ASIA FX: USD/IDR Tests Under 16100, KRW Underperforms
Aug-14 05:21
In Asia FX markets, trends have been mixed in North Asia. USD/CNH tested sub 7.1700, but has seen no follow through. Spot USD/KRW has edged higher. In South East Asia, IDR has rallied strongly, while MYR also remains on the front foot. There have been steadier trends elsewhere.
- USD/CNH got to lows of 7.1681, but sits back around 7.1730/35 in latest dealings. USD/JPY weakness has been a feature of the G10 space, following Bessent comments around the need for the BoJ to hike, which has likely aided CNH at the margins. Still, yen is up around 0.65% at this stage, while CNH is only around +0.1% higher. The USD/CNY fix was set at a fresh low for 2025.
- Spot USD/KRW has risen, up around 0.30% to 1383/84 in latest dealings. There doesn't appear to be a fresh direct catalyst for the move higher, although we remain in recent ranges. Equity sentiment is struggling somewhat, with modest outflows from offshore investors so far today. Spot USD/TWD is down a touch to 29.93, while USD/HKD sits close to 7.8480, away from the top end of the peg band, as HKMA intervened two days in a row.
- In SEA, USD/IDR is testing sub 16100, up around 0.60% in IDR terms. As we noted yesterday, the cross asset backdrop was in favor of further IDR gains. Portfolio have been stronger across the equity and debt space. Local stocks are at a record high, while debt inflows are already +$278mn in the first two days this week. Positive spill over from Fed easing expectations are clearly in play. Local government bond yields continue to track lower, while 5yr CDS is back to mid Feb lows.
- The Ringgit is delivering gains for a fourth day in this morning's session. Gains of +0.25% have seen it trade through the 4.20 technical to be at 4.1970. The gains this week has seen MYR trade below all major moving averages, with the nearest the 20-day EMA at 4.2320.
- Spot USD/THB is a little higher in the first part of Thursday trade, last near 32.29. This keeps us firmly within recent ranges, with late July lows near 32.11. On the topside, we have the 20-day EMA close to 32.42, while the 50-day at 32.58 is likely of more significance, as we have spent little time above this resistance level since mid April of this year. Yesterday's dovish 25bps hike is likely not helping at the margins.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
LOOK AHEAD: Eurozone Timeline of Key Events (Times BST)
Jul-15 05:18
| Date | Time | Country | Event |
| 15-Jul | 0800 | ES | HICP (f) |
| 15-Jul | 1000 | EU | Industrial Production |
| 15-Jul | 1000 | DE | ZEW Current Expectations Index |
| 16-Jul | 0900 | IT | HICP (f) |
| 16-Jul | 1000 | EU | Trade Balance |
| 17-Jul | 1000 | EU | HICP (f) |
| 17-Jul | ---- | EU | ECB Cipollone At G20 Meeting |
| 18-Jul | 0700 | DE | PPI |
| 18-Jul | 0900 | EU | EZ Current Account |
| 18-Jul | 1000 | EU | Construction Production |
| 18-Jul | ---- | EU | ECB Cipollone At G20 Meeting |
| 21-Jul | 1000 | EU | EZ Quarterly GDP Third Estimate |
| 22-Jul | 0900 | EU | ECB Bank Lending Survey |
| 23-Jul | 1500 | EU | Consumer Confidence Indicator (p) |
JGBS: Bear-Steeper But Off Cheapest Levels
Jul-15 05:16
JGB futures are weaker, -13 compared to settlement levels, but ranges have been narrow.
- Today, the local calendar will be empty apart from 5-year Climate Transition supply.
- Cash US tsys are little changed in today’s Asia-Pac session. Focus is on today’s June CPI inflation data and several Fed speakers ahead of Friday evening's policy blackout.
- Cash JGBs are flat to 7bps cheaper across benchmarks, with a steeper curve. The benchmark 10-year yield is 0.7bp higher at 1.589% after revisiting the cycle high of 1.596% earlier in the session.
- As Japan's upper house elections approach (held July 20), focus remains on the relentless rise in longer-dated JGB yields. The 30-year is up 1bp at 3.182% after hitting 3.219%. This is a fresh high on record (since it was debuted in 1999, per BBG). Concerns around fiscal slippage are a factor in the JGB sell-off. The 2/30yr JGB curve is at +240bps, just off multi-decade highs.
- Swap rates are ~1bp higher to 1bp lower, with a flatter curve. Swap spreads are mostly tighter.
- Tomorrow, the local calendar will be empty.
BOBL TECHS: (U5) Bear Cycle Still In Play
Jul-15 05:15
- RES 4: 118.390 High Jun 13 and a key resistance
- RES 3: 118.060 High Jun 20
- RES 2: 117.980 High Jul 4
- RES 1: 117.628 20-day EMA
- PRICE: 117.390 @ 05:32 BST Jul 15
- SUP 1: 117.200 Low Jul 11
- SUP 2: 117.009 1.236 proj of the Jun 13 - 16 - 20 price swing
- SUP 3: 117.000 Round number support
- SUP 4: 116.885 1.382 proj of the Jun 13 - 16 - 20 price swing
A bearish theme in Bobl futures remains intact. Last week’s move down resulted in a breach of 117.530, the Jun 5 low. The break highlights a stronger reversal and cancels a recent bull theme. 117.210, a 1.000 projection of the Jun 13 - 16 - 20 price swing, has been pierced. Clearance of this level would open the 117.000 handle. Resistance to watch is 117.628, the 20-day EMA. A clear breach of it would signal a possible reversal.
