FX
Global
·
US
stocks rebounded on Mon,
lifted by better Mar retail sales at a print of 1.1%m/m vs. 0.7% in the month
prior. DJI recorded 0.9% gain, S&P was up +0.8% and NASDAQ at +0.6% by
close. Sentiments were also lifted by stronger-than-expected Citigroup
earnings. 10-year yields edged higher to around 2.65%. VIX index eased 5.4% in
the session to 16.11. Across the Atlantic, ECB continued to jawbone the
exchange rate. President Draghi stressed on the use of more monetary stimulus
should EUR appreciate further. Elsewhere, tensions in Ukraine rose as
pro-Russian activists attacked a police station in East Ukraine. An increasing
list of sanctions on Moscow could also increase caution amongst global
investors.
·
For
now, Asian markets rejoice the better US data. Nikkei was up +1.0% as we
write in early trade. RBA will release its Apr Minutes later in the morning.
That should hold AUD players’ attention. Later in the afternoon, Singapore’s
retail sales are due followed by Germany’s ZEW Survey. Thereafter, US
data will be in focus again along with other earning reports. Empire
manufacturing is scheduled for release followed by a speech by Fed Chair Janet
Yellen. We expect the Fed Chair to retain the dovish-but-hopeful tone
that characterized recent Minutes.
·
Thailand is still away for Songkran, to return tomorrow while
the rest of China’s Mar data awaited. Liquidity numbers and FDI may be released
anytime. Positive sentiments could keep a lid on USD/AXJs.
G7 Currencies
·
DXY – Upward tilt. Dollar ground higher on
Mon and was last seen around 79.75 this morning. Momentum indicators suggest
that the pair could extend its bullish momentum for a while now though upsides
may meet resistance at 79.920. Empire manufacturing is due while Fed Chair Yellen
could be watched for fresh insights on the Fed monetary policy.
·
USD/JPY – Two-Way Interests. USD/JPY rebounded along with
the greenback and hovered within striking distance of 102.00. Bids were slowed
by the 102-figure but still maintaining a bullish momentum. A break here
exposes the next barrier at 102.20 and then at 102.47. 101.66 supports the pair
now.
·
AUD/USD
– Rangy.
Pair is facing resistance at 0.9450 and hovered around 0.9410 as we write.
Momentum is lacking on either side and we expect pair to remain rangy within
0.9364-0.9450. Eyes are on RBA Minutes to be released soon.
·
EUR/USD – Downside
risks. EUR/USD slipped and remained
sticky around the 1.3818-level for much of overnight session and still
thereabouts this morning. A decisive move exposes the next support at 1.3771.
Topsides guarded by 1.3857. Germany ZEW survey is due today and could dictate
the direction of the pair. From the consensus polled by BBG, there are
expectations for further deterioration in economic sentiments.
Regional FX
·
The SGD NEER trades 0.40% above
the implied mid-point of 1.2592 with the top end estimated at 1.2341 and the
floor at 1.2843. USD/SGD – Climbing. Dollar strength
continues to lift USD/SGD this morning. Pair is currently hovering around
1.2540 with momentum still bullish and the RSI close to overbought territory.
With a short week ahead, some re-positioning/profit-taking should continue with
the next target still at 1.2568 (31 Mar low). Still, with no change in the
current policy stance and risks to the downside, upticks could reverse. Support
today is around 1.2518.
·
AUD/SGD – Wobbly. The cross took out our weekly barrier at 1.1801 yesterday and remains
above that level this morning. Pair is currently wobbly, hovering around 1.1808
at last sight. Risks though remain to the upside and the cross just off
overbought conditions. Price action today should see the pair hover within the
confines of 1.1765/1.1840. SGD/MYR – Rangy. The cross
is wobbly this morning, hovering around 2.5954 currently. 4-hourly MACD forest
just above the zero line, suggesting little momentum in either direction this
morning. We continue to expect the cross to trade range-bound between
2.5854/2.6019 today.
·
USD/MYR – Capped. Pair bounced above the key-barrier that we have been
eyeing at 3.2495 and was last seen around 3.2575, supported by mild dollar
gains. Higher UST yields likely to weigh on sentiments in the local bond
markets and investors may stay defensive. 1-month NDF on a bullish momentum,
suggesting the same for spot prices as well. The 1-month NDF was last seen
around 3.2620. We are still wary of selling interests and keep a close watch on
barrier at 3.2637 and support levels at 3.2495 and 3.2400.
·
USD/CNY was fixed higher at 6.1571 (+0.0040), vs. previous 6.1571 (+2.0%
upper band limit: 6.2828; -2.0% lower band limit: 6.0364). CNY/MYR was fixed at 0.5234 (-0.0011).
·
USD/CNY –
Bullish Risks. PBOC fixed the USD/CNY mid-point reference rate higher
again today. Spot bounced to around 6.2260 and bullish momentum has increased.
Further bids to meet next resistance nearby at 6.2305 while the 6.2097-mark
could slow offers. Local press has started to report defaults by soybean
importers after failing to secure credit.
·
1-Year CNY NDFs – Fresh Highs. The 1Y NDF touched eight-month high,
encouraged by the higher fixing. Intra-day chart shows accelerating bullish
momentum with 6.2560 markng the next barrier for the pair while 6.2458 support
dips.
