FX
Global
·
Fed
Yellen stressed on
her commitment to support recovery even as the economy approaches full
employment. However, at this point, she commented that the economy is far from Fed’s
target of full employment and inflation and more than two years would be
required to close the gap. That is not to say that the economy is in bad shape.
In fact, the Fed stated in the latest Beige Book that growth was back on track
as the harsh winter conditions subsided.
·
Equities were buoyant throughout overnight session, lifted at
first by a relief rally on China’s growth which was not as bad as feared at
7.4%y/y. Data was decent as industrial production exceeded expectations to
print 0.7%m/m. Tonight we have initial jobless claims and continuing claims.
·
The
outperformer amongst the major is GBP, boosted by a bigger than expected slide
in the ILO unemployment rate. The dollar index moved in tandem with the UST
10-year yield which has reversed out its Wed gains and is back to levels around
2.62%. The dollar index was seen around 79.72.
·
USD/AXJs
may trade with a downside bias, given the rather buoyant mood and an absence of
dollar strength. Onshore markets in Philippines are already away for Holy Week.
Weekend positioning will also start for players in Singapore and Indonesia in
preparation for a long weekend which starts tomorrow – Good Friday. Thinner
trading interests likely in South East Asia.
G7 Currencies
·
DXY – Rangy. Dollar has entered the ichimoku
cloud on the 4-hourly intra-day chart and last printed 79.72. MACD shows that
the greenback has pared much of its bullish momentum and is now likely settling
into the 79.688-79.920 range. The cloud also suggests neutrality today. Key
data today is the weekly initial claims but any reaction to the data
could be discounted as investors continue to digest Fed Yellen’s words.
·
USD/JPY – Range-bound. USD/JPY retreated back towards the 102-figure by this morning from the
overnight high of 102.37. The pair is now supported by the 102-figure. 18-SMA
and 40-SMA had a positive crossover while MACD shows paring of bullish
momentum. Hence, we think direction is unclear and pair is lacking conviction
on either side. Intra-day trades are likely to remain confined within
102.00-102.47 for now. Japan’s Kuroda said this morning that BOJ will
stick to easing until 2% inflation is stable. Policy adjustments could be made
if necessary whilst downside and upside risks are monitored.
·
AUD/USD
– Turning
Bearish. Pair was choppy throughout Wed, barely lifted by China’s growth
numbers. Two-way interests seen though risks have tilted up. Bearish momentum
has pared and prices are capped by 0.94-figure. A break of this level exposes
the next resistance at 0.9424. We do not expect pair to venture beyond the
latter barrier as the quarterly CPI release looms next week. 0.9335 to slow
offers.
·
EUR/USD – Choppy. EUR/USD was capped by the 1.3848-barrier and price
moves remained very choppy. Momentum is lacking on either side. We expect the
pairing to remain within the 1.3790-1.3850 band for now.
Regional FX
·
The SGD NEER trades 0.56% above the
implied mid-point of 1.2570 with the top end estimated at 1.2320 and the floor
at 1.2820. USD/SGD – Downside risks. The USD/SGD
remained below the 1.25-level even as Mar NODX disappointed. Pair breached our
support at 1.2518 yesterday and is currently hovering lower around 1.2495.
4-hourly MACD forest has flipped and is now below the zero line. As the dollar
continue to slide, price action today should see the support at 1.2474 with
1.2518-support level now resistance level for today. Onshore markets are
closed tomorrow for Good Friday and re-opens on Mon.
·
Singapore’s non-oil domestic exports
(NODX) disappointed, declining 6.6% y/y (-8.9% q/q sa) in Mar from +8.9% (+7.2%
q/q sa) in Feb, coming in worse-than-market’s 0.5% (-3.0% q/q sa) expectations.
Dragging NODX lower were both electronics and pharmaceutical shipments, which
fell 16.1% and 44.6% y/y respectively.
·
AUD/SGD – Rangy. Cross
has been trading range-bound in our four-hourly chart between 1.1685/1.765.
Last sighted higher around 1.1722, risks are still to the downside, though MACD
forest is indicating waning bearish momentum. We need to see a break in either
direction for directional clarity. Until then, rangy trades within the
1.1685/1.1765 range is likely. SGD/MYR – Still rangy with
upside risks. The cross continues to edge higher, last sighted around
2.5914. Risks are still to the upside, though bullish momentum appears on the
wane as indicated by MACD forest. We reckon the cross should trade range-bound
between 2.5854/2.5973 with some upside risks today.
·
USD/MYR – Downside Risks. Pair slipped under the
3.24-figure, hovering thereabouts this morning and losing bullish momentum on
the daily chart. 3.2303 is a minor support while 3.2495 guards topsides. Break
of the support level exposes the next at 3.2230. 1-month NDF shows increasing
bearish pressure with next support at 3.2372 at risk. The local bond markets
remained on the defensive for much part of the week and lower prices finally
attracted some bargain hunter. That said, sideway action dominated Wed session.
Malaysia’s CPI steadied at 3.5%y/y in Mar, in line with expectations.
Our economics’ team measure of core inflation edged higher to 2.0%.
