HALISTER1: INSIDE ASIA: Most EM Currencies Drop as USD Stabilizes; RBA Due

INSIDE ASIA: Most EM Currencies Drop as USD Stabilizes; RBA Due

(Bloomberg) -- Most Asian EM currencies weaken as the Bloomberg Dollar Index stabilizes after a U.S. public holiday yesterday. Aussie set for longest stretch of advance since March before RBA rate decision today.
  • Markets are pricing in Fed rate hike this year, regardless of whether it will be in Sept. or Dec. and this is providing underlying support for the dollar, says Kyosuke Suzuki, head of FX and money market sales at Societe Generale
    • Fed will boost rates in Dec. when political risks are fading; if it refrains from raising rates in Sept., the market will see risk-on sentiment with investors selectively searching for higher yields in EM
  • Aussie extends gain following a narrower-than-est. current account deficit; 2Q shortfall at A$15.5b vs est. A$20b deficit
    • Aussie gains on current account data, but pauses at option strike: trader
    • 2Q net exports -0.2% pt of GDP vs est. flat; net exports data is a key component of 2Q GDP due Wednesday
    • RBA is likely to keep policy rate unchanged today at 1.50%, according to economists surveyed by Bloomberg
    • A series of AUD/USD triple tops near 0.7750 may be revisited by end-Sept if 3Q GDP beats estimates and new RBA governor Philip Lowe fails to jawbone Aussie lower in response: analysis
  • Kiwi advances for fifth day ahead of milk auction later
    • New Zealand house-price inflation accelerates for a fifth month in Aug.
  • Yuan slips even as China strengthens fixing by most since Aug. 17
    • USD/CNH spiked higher on broad-based buying coinciding with end of China’s G-20 meeting, with large Chinese banks selling into the move, according to FX traders in North Asia
    • Sudden spike in USD/CNY, USD/CNH earlier suggests Chinese central bank may be starting to loosen some control over the yuan mkts now that G-20 meeting is over, Iris Pang, senior economist of Greater China at Natixis says
    • China is studying expanding use of Special Drawing Rights to facilitate SDR-denominated financial products, PBOC deputy governor Yi Gang says
    • Investors likely to keep testing 6.7000 level for one or two more days as Fed speeches scheduled this week may be hawkish, says Ryan Lam, head of research at Shanghai Commercial Bank
    • China faces pressure to further cut RRR this yr, Nomura says
  • Yen pares losses after PM Abe’s adviser Hamada says BOJ should wait for Fed before acting
    • Hamada’s comments eases speculation of further monetary easing by BOJ in Sept., Shinichi Takasaka, chief manager for forex and financial products trading at Mitsubishi UFJ Trust and Banking says
    • USD/JPY consolidating in 103-104 range for now: Societe Generale
    • 30-year govt bonds set to snap 9-day drop
    • Auction of 30-year bonds drew stronger demand, with cut- off price surpassing est. and bid-to-cover ratio rising from previous offering
    • Sovereign 30-year yields are rising at a pace that suggests an outcome that could mirror the carnage of 2013
  • Ringgit declines ahead of BNM rate decision this week
    • Speculation of rate cuts by BNM intensifying, with fixed income market pricing in a rate cut within next 6 mos., DBS Bank analysts including Eugene Leow, fixed income strategist write in note today
  • Peso weakens
    • There appears to be no strong need to change monetary policy stance, BSP Governor Tetangco says
    • Consumer prices increased 1.8% y/y in Aug. vs est. +2.0%
    • Govt has set its budget deficit target for next yr at 478b pesos ($10.3b) before widening to 777b pesos in 2022, Budget Secretary Diokno says; optimistic tax reforms in place as early as year-end
  • Taiwan dollar appreciates for a third day
    • Aug. consumer prices rose 0.57% y/y vs est. 1% gain
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
40005Z AU (Reserve Bank of Australia)

People
Eugene Leow (DBS Group Holdings Ltd)
Iris Pang (Natixis SA)
Kyosuke Suzuki (Societe Generale SA)
Philip Lowe (Reserve Bank of Australia)
Ryan Lam (Shanghai Commercial & Savings Bank Ltd/The)

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UUID: 7947283

HALISTER1: INSIDE G-10: Aussie Climbs Ahead of RBA Decision; Yen Whipsaws

INSIDE G-10: Aussie Climbs Ahead of RBA Decision; Yen Whipsaws

(Bloomberg) -- Aussie leads G-10 gains versus dollar amid expectations the RBA will hold its benchmark rate; kiwi also rising on bets for a strong dairy auction later today.
  • AUD/USD touches 0.7632, strongest since Aug. 26, ahead of RBA Gov. Stevens’s final central-bank meeting; Aussie also supported by a 2Q current-account deficit that came in smaller than forecast
  • USD/JPY whips around, caught between early yen-cross buying and selling after Abe’s adviser Hamada said BOJ should wait for Fed decision before making any move itself
    • JGB 10-year yields are in focus as they are poised to move out of negative-yield territory for first time in 6 months
  • BBDXY index falling for second day, down 0.05% to 1,181.52
  • NZD/USD holding above 0.7300 as investors prepare for dairy auction; whole milk powder futures are trading close to 11- month highs
  • 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.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283