·
USD/CNH – Uptrend
intact. Pair touched 13-month high, last seen around the 6.23-figure.
6.2216 supports the pairing on dips but bulls are in control now. Intra-day
MACD shows steady upside momentum and could be the start of an uptrend. 6.2353
marks the interim barrier.
·
USD/IDR –
Risks still to the upside. The USD/IDR saw some temporary respite this
morning, sliding to 11430 from 11438 in contrast with the rest of the region.
Momentum is still bullish with the immediate target seen at 11471 (last Fri’s
high) ahead of 11500. 11400 should support today. The 1-month NDF continues to
edge closer to the 11500-level, currently hovering higher at 11493 from 11485
yesterday with risks still to the upside. The JISDOR was fixed lower at 11444
on Mon from Fri’s 11450.
·
USD/PHP – Upticks. USD/PHP continues to push higher this morning, underpinned by continued
dollar strength. Last sighted around 44.535, risks are still bias to the
downside but waning. Next target is 44.641 ahead of the stronger 44.700-barrier.
Support is seen around 44.280 today. The 1-month NDF continue to climb higher,
hovering around 44.580 this morning from yesterday’s close of 44.530 with
bearish momentum waning.
·
USD/THB – Still supported. Onshore markets remained closed for the Songkran holidays
today and re-open tomorrow. With onshore markets closed, USD/THB trades
have been relatively quiet. Pair is currently hovering higher at 32.293 at last
sight with risks still tilted to the upside on our 4-hourly chart. Dollar
strength and the protracted political crisis should still keep the pair
supported and limit any downside. Support remains at 32.050, while resistance
is seen at 32.480.
Rates
·
Yields on local bond market ended unchanged despite a
weaker MYR which touched 3.2510 from 3.2355-75 at previous close while lower
UST yields failed to boost momentum. Prices opened on the defensive side but
remained supported. At market close, benchmark MGS ended unchanged in a
lackluster market. Meanwhile, at today’s auction, GII 12/28 garnered a
bid-to-cover (BTC) ratio of 2.773. The highest and lowest successful bid was
4.555% and 4.521% respectively while average bid was 4.547%. Post tender it was
quoted at 4.557%-4.548% but with muted response; pre-tender it was traded between
4.55%-46%.
·
The rates market pretty much closed where it was from
last week with no action from onshore rates. Belly rates (3-5 years) payers
firmed up, probably noting that MGS prices' rally has stalled. Also, USDMYR
rebounded close to its neckline. MYR IRS seems to be lacking in direction for
now.
·
The PDS market has been quiet for the past couple of
weeks. Post auction market failed to move even with good BTC on the 15-year
GII. Players continue to focus on high-grade short papers.
Indonesia
·
Indonesia bond market was seen rather quite amidst
closing higher as there were minimum positive sentiments moving the market.
5-yr, 10-yr, 15-yr and 20-yr benchmark series yield shifted down to 7.587%
(3.2bps), 7.853% (1.6bps), 8.221% (0.1bps) and 8.397% (1.4bps) while 2-yr yield
shifted down to 7.351% (0.9bps). Trading volume at secondary market was seen
thin as trading volume amounted Rp4,471 bn (vs average per day trading volume
of Rp7,602 bn). FR0068 (20-yr benchmark series) and SR006 (3-yr) was the most tradable
bond during the day. FR0068 total trading volume amounting Rp1,001 bn with 65x
transaction frequency and closed at 99.774 yielding 8.397%.while SR006 total
trading volume amounted Rp846 bn with 172x transaction frequency and closed at
101.878 yielding 8.019%.
·
Indonesia Debt Management Directorate General (DMO)
release bond ownership data as of April 11th, 2014. Foreigners were seen buying
amounting Rp2.27 tn couple of days before the legislative election while
banking and individuals recorded net sell amounting Rp2.98 tn between 7-8 Apr
as which in our view is the continuation of SR006 sell off by retail investor
to since SR006 is now available to be traded at the secondary market after a
one month holding period. Foreign ownership stood at Rp370.39 tn (34.27% of
total outstanding of government bond).
·
DMO to conduct conventional bond auction today with
total indicative auctioned amounting Rp8 tn. Five series to be auctioned this
week are SPN12150206 (Coupon: discounted; Maturity: 6 Feb 2015), SPN12150403
(Coupon: discounted; Maturity: 3 Apr 2015), FR0070 (Coupon: 8.375%; Maturity:
15 Mar 2024), FR0071 (Coupon: 9.000%; Maturity: 15 Mar 2029) and FR0068
(Coupon: 8.375%; Maturity: 15 Mar 2034). We see that upcoming conventional bond
auction will remain receiving good demand and sees the indicative yield for
certain series as follows FR0070 (range: 7.800% – 7.950%), FR0071 (range:
8.180% – 8.320%) and FR0068 (range: 8.340% – 8.490%).
·
On the corporate bond segment, trading volume was seen
heavy amounting Rp637 bn (vs average per day trading volume of Rp750 bn).
JSMR01CCN1S (Shelf registration I Jasa Marga Phase I Year 2013 Seri S; C serial
bond; Maturity date: 27 September 2018; Rating: idAA) was the top actively
traded corporate bond yesterday with total trading volume amounting Rp200 bn
and was last traded at 98.250 yielding 9.3849%..
Rgds,
Maybank FX Research
Global Markets
Maybank
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