Forex Asia Closing Highlights
- China: State Information Center reported that exports may gain 16.3% y/y in H2; imports 19.3% y/y; trade surplus to see $97.8 bln.
- China: PBoC deputy governor Hu Xiaolian said that moderate yuan moves can help to adjust trade and international payment unbalances while a more flexible yuan can help make China’s monetary policy more effective. He added that yuan adjustments have helped to ease imported inflation pressure and restrain asset bubbles.
- Singapore/ Malaysia/ India: Indian Fortis Healthcare accepted Malaysian state fund Khazanah’s offer of S$3.95/sh, amounting to SGD 3.5bln ($2.6bln) to buy out the remaining part of Singapore’s Parkway Holdings Ltd.; Fortis plans to sell its 25% stake in the Singapore-based firm to Khazanah. Said it would make S$116.7mln profit from Parkway sale.
- Singapore: June manufacturing output rose a softer than expected 26.1% y/y (May: 58.4% y/y); ex-Biomed +24.8% y/y (May: 29.9% y/y).
- Indonesia: BI Governor Nasution said that full year growth is seen at 5.9%; rupiah at 9200 to the dollar in 2010 and that inflation will be at the upper end of the 4-6% r ange.
- Indonesia: FinMin estimated full year GDP at 5.9%, more optimistic than the official govt forecast of 5.8%; H1 at 5.8% and H2 at 6%. FinMin added that H2 will see higher inflation, slower exports and marginally stronger investment. 2010 budget deficit is seen at 1.5% of GDP.
- Philippines: Highlights of President Aquino’s State of the Nation Address: Said will ask Congress to pass the ‘fiscal responsibility’ law that will require a revenue source for every legislation that calls for some kind of spending. Might cut some corporate tax breaks. Acknowledged renewed interests from private groups to improve infrastructure, with minimal budget support from the government; said supports partnerships with private sector.
- Philippines: BSP Gov expects July CPI to range within 3.5-4.4% on lower fuel costs and rice prices; added that the inflation outlook remains manageable.
- Philippines: Philippine stock exchange cautioned that the stock index i.e. PSI reading was incorrect after the exchange launched a new trading system today; index had surged 14%+ in pre-lunch trades; new data to be loaded after market hours.
- Philippines: Treasurer Tan said was reviewing issuance of retail treasury bonds in Aug; might raise < PHP 100bln ($2.2bln). Added that the Treasury has received proposals for peso and solar bond swaps.
- Philippines: Private pollster Pulse Asia's survey showed that President Aquino had record levels of public trust, with over 85% of the respondents supportive of the Preside nt.
- Philippines: Budget Secy Abad added that the administration only had 38% of the 2010 budget left, making it very difficult to adhere to 2010 deficit goal. Estimated PHP 100bn could be reallocated to meet social services and education spending requirements.
- India: Credit ratings agency Moody's upgraded the local bond ratings for India by one notch to 'Ba1' from 'Ba2'; foreign currency bond ratings were affirmed at 'Baa3'; credit outlook for foreign and local currency bonds have remained put at 'Stable' and 'Positive' respectively.
- Japan's Your Party chief Yoshimi Watanabe says Japan govt needs to weaken JPY, more BoJ easing and undertake expansionary fiscal policy to beat deflation.
- Australia: PM Julia Gillard has dismissed the need for a second leaders debate with Tony Abbott despite saying election remains a "tough, close contest". Commentators were split over who won the head-to-head match-up. - Daily Teleg raph
USD/Majors: EUR rallied to 1.2955+ highs as the Sterling hit 1.55-levels and as the AUD tested 0.8990 fuelled by risk-on moves. Sovereign buyers were cited along with interest in the market to take out options above, but momentum did not last. S&P futures turning lower along with EUR coupons and redemption being watched knocked the EUR off the highs and the tumble also dragged the GBP and AUD - albeit to a lesser extent than the EUR which was at the bottom of the pack. EUR was pressured below 1.29-figure while GBP and AUD consolidated sub-1.5480 and 0.8080-ish levels respectively. Sovereign sellers, including Asian names were on the offer for the EUR/USD.
JPY Crosses: came under selling pressure in early European hours today; risk appetites showing signs of pullback added to the downtrend as well. EUR/JPY was further weighed by JPY repatriation on French BTAN/ OAT coupons and redemption due today. AUD/JPY extended slippage from morning trades on speculation of RBA pause. Nikkei closed off highs at +0.77% as regional bourses trimmed gains into Asia close.
USD/Asians: USD/AXJ bounced off lows rather swiftly as EUR's late afternoon rally fizzled out (last seen sub-1.29 terrain), weighed by assorted offers (mainly a large Asian name also known for as user of big option structures) and as concerns over the nuances in EU stress tests revived risk-off interests on the margin. Equities also narrowed gains near close, with few still-open indices extending slip into red.
Oil weighed on global recovery concerns again. Crude oil last traded at $78.60/bbl.
Gold recovered a tad from overnight lows on speculation about physical demand. Spot gold trading at $1190.65-1191.65/oz at last indication.
NORTH ASIA
USD/KRW: Intervention-type of moves put the brakes on USD/KRW bears that were headed for a break below the 1190-handle; integrity of the level remained and trades ended a tad above 1191.
USD/CNY: Spot prices continued to trade near the 6.78-figure into closing; 1-year NDFs came off 6.68-ish lows into Asia close as dollar slump eased.
USD/HKD: Pair bounced off lows to 7.7665+ as stocks gave up part early gains and dollar index steadied.
USD/TWD: The pairing slipped below the 32.100-mark in afternoon trades on the soggy dollar and bounced to close at 32.120 on dollar recovery and suspected intervention.
SOUTH ASIA
USD/SGD: Good US names on the offer saw USD/SGD hitting 1.3626 lows but bounced off as EUR stumbled off 1.2958 highs.
USD/MYR: bit of a bounce in the USD/MYR in sympathy with the USD/SGD as risk appetite at the margin waned; MYR gave back some of the gains against the SGD.
USD/IDR: Prices softened to 9030-ish levels in pm trades on the dollar slippage though stock losses kept downsides checked.
USD/PHP: Prices slipped to 46.12 lows on return from lunch as EUR was buoyed by early European offers, though USD/PHP got off its back to close at 46.145 as EUR bounce faded. Stock index was down on technical issues, with market data expected to be uploaded after trading hours.
USD/THB: Markets were closed for Asarna Bucha Day; normal trades resume tomorrow.
USD/INR: Whippy moves as pair dribbled to 46.81 lows in wake of EUR’s late afternoon rally, though with SENSEX deepening slide and EUR off highs, USD/INR shot higher to 46.99 highs; last seen at 46.96.
