ASIA FX: USD/IDR Spot Above 16500, BI Intervening, NEA FX Softer
USD/Asia pairs are mixed in the first part of Wednesday trade, but most pairs are seeing a slightly firmer USD bias. In North East Asia, CNH, KRW and TWD are all weaker. In SEA, IDR has fallen sharply, but this spot move largely reflects catch up with the NDF weakness seen through Tuesday. PHP and MYR are outperforming somewhat.
- USD/CNH has drifted higher, support at the simple 200-day MA still holding (near 7.2210). We were last around 7.2375/80. The CNY fixing maintained recent ranges, while the onshore equity backdrop has slowed in terms of upside momentum. Markets may be waiting to see the impact or extent of consumption stimulus plans.
- Spot USD/KRW has also firmed, the pair last around 1453. This keeps us within recent ranges though. Onshore equities are higher for the Kospi, but lower for the Kosdaq. The onshore policy focus remains on curbing aggressive house price rises. Spot USD/TWD was little changed, holding above 33.00 in latest dealings.
- Spot USD/IDR rose above 16500 at the open, but further upside has been limited. BI has stated it is conducting bold intervention to maintain rupiah supply and demand. There may be some sensitivity given multi year highs above 16600 aren't too far away. Onshore equities have rebounded somewhat, the JCI up around 1% at this stage. A lawmaker stated military personnel will not occupy positions in state companies.
- USD/PHP is slightly lower, last in the 57.20/25 region, with the Peso continuing its recent outperformance trend. The Finance Chief is very bullish on this year's growth prospects, while local equities have drawn inflows from offshore so far this month (bucking the broader outflow trend seen in the region).
- USD/THB up a little, last near 33.60/65, but remains within recent ranges. The BOT minutes showed that focus is shifting to growth, following the recent 25bps cut.
- USD/MYR is back to the low 4.4300 region, as onshore markets returned today. Recent lows close to 4.4000 remain intact.
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ASIA STOCKS: China & HK Equities Pare Earlier Gains Ahead Of Xi & Ma Meeting
Chinese and Hong Kong stocks are trading mixed today, there was early strength in tech stocks, however we have since seen the move higher been completely erased, the move came after headlines came out earlier stating President Xi will meet with Jack Ma, with traders now awaiting details. The earlier move higher in tech came following DeepSeek’s breakthroughs in AI have fueled bullish sentiment, with major players like Tencent, Alibaba Health, and Ping An Healthcare surging. Earlier, Tencent jumped 7.8% as its Weixin app began beta testing with DeepSeek, while healthcare AI stocks soared on expectations of improved margins and efficiency.
- Strategists at Goldman Sachs, Morgan Stanley, and JPMorgan have turned increasingly bullish on Chinese equities, forecasting further gains. Hong Kong’s options market is seeing record trading volumes, as investors pile into tech and EV bets, pushing the Hang Seng Tech Index to its highest level since 2022, with the Index up 0.40% today.
- Key Chinese entrepreneurs including Ma have been invited to meet the nation’s top leaders this week, which is seen as the next catalyst to extend the rally in China’s stocks.
- Meanwhile, geopolitical concerns remain a headwind, with US tariffs and trade tensions in focus. The HSI Volatility Index has jumped 5pts in February, reflecting renewed market swings. However, the shift in sentiment post-DeepSeek suggests China’s tech sector is now viewed as a legitimate competitor in the AI race, attracting fresh investor flows.
- Key benchmarks in the region are currently: HSI -0.25%, HS China Enterprise -0.45%, HS Property, +0.40%, CSI 300 +0.05%, CSI 2000 +1.45%, while the Nasdaq Golden Dragon Index rose 2.27% on Friday.
RBNZ: Post Meeting Press Schedule
Per the RBNZ website, the following is the press schedule for the central bank after this Wednesday's policy meeting:
"Governor Adrian Orr will give the following media interviews:
- Radio NZ's Morning Report from 6am to 9am
- Newstalk ZB from 7:30am to 8am
- CNBC from 11am to 11:30am (NZ time)
- Assistant Governor Karen Silk will give a video interview for the National Business Review. This will be published in the morning of Friday, 21 February. "
Finance and Expenditure Committee hearing
- We appear before the Finance and Expenditure Committee (FEC) for our February Monetary Policy Statement.
- The FEC hearing will be livestreamed from 8:10am to 9am on the Parliament website.
Monday, 10 March 2025
- Deputy Governor Christian Hawkesby will speak about the February Monetary Policy Statement at the ANZ Investor Tour in Wellington, starting at 2:30pm.
- He will use presentation slides from the next Monetary Policy Statement, due to be published on 19 February 2025.
- There are no published speaking notes. The event is not being livestreamed. There will be no media interviews."
FOREX: USD Weakness Continues, Yen Up With Q4 GDP Beat, NZD & A$ Firm
The USD is weaker in the first part of Monday trade. The BBDXY index was last near 1287, close to session lows, but above intra-session lows form Friday, near 1286. Yen has outperformed so far today, aided by the Q4 GDP beat.
- USD/JPY got to lows of 151.51, but sits slightly higher in latest dealings, last near 151.65, still up close to 0.45% in yen terms versus end Friday levels from NY.
- The Q4 GDP print showed better than expected GDP growth and positive growth in nominal terms as well. Consumption was slower than the Q3 pace but at 0.1% remained positive (and above market expectations). Business investment also rose, but at +0.5%q/q was sub market forecasts.
- The data should keep the bias for the BOJ skewed towards further tightenings. For USD/JPY, earlier Feb lows at 150.93 are likely to be a downside focus point.
- NZD and AUD have also ticked higher, ahead of key central bank meetings this week. The NZ services PMI moved back into expansion territory, after a long period of contraction. NZD/USD got to highs of 0.5750, but sits back at 0.5740 in latest dealings. Key levels to watch include, resistance is 0.5763 (Dec 18 highs), while 0.5790 (100-Day EMA) could become a target.
- AUD/USD is up close to 0.6370, up by a similar amount to NZD. 0.6383 is the Dec 13 in terms of upside target. The RBA is set to begin an easing cycle with a 25bp rate cut on February 18 bringing the OCR to 4.10%. However, the decision is unlikely to be clear cut and as a result, the statement and press conference are likely to sound cautious.
- Hong Kong and China equities were higher at the lunch time break, but away from best levels. China President Xi Jinping is meeting with various private sector business leaders. This is fueling optimism of greater traction between the government and the private sector. Tech related optimism is also running in the background.
- Looking ahead, the Fed’s Harker, Bowman and Waller speak, while there isn’t any US data due to the Presidents Day holiday. Euro area December trade data print and the Eurogroup meeting takes place.
