KRW: USD/KRW Edging Higher, JPY/KRW Near Highs, Local Equities Down
Feb-27 00:41
Spot USD/KRW is a little higher in early Thursday dealings. The pair last near 1435, up +0.10% from end Wednesday levels. We remain wedged just under the 50-day EMA (near 1438.3). The 100-day EMA on the downside at 1421.7, hasn't been tested yet on the recent USD run lower.
- The won is lagging continued yen outperformance. JPY/KRW is near 9.6400, close to fresh multi month highs. A slight upside USD/CNH bias is working the other way against yen gains.
- Lingering tariff fears ahead of next week's deadline for Mexico and Canada is also likely generating some unease around fresh USD/KRW shirts at the current juncture.
- In the equity space, the Kospi is down around 0.60% in early dealings. US equity futures sit weaker, with Nasdaq futures down slightly. Nvidia headline results were better than forecast but the detail has left the market a little disappointed (particularly relative to previous earnings outcomes). Wednesday did deliver better tech equity related trends, the SOX rebounded over 2%.
- Offshore investors continue to sell local equities though, week to date outflows now at -$738mn.
- On the data front today, we have Q4 short term external debt on tap, which is unlikely to move market sentiment.
- The authorities are also looking at curbing China investment into key local industries, per onshore media reports (see this link).
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AUSSIE BONDS: ACGB Jun-54 Auction Goes Smoothly With More Demand
Jan-28 00:16
Today's result has continued the trend of firm pricing for ACGB auctions, as the weighted average yield printed 0.28bps through prevailing mids (per Yieldbroker). The cover ratio was 3.6500x versus 2.8233x previously.
- An outright yield which was around 35bps higher than the previous auction appears to have contributed to today’s bidding even though it was still 35bps lower than the November 2023 high.
- It is also important to acknowledge that improved sentiment towards longer-dated global bonds over the past month might have assisted the bid.
- The ACGB Jun-54 cash trade is slightly cheaper in post-auction dealings.
AUSSIE BONDS: ACGB Jun-54 Auction Results
Jan-28 00:09
The AOFM sells A$300mn of the 4.75% 21 June 2054 Treasury Bond, #TB169:
- Average Yield (%): 4.9405 (prev. 4.5951)
- High Yield (%): 4.945 (prev. 4.5975)
- Bid/Cover: 3.6500x (prev. 2.8233x)
- Allotted at Highest Accepted Yield as % of Bid at that Yield (%): 23.5 (prev. 70.1)
- Bidders: 58 (prev. 43), 22 successful (prev. 19), 15 allocated in full (prev. 11)
MNI: UK JAN BRC SHOP PRICES -0.4% M/M, -0.7% Y/Y
Jan-28 00:01
- MNI: UK JAN BRC SHOP PRICES -0.4% M/M, -0.7% Y/Y
