPI was slightly below market expectations, but hasn't shifted A$ sentiment. NZD/USD is back under 0.5725, off by a similar amount to AUD, but is also remaining within recent ranges.
- EUR/USD is back to 1.0780/85, down a touch for the session.
- We only have Japan leading and coincident indices on tap later, which typically aren't market movers.
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ASIA STOCKS: Asian Equity Flows Mixed, India Continues To See Outflows
Feb-24 00:43
Flows were mixed last week, with Taiwan seeing about $1b of inflows, with $615m coming on Friday. India erased roughly half of Wednesday large inflow, to post another week out outflows.
- South Korea: Recorded -$63m in outflows Friday, bringing the 5-day total to -$329m. YTD flows remain negative at -$1.694b. The 5-day average is -$66m, better than the 20-day average of -$82m but worse than the 100-day average of -$106m.
- Taiwan: Posted $615m in inflows Friday, bringing the 5-day total to $1.003b. YTD flows remain negative at -$2.037b. The 5-day average is $201m, better than the 20-day average of $74m and the 100-day average of -$49m.
- India: Recorded -$405m in outflows Thursday, bringing the 5-day total to -$535m. YTD outflows remain heavy at -$11.142b. The 5-day average is -$107m, better than the 20-day average of -$234m and the 100-day average of -$226m.
- Indonesia: Posted -$43m in outflows Friday, bringing the 5-day total to -$71m. YTD flows remain negative at -$718m. The 5-day average is -$14m, better than the 20-day average of -$26m and the 100-day average of -$33m.
- Thailand: Saw -$21m in outflows Friday, reducing the 5-day total to $64m in net inflows. YTD flows remain negative at -$225m. The 5-day average is $13m, better than the 20-day average of $3m and the 100-day average of -$19m.
- Malaysia: Registered -$19m in outflows Friday, bringing the 5-day total to -$127m. YTD flows are negative at -$912m. The 5-day average is -$25m, worse than the 20-day average of -$22m and in line with the 100-day average of -$27m.
- Philippines: Recorded -$7m in outflows Friday, bringing the 5-day total to -$47m. YTD flows remain negative at -$176m. The 5-day average is -$9m, worse than the 20-day average of -$4m and the 100-day average of -$5m.
Table 1: EM Asia Equity Flows
AUSSIE BONDS: ACGB June-34 Auction Result
Feb-24 00:11
The AOFM sells A$300mn of the 4.25% 21 June 2034 Green Bond:
- Average Yield (%): 4.4294 (Prev. 4.3965)
- High Yield (%): 4.4325 (Prev. 4.3975)
- Bid/Cover: 5.3833x (Prev. 4.5333x)
- Allotted at Highest Accepted Yld as % of Bid at that Yld (%): 12.9 (Prev. 72.7)
- Bidders: 43 (Prev. 28), 17 (Prev. 9) successful, 10 (Prev. 3) allocated in full
FOREX: USD Edges Down, As Safe Havens Underperform Amid Higher US Equity Futures
Feb-24 00:10
The USD is weaker in the first part of Monday trade, the BBDXY index ticking down by 0.10% to 1284.85. This leaves the index fairly close to its simple 100-day MA. We are still close to last week's multi month lows at 1282.2.
- JPY and CHF are lagging broader USD softness so far today. Both currencies, particularly yen, outperformed during the risk off US session on Friday. USD/JPY was last little changed close to 149.30. USD/CHF was at 0.8975/80.
- Some medical experts looked to play down fears of a fresh pandemic, after it was reported a new covid like virus that can reportedly transmit from bats to humans weighed on broader risk appetite on Friday (including US equities). So far today US equity futures are +0.35-0.40% firmer.
- AUD and NZD have ticked up, but remain short of recent highs. AUD/USD last near 0.6370, NZD/USD close to 0.5750. Earlier NZ retail sales volumes for Q4 last year printed better than forecast with discretionary spending recovering.
- EUR/USD is up a touch to 1.0475/80 in latest dealings. The German election saw the conservative CDU/CSU win the most votes, which was in line with expectations. Focus now shifts to what type of coalition government will be formed.
- There is little in the way of further data outcomes/event risks in today's Asia Pac session, leaving markets on headline watch. Japan markets are also out today (meaning no US cash Tsy trading). Tsy futures are softer in early dealing today.
