Daily FX Update, 19 September 2014

v  US initial jobless claims retraced to 280k last week, a two-month low v  In the euro area, take-up of the ECB’s first TLTRO was much lower than expected  v  Japan's trade deficit had narrowed slightly to 948.5 billion yen   v  In China, the average price of new homes in 70 medium and large cities fell at a faster pace in August  v  In Malaysia, BNM has decided to maintain the OPR at 3.25%

OVERNIGHT MARKET UPDATE: ·         US initial jobless claims retraced to 280k last week, a two-month low. US housing starts fell  14.4% m/m and building permits declined 5.6% m/m in August but these followed strong growth in July.  The trend in housing construction remains positive and leading indicators like the NAHB survey point to  further improvement. The headline Philadelphia Fed survey printed a little below market expectations  at +22.5 in September against +28 in August. But the details were generally better, with employment,  new orders, shipments and prices all higher in the month. ·         In the euro area, take-up of the ECB’s first targeted longer-term refinancing operation (TLTRO)  was much lower than expected, with just EUR82.6bn allotted. But given that 255 financial institutions  participated, it is apparent that there is little stigma associated with participating in the operation.  There are seven more allocations due between now and mid 2016, with the next one in early  December. ·         In the currency market, the USD retraced some of the previous day's losses against a range of  currencies. It was by no means a uniform move, however, with the JPY, KRW and TWD, among others,  simply consolidating yesterday's moves. The lower-than-expected take-up of the ECB’s TLTRO initially  saw EUR and European bond yields a bit higher, but the moves were not sustained. For regional  currencies China's policy easing, or only timid steps in that direction, remain the main issue. ·         US Treasuries consolidated their post-FOMC moves overnight and finished the session little  changed. The 2-year yield declined 1 bp to 0.56% and the 10-year yield declined 1 bp to 2.61%. ·         US equities advanced overnight, with financial stocks outperforming. The S&P 500 rose 0.5% to  2,011, the Dow Jones closed 0.6% higher at 17,266 and the Nasdaq finished 0.7% higher at 4,593. ·         Oil prices declined overnight, with USD strength cited. WTI futures ended 0.9% lower at  USD93.06 per barrel and Brent futures eased 0.7% to USD97.64 per barrel. ·         Spot gold prices 0.2% higher at USD1225 per ounce overnight.   INDICATIVE MAJOR CURRENCIES Last Close  8.05 am Snapshot        Bid                   Offer Expected Ranges for Today         Low                       High USD/MYR 3.2280 3.2350 3.2530 3.2250 3.2700 JPY/MYR (100) 2.9655 2.9700 2.9930 2.9500 3.0200 SGD/MYR 2.5461 2.5490 2.5740 2.5400 2.5900 EUR/MYR 4.1690 4.1760 4.2100 4.1500 4.2400 AUD/MYR 2.8984 2.9010 2.9310 2.8800 2.9600 GBP/MYR 5.3017 5.3110 5.3550 5.2800 5.4000 USD/JPY 108.85 108.70 108.90 108.30 109.30 EUR/USD 1.2915 1.2910 1.2940 1.2870 1.2980 AUD/USD 0.8979 0.8970 0.9010 0.8940 0.9040