·
USD/CNY
was fixed lower at 6.1575 (-0.0014), vs. previous 6.1589 (+2.0% upper band
limit: 6.2832; -2.0% lower band limit: 6.0368). CNY/MYR was fixed at 0.5207 (-0.0017).
·
USD/CNY – Tilting lower. USD/CNY edged lower to around
6.2195 along with a lower fixing. 6.2120 now supports the pair while 6.2305
continues to guard upsides. China may lower reserve ratio of some rural
banks (BBG). This was after reports of some bank runs in the rural region.
·
1-Year
CNY NDFs – Steady. The
1Y NDF pulled back along with spot prices after the lower fixing. There is a
lack of momentum for the pair nonetheless and we see rangy-trades to extend
within 6.2475-6.2537.
·
USD/CNH
– Turning
bearish. Perhaps USD/CNH is garnering the most downside momentum amongst
its USD/yuan peers. Pair prints 6.2200 as we write, approaching the
6.2186-support ahead of the next at 6.2135 (40-SMA on the –hourly chart).
6.2238 is now seen as the nearest resistance level.
·
USD/IDR – Bearish moves.
The USD/IDR is inching lower this morning on the back of dollar weakness
overnight. Pair is last sighted hovering around 11424, with momentum now
flipped and indicating slight bearishness. Some support for the IDR today could
come from foreign buying if foreign funds continue to add to their portfolio
holdings like they did yesterday with a net USD30.1mn in equities purchased and
IDR0.39tn added to their outstanding government bonds holdings yesterday.
Nearby support is at 11411 ahead before 11400 while next target remains at
11471 (last Fri’s high). The 1-month NDF ended yesterday at 11453 with risks
still to the downside. The JISDOR was fixed higher at 11438 yesterday from
Tue’s 11434. Onshore markets are closed tomorrow for Good Friday and
re-opens on Mon.
·
USD/PHP – Closed. Onshore
markets are closed today for the Easter holidays. The 1-month NDF is currently
edging marginally lower this morning at 44.380 with MACD forest just below the
zero line still. Onshore markets resume on Mon.
·
USD/THB – Downside risks. USD/THB
wobbly this morning, trading around the 32.220 level. Currently, 4-hourly MACD
forest is indicating bearish momentum still. Moreover, continued foreign buying
of Thai assets like they did yesterday (net THB245.4mn in equities and THB1.1bn
in bonds) should weigh on the pair today. Still, the pair has been rangy for
the past few sessions with little directional clarity. Today dollar weakness
should weigh on the pair with support seen at 32.137 and barrier at 32.370.
Rates
·
Local bond market continued to open on the defensive
side. Market failed to response despite MYR gained traction which touched
3.2390 from 3.2515 at the opening. However, some buying seen as price edged
lower. Market expected to remain range trading in absence of making moving
factors. At market close, benchmark MGS ended unchanged in relatively
quiet market.
·
The IRS market was quiet with trades being reported
only at the short-end 9M tenor. At market close rates barely moved.
·
The PDS market saw a lot of funds reallocation.
Prasarana 2024 changed hands at 4.60%, a better pickup than the recent
Danainfra 2024 being printed at 4.55%. The shorter
Prasarana 2019 was dealt at 4.03%, 1bp higher than yesterday’s close at 4.02%.
Apart from those, market was generally quiet without much action.
Indonesia
·
Indonesia bond market remains quiet on yesterday’s
trading session as there were minimum positive sentiments moving the market.
10-yr, 15-yr and 20-yr benchmark series yield shifted up to 7.888% (0.9bps),
8.262% (1.7bps) and 8.433% (1.4bps) while 5-yr yield shifted down to 7.394%
(1.9bps). Trading volume at secondary market remains heavy as trading volume
amounted Rp7,455 bn (vs average per day trading volume of Rp7,602 bn). FR0070
(10-yr benchmark series) and FR0068 (20-yr benchmark series) was the most
tradable bond during the day. FR0070 total trading volume amounting Rp1,612 bn
with 79x transaction frequency and closed at 103.293 yielding 7.888%.while
FR0068 total trading volume amounted Rp755 bn with 80x transaction frequency
and closed at 99.433 yielding 8.433%.
·
Indonesia Debt Management Directorate General (DMO)
release bond ownership data as of April 15th, 2014. Foreigners recorded net
sell after disappointment quick count result amounting Rp300 bn. Foreign
ownership stood at Rp370.09 tn (34.24% of total outstanding of government
bond). On other hand, banks recorded net sell amounted Rp1.33 tn within the
period of 10 – 11 April.
·
On the corporate bond segment, trading volume was seen
thin amounting Rp437 bn (vs average per day trading volume of Rp750 bn).
BNLI01ACN1 (Shelf registration I Bank Permata Phase I Year 2013; A serial bond;
Maturity date: 3 Jan 2015; Rating: idAA+) was the top actively traded corporate
bond yesterday with total trading volume amounting Rp102 bn and was last traded
at 100.55 yielding 9.1745%..
Rgds,
Maybank FX Research
Global Markets
Maybank
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