Halister News

--DANIEL TEN KATE

(Bloomberg) -- Rupiah down 0.1% at 13,075 per dollar; Bloomberg survey sees GDP growth at 5.08% y/y vs 5.18% in 2Q, which was fastest expansion in more than two years.

• Jokowi blames “political actors” for Jakarta rally violence
• USD/IDR 1-month NDF down 0.1% to 13,178, below 200-DMA at 13,278 with bullish momentum indicators; chart here
  • NDF also above 55-DMA at 13,150
• October foreign reserves data due today, no set time; trend here
• Global funds net sold $69.6m local equities Nov. 4: exchange data
• 5-year credit-protection costs for Indonesia rose 1bp on Nov. 4 to 160.5bps, highest daily close since Aug. 3, according to CMA New York data on credit-default swaps
• Yield on 8.375% govt bond due September 2026 closed Nov. 4 up 8bps to 7.334%

(Bloomberg) -- USD/SGD rises for first time in a week as FBI’s reaffirmation that Clinton didn’t commit a crime in her handling of emails as secretary of state lifts dollar against its peers while boosting Treasury yields.

• FX pair gains 0.2% to 1.3866 after falling 0.8% in previous six days; Williams %R rebounds in oversold territory, now up to -70
• Govt bonds decline following U.S. Treasuries, with local 20- year yield up 4bps to 2.39%
• Investors should take advantage of any SGD strength by positioning short SGD against its basket, according to Nov. 4 note from RBS
  • MAS is poised to re-center the mid-point of SGD NEER by lowering it in April next year
  • The NEER is currently trading at 0.4 ppt below the mid- point of the band, by RBS’ estimates; only a level above the mid-point makes for decent risk-reward
• Oct. foreign reserves due 5pm local time
• Six-month swap-offer rate rose for first time in a week on Friday, up at 1.01689% from 1.01645%

(Bloomberg) -- Peso falls after FBI absolves Clinton ahead of U.S. presidential election; Clinton victory would help clear way for Fed rate-hike, the prospects of which were further boosted by U.S. NFPs on Nov. 4.

• USD/PHP rising for second day, up 0.1% to 48.520
  • Bullish momentum suggests near-term test of 2016 high of 48.618 set Oct. 12
  • Slow stochastics %K line at 75
• USD/PHP one-month implied volatility falls 8bps to 5.99%
• Peso’s one-month forward steady at 48.58 per dollar
• Foreign reserves due today, see trend here
• 5-year credit-protection costs for Philippines little changed on Nov. 4 at 116.5bps, below Oct. 13 high of 121bps, according to CMA New York data
• Yield on 3.625% govt bonds due Sept. 2025 up 4bps to 4.175%

(Bloomberg) -- Fresh sellers are lined up around 129-30, the Friday low from which the December 10-year Treasury contract gapped lower on Monday morning, according to fixed income traders in Asia.

• See chart gap, spurred by FBI letter that appears to exonerate Clinton in e-mail investigation
• Bearish death cross, implied by 50-DMA below 200-DMA, is confirmed on daily chart; see here
  • Slow stochastics %K at 61 poised to turn lower
• Futures fall 12 ticks to 129-28 for biggest drop this month

(Bloomberg) -- Any sell-off in risk assets in the event of a Donald Trump victory in the U.S. presidential election will be temporary as investors hunt for yields, according to First State Investments.

• “Trump, Brexit -- these are noise, which provides opportunity for people to speculate,” Nigel Foo, senior bond fund manager at First State, said in an interview on Thursday. “Risky assets, which include IDR and INR, will be sold off. But I do expect this sell-off to be short-lived.”
  • It would take time for Trump to implement his policies and for investors to assess the impact on the economy, should he win
• Foo favors the local-currency government bonds of Indonesia and India due to their high carry amid the low interest-rate environment
  • Expects the two currencies to remain stable barring a major risk-off event
  • “If you are expecting developed-market rates to be close to zero, where else would you get yield?” he said. “The search-for-yield theme is likely to go on for some time.”
  • NOTE: Indonesia 10-year sovereign bonds offer ~7.3% yield, while India is at ~6.8%, the two highest in Asia Pacific. Clinton has a narrow edge over Trump in polls, according to a released by Real Clear Politics
• Foo expects the current low-rate environment to continue at least for the next 12 months amid continued stimulus from BOJ and ECB
• Yuan weakness could be over for the rest of 2016; the currency may stabilize and even strengthen next year should there be a rebound in China’s growth and a further push back on Fed’s rate hike trajectory
  • NOTE: Yuan is Asia’s worst-performing currency this year, with CNY down ~3.9% against USD. It may fall to 6.8 by year-end, according to an Oct. 21 week Bloomberg survey. USD/CNY traded at 6.7540 on Friday
• Says China’s bonds may stand a better chance of inclusion in global benchmark indexes, such as Citi’s World Government Bond Index, if the nation further loosens capital control and increases yuan-trading flexibility
  • An inclusion in such indexes could lead to sizable inflows from funds tracking benchmarks
• Foo manages Asian bond portfolios investing in Asian USD credits and local-currency debt