HKD: USD/HKD Sell-Off Unlikely to be Triggered by HKMA
Jul-17 09:58
The USD/HKD rate underwent a spell of volatility shortly after the local close, with the rate slipping 80 pips before recovering across the European morning. No specific headlines or newsflow crossed to trigger the move, which may raise speculation of further intervention from HKMA as the rate pressures the weak-side of the band.
- HKMA have already intervened this week, buying HKD 14.8bln to defend the peg on Tuesday - but the price action is not consistent with the intervention style of the central bank, which tend to sit on the bid rather than push through sharp spot swings in prices.
- Similarly, there have been no parallel moves in either FX swap rates or a notable uptick in the HIBOR fix overnight. UBP in Singapore see "no news at all to drive" this move, citing positioning rebalancing for the intraday HKD rally.
- Some focus may be being paid to a revived listing filings of phone glass maker Biel Crystal, who have reportedly held prelim discussions with authorities after being forced to abandon a float as recently as 2022 valued at between $1-2bln. Such a float size would be among the largest corporate activity of the year, adding to an IPO pipeline that already includes Shein.
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OUTLOOK: Price Signal Summary - Monitoring Support In The EUROSTOXX50 Contract
Jun-17 09:55
- In the equity space, the trend condition in S&P E-Minis is unchanged, it remains bullish and the contract traded to a fresh cycle high last Wednesday, reinforcing current bullish conditions. For now, the most recent pullback is considered corrective. The contract has pierced support at 6000.18, the 20-day EMA. A clear breach of this average would expose the 50-day EMA, at 5890.99. Key short-term resistance and the bull trigger, has been defined at 6128.75, the Jun 11 high.
- The latest pullback in the EUROSTOXX 50 futures contract has resulted in a breach of the 50-day EMA at 5299.04. Price has also pierced 5255.00, the May 23 low. A clear break of both support points would signal a short-term top and highlight scope for a deeper retracement. This would open 5178.00, the May 6 low and 5081.16, 38.2% of the Apr 7 - May 20 bull leg. Initial resistance to watch is 5363.03, the 20-day EMA.
EU-BOND SYNDICATION: 3.375% Oct-39 EU-bond: E5bln WNG: Allocations out
Jun-17 09:53
- Spread set at MS+73bps (guidance was MS + 75bps area)
- HR: 88% vs 4.25% Jul-39 Bund (DE0001135325)
- Tap Size set earlier: E5bln (WNG) (the bottom of the E5-9bln range MNI expected)
- Final books in excess of E93bln (inc E5.9bln JLM interest)
- ISIN: EU000A3LZ0X9 (immediately fungible)
- JLMs: BofA (DM/B&D) / GSBE SE / NatWest / SG / UBS
- Timing: Hedge deadline 11:10BST / 12:10CET. Pricing later today
From market source / MNI colour
BUNDS: Buxl Block trade
Jun-17 09:46
Buxl Block trade, suggest Buyer:
- UBU5 ~1.8k at 120.80.