HALISTER1: Taiwan Exports Miss Could Halt USD/TWD Forwards’ Slide: Analysis

Taiwan Exports Miss Could Halt USD/TWD Forwards’ Slide: Analysis

(Bloomberg) -- A contraction, in Taiwan’s exports in August could trigger a reversal in USD/TWD 1-month NDF’s near-term direction, Bloomberg strategist Andrew Robinson writes.
  • Exports probably rose 0.2% y/y after 1.2% growth in July, median est. in Bloomberg survey shows; ests. range from -7.7% to +2.3%; data due 4pm local time on Wednesday
    • Related data may show imports fell 4.5% y/y last month and trade surplus widened to $4.17b from $3.61b: other surveys
  • NDF could retrace back to 50-DMA, currently at 31.758; forward has not traded above this moving avg since June 28
    • 1-mo. NDF is holding above 31.175 level, which is 61.8% Fibonacci retracement of the rally from Aug. 10 to 22
  • NDF now little changed at 31.292 after touching 31.223, lowest since Aug. 18
  • 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
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283

HALISTER1: INDIA RATINGS: Dehradun Highways Cut; Nuberg Raised

INDIA RATINGS: Dehradun Highways Cut; Nuberg Raised

(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
  • Dehradun Highways Project
    • Long-term bank facilities cut to D from B+ at Care
    • Cites delays in debt servicing
  • Hitro Energy Solutions
    • LT rating cut to B- from B at Crisil
    • Cites decline in FY16 business performance
  • Sumesh Engineers
    • LT rating cut to B from B+ at Crisil
    • Cites deterioration in business risk profile
UPGRADES
  • Future Financial
    • Pass-through certificates raised to AA+(SO) from A+(SO) at ICRA
    • Cites good collection performance on underlying pools and enhanced credit enhancement cover for rated securities
  • Nuberg Engineering
    • LT rating raised to BBB from BBB- at Crisil
    • Cites improvement in company’s business profile and liquidity
  • Shivalik Power & Steel
    • LT rating raised to BBB- from BB+ at Care
    • Cites improvement in performance of group company Shivalik Engineering
  • Songwon Specialty Chemicals
    • LT rating raised to BBB- from BB- at Crisil
    • Cites better-than-expected improvement in company’s business risk profile
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
SMT IN (Apis India Ltd)
FDLC IN (Fedders Lloyd Corp Ltd)
0885126D IN (Piramal Finance Pvt Ltd)

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HALISTER1: Malaysia Central Bank Rate Cut Speculation Intensifying: DBS

Malaysia Central Bank Rate Cut Speculation Intensifying: DBS

(Bloomberg) -- Speculation of rate cuts by BNM intensifying, with fixed income market pricing in a rate cut within next 6 mos., DBS Bank analysts including Eugene Leow, fixed income strategist write in note today
  • MYR 3y-10y swap rates shifting lower by around 100 bps since late 2015 to levels comparable seen in 2013, before the taper tantrum
  • Decline in headline inflation to 1.1% in July probably exacerbated fall in swap rates
  • Combination of easing emerging market stress, rebound in oil prices and receding political noise also helped drive MYR interest rates lower
  • BNM holds policy meeting on Sept. 7 and is expected to keep benchmark rate unchanged at 3.0%, according to 13 of 16 economists in Bloomberg survey; 3 predict 25 bps rate cut to 2.75%
  • NOTE: Citigroup sys there’s risk for another BNM rate cut due to falling loan demand
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Eugene Leow (DBS Group Holdings Ltd)

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HALISTER1: Aussie May Revisit Triple Top at 0.7750 on GDP, Lowe: Analysis

Aussie May Revisit Triple Top at 0.7750 on GDP, Lowe: Analysis

(Bloomberg) -- A series of AUD/USD triple tops near 0.7750 may be revisited by end-Sept if 3Q GDP beats estimates and new RBA governor Philip Lowe fails to jawbone Aussie lower in response, writes Bloomberg strategist, Michael G Wilson.
  • Spot has formed a solid base off 0.7490 100-DMA, which is also August 31 low
    • Triple tops comprise of 0.7756/50/49 highs in Aug.
    • Slow stochastic momentum indicator at 34 and climbing
    • AUD/USD currently +0.20% at 0.7597
  • 3Q GDP probably gained 3.2% y/y vs. prev. 3.1%, according to median est. of 29 economists surveyed by Bloomberg; ests. ranged from 3.0% to 3.5%; data due tomorrow at 11:30am local
  • Incoming RBA Governor Lowe will deliver introductory remarks on Thursday
    • In March 2016, Lowe said “I think, like everyone, we would welcome a slightly lower exchange rate” to help with rebalancing of economy; AUD/USD was trading at 0.7455 back then
    • When asked in Dec. 2012 about threshold for unconventional monetary policy, Lowe said hypothetically it would be ’around 1 percent, plus or minus a bit,’; policy rate then was double the current 1.5%
  • A GDP data beat may push any chance of an RBA cut into 2Q17
  • Fed pricing in wake of NFP has been dialed back; likewise, a host of forecasters who’d called for a September Fed hike
    • See Research Roundup
  • NOTE: Michael Wilson is an FX strategist who writes for First Word. The observations he makes are his own.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Philip Lowe (Reserve Bank of Australia)

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UUID: 7947283

HALISTