Halister News

(Bloomberg) -- USD/MYR could extend this week’s decline if September trade surplus exceeds one-year average, as forecast by economists, Bloomberg strategist Mark Cranfield writes.

• Pair is trading below trend line drawn from Oct. 13 high at 4.2242, with MACD falling toward zero line; chart here
• Trade data due 12pm on Nov. 4
• Median est. in Bloomberg survey sees surplus rising to 8.90b ringgit from 8.51b in August; 12-month avg is 7.69b ringgit; click here for trend
• USD/MYR down 0.1% at 4.1835
• NOTE: Mark Cranfield is an FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.

--DAVID WHITEHOUSE

(Bloomberg) -- A plunge in USD/JPY after a Fox News report on Clinton shakes a sleepy market that had an eye on the climax of baseball’s World Series. GBP likely in focus as three judges publish decision on whether PM May can begin Britain’s exit from EU without permission from Parliament; QuickTake Q&A here.

• FOMC statement largely as expected, likely to raise rates in December, strategists and economists say; roundup here
• USD/JPY -0.52% to 102.76 vs 102.55-103.44 range
• Japanese importers may have missed golden opportunity to cover hedging as bids were canceled due to Thursday’s Japan holiday but will be reinstated at Tokyo open Friday: trader
• Treasury 10-year futures up 6+ ticks to 130-07+
• BBDXY -0.2% to 1,199.71; gold up 0.6%
• GBP/USD +0.2% to 1.2331 vs 1.2298-1.2341 range
• Asia-based FX traders note a buildup of buy-stops above 1.2354 overnight high ahead of U.K. court decision. Some fund clients have either canceled or are watching their own short positions until London opens
• Irish PM Kenny warned May that Brexit talks may prove “quite vicious”
• AUD/USD +0.05% to 0.7665 vs 0.7637-0.7683 range
• Rally in wake of Australia’s better-than-expected Sept. trade data tempered by macro funds whose offers above 0.7670 were partially filled: trader
• NOTE: Mark Cranfield is an FX strategist who writes for First Word. The observations he makes are his own and are not intended as investment advice.

(Bloomberg) -- Here’s a roundup of Indian co. debt-rating changes.

• To get this story sent to your inbox real-time, run NI INRATINGS , click on Display & Edit, then Set Alert Delivery

DOWNGRADES

• Bhilwara Green Energy
  • Subordinated non-convertible debentures cut to BBB- from BBB at Care
  • Cites stressed liquidity position due to delay in receivables and a low balance in its debt service reserve account
• JJ Realtech
  • Long-term rating cut to B+ from BB+ at Crisil
  • Cites delay in construction and lower-than-expected customer advances

UPGRADES

• Allahabad Bypass Pathways
  • Long-term bank facilities raised to BBB+ (SO) from BBB (SO) at Care
  • Cites corporate guarantee from Prakash Asphaltings and Toll Highways
• Sri Raghavendra Ferro Alloys
  • Long-term rating raised to B+ from B at Crisil
  • Cites improvement in liquidity, backed by higher cash accruals and lower dependence on bank limits

(Bloomberg) -- UBS Asset Management steps up investments in Thai bonds as year-long mourning period for late King Bhumibol Adulyadej may damp Thailand’s economic recovery and boost chances of a BOT rate cut.

• A rebound in yields, with 10-year sovereign rising above 2.1% from this year’s low of 1.513% in April, also enhances appeal of local debt securities, Ashley Perrott, Singapore- based head of Asian fixed-income at UBS Asset, said in an interview on Wednesday
• “We increased exposure in bonds a little bit slightly after the King’s news,” Perrott says
• Slow business activity would be supportive for “potential easing of the policies for the Bank of Thailand”
• BOT is expected to maintain policy rate for rest of 2016 to assess the economy, says Perrott, who oversees about $3.5b
  • BOT has room to cut rates if necessary to boost the economy
• NOTE: Prime Minister Prayuth called on the nation to avoid “joyful events” for 30 days and observe a year of mourning following King Bhumibol Adulyadej’s death on Oct. 13.
• NOTE: BOT may keep policy rate unchanged at 1.50% on Nov. 9, according to all 10 economists in Bloomberg survey

(Bloomberg) -- Won rebounds from losses sustained yesterday from the influence-peddling scandal involving South Korean President Park. Asian currencies broadly gains.

