ASIA FX: USD/KRW Recoups Wednesday Losses, USD/CNH Above 7.1400
Sep-04 05:18
In North East Asia FX, won weakness is the standout in the first part of Thursday trade. CNH and HKD are little changed, while TWD is up modestly.
- For USD/CNH we are holding above 7.1400 in latest dealings. The USD/CNY fixing moved lower but remains just above 2025 to date lows. Some USD gains emerged after onshore equities faltered notable. The CSI 300 is off close to 2.5%, with BBG reporting that the authorities are considering measures to calm market sentiment.
- Spot USD/KRW has recouped yesterday's losses. The pair back around 1394 in latest dealings, up +0.30% for the session. Local equities are up a touch, but the Kospi remains sub 3200. Rtrs reported: "SOUTH KOREA VICE FIN MIN: CLOSELY MONITORING FX MARKETS, WILL ACT TO STABILIZE FX MARKETS IF NEEDED, SOUTH KOREA VICE FIN MIN: DISCUSSING FX WITH THE U.S." This may keep selling interest on moves towards 1400.
- Spot USD/TWD is down a touch to 30.67, against recent highs of 30.75. USD/HKD is close to 7.8000.
In South East Asia, moves have been modest. USD/IDR is a touch higher last around 16440. More student protests are planned for today, but BI is likely to remain proactive on any attempts to move above 16500.
- USD/PGP sits slightly lower, last around 57.20, while USD/MYR is a touch higher, last close to 4.2300.
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LOOK AHEAD: Eurozone Timeline of Key Events (Times BST)
Aug-05 05:18
| Date | Time | Country | Event |
| 05-Aug | 0745 | FR | Industrial Production |
| 05-Aug | 0800 | ES | Industrial Production |
| 05-Aug | 0815 | ES | S&P Global Services / Composite PMI (f) |
| 05-Aug | 0845 | IT | S&P Global Services / Composite PMI (f) |
| 05-Aug | 0850 | FR | S&P Global Services / Composite PMI (f) |
| 05-Aug | 0855 | DE | S&P Global Services / Composite PMI (f) |
| 05-Aug | 0900 | EU | S&P Global Services / Composite PMI (f) |
| 05-Aug | 1000 | EU | PPI |
| 06-Aug | 0700 | DE | Manufacturing Orders |
| 06-Aug | 0830 | EU | S&P Global Final Eurozone Construction PMI |
| 06-Aug | 0900 | IT | Industrial Production |
| 06-Aug | 1000 | EU | Retail Sales |
| 07-Aug | 0700 | DE | Trade Balance / Industrial Production |
| 07-Aug | 0745 | FR | Foreign Trade |
| 11-Aug | 0900 | IT | HICP (f) |
| 11-Aug | 1000 | IT | Foreign trade and import prices |
| 12-Aug | 1000 | DE | ZEW Current Expectations Index |
OIL: Crude Stabilises, Watching Outcome Of US Threats On Russian Oil Purchasers
Aug-05 04:57
Oil prices are only slightly lower today after falling over 5% since last Wednesday. WTI is 0.15% lower at $66.19/bbl off its intraday low of $66.02. Brent is down 0.1% to $67.37/bbl after falling to $67.22, trading below the 50-day EMA at $67.95. The USD index is little changed.
- Oil is finding support from the August 8 deadline for Russia and Ukraine to agree on a truce otherwise the US will increase tariffs on not only Russia but also those who purchase its oil. He has been targeting India and PM Modi has responded that India is not going to stop buying Russian fossil fuels. If measures are imposed and are effective in reducing Russian exports, then global supply could be materially impacted as other sources are sought but currently markets see that scenario as unlikely.
- Before Russia’s invasion of Ukraine, India didn’t import oil from there but now around a third comes from Russia driven by its lower prices, according to Bloomberg. China is also a major importer of Russian crude but has not yet been named specifically.
- Assuming uninterrupted Russian oil shipments, global excess supply is widely expected with OPEC ramping up production. Supply indicators will therefore be monitored closely. Later on Tuesday industry-based US inventory data is released.
- Later June US trade, final July S&P Global services/composite PMIs and services ISM print. In Europe, there are July services/composite PMIs and June euro area PPI.
JGBS: Richer Despite Poor 10Y Auction
Aug-05 04:53
JGB futures are holding stronger, +26 compared to settlement levels, despite today’s poor 10-year auction.
- (MNI) A few Bank of Japan board members said they would consider resuming interest rate hikes if trade tensions were expected to ease without further escalation, according to minutes of the June 16-17 meeting released on Tuesday. However, the minutes offered no indication on the timing or pace of future rate increases.
- Bloomberg - "MUFG CEO Hironori Kamezawa called on the BOJ to raise its policy rate as early as the next meeting to combat strong inflation."
- Cash US tsys are flat to 2bps cheaper, with a flattening bias, in today's Asia-Pac session after yesterday's modest extension of Friday's rally.
- Cash JGBs are 1-4bps richer across benchmarks, led by the 10-year. The benchmark 10-year yield is 4.1bps lower at 1.475% after today's supply.
- The 10-year JGB auction delivered weak results, with the low price failing to meet expectations at 100.21, according to the Bloomberg dealer poll. Moreover, the cover ratio decreased to 3.0592x from 3.5070x, and the tail lengthened to 0.14 from 0.03.
- Swap rates are flat to slightly lower. Swap spreads are mostly wider.
- Tomorrow, the local calendar will see Cash Earnings data.
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