• Won had dropped on political risks, which tend to abate quickly and trade back to fundamentals, says Stephen Innes, Oanda senior Asia Pacific FX trader. Asia currencies are likely to consolidate between now and U.S. election
  • Latest ABC/WaPo tracking poll shows Clinton tying with Trump while Fed said yesterday the case for a rate hike continues to strengthen
  • Australia 10-year govt. bond drops 3bps to 2.314%, while most other sovereign debt in region little changed. Japan is closed for a holiday
• Won surges as much as 0.9%, after falling as much as 1.1% yesterday
  • President Park yesterday nominated a new PM and FM to deflect criticism. The government today introduced curbs in some property markets as concerns about housing debt increase
• Aussie reverses gains to sink 0.3%
  • AUD/USD gains post-trade curbed by macro fund sales: trader
  • Home-price growth will slow in next 12-18 months, ANZ says
• Yuan little changed after a three-day rally, as a private economic indicator continues to show expansion
  • Caixin China Oct. composite PMI rises to 52.9 from 51.4 in September, highest reading since March 2013
  • CNY should start to respond to election volatility in coming days; tighter U.S. monetary policy negative for yuan as Fed is expected to raise rates in December: Credit Agricole
  • PBOC may be switching to selective tightening to curb financial risks, according to economists
• Investors should have neutral exposure to EM FX in run-up to U.S. election, Societe Generale head of EM FX strategy Jason Daw writes in note
  • Daw recommends short USD/IDR and long USD/TWD, as well as short MYR/IDR, short SGD/INR and long INR/KRW for relative value positive carry
• Baht rises for second day
  • Uncertainties about U.S. presidential election, post- Brexit development and dollar gains on back of Fed rate hike are among factors to keep USD/THB elevated above 35 this year and into 2017, expects year-end at 35.20, Maybank Kim Eng said Nov. 2
  • October consumer confidence due at 10:30am local time; prior 74.2
• Peso gains for third day
  • Bangko Sentral ng Pilipinas Governor Tetangco said yesterday there’s no strong reason to adjust policy now

(Bloomberg) -- USD/PHP may decline to 50-DMA if Philippines’ October CPI rises more than economists estimate and brings forward expectations of central bank tightening, Bloomberg strategist Andrew Robinson writes.

• USD/PHP down 0.1% at 48.345 today; 50-DMA is at 47.744, pair has not traded below that level since Sept. 8
  • Slow stochastics are bearish with %K line falling to 63, on verge of crossing below %D line
• Consumer prices probably rose 2.3% y/y, unchanged from Sept., median est. in Bloomberg survey shows; ests. range from 2.1% to 2.5%; data due Nov. 4 at 9am local time
• BSP will watch for economic and financial developments that could affect inflation, BSP Governor Tetangco said last week; expects Oct. CPI to be 1.9% to 2.7%
• Economists currently do not expect central bank to start raising rates until 1Q 2017, another Bloomberg survey shows
• NOTE: Andrew Robinson is an FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice

(Bloomberg) -- China may see targeted tightening in overheated sectors though broad-based tightening isn’t likely as economic growth isn’t very strong, Societe Generale Asia ex-Japan head of rates strategy Frances Cheung says.

• PBOC to keep liquidity supported
  • Near-term yield curve lacks steepening momentum, because soft economic outlook prevents mid to long end rates from rising too rapidly
• Directionality has not been very strong in CNY rates market
  • Even when rates rise, the curve does not tend to steepen a lot
• Expects CNY IRS curve to steepen on a 6-12 month horizon
  • Local govt bonds supply likely to continue concentrating on 5-year and beyond, may add price pressure to long-end
  • Upcoming external rate hike would indirectly transmit to China bonds as well, which will lift long-end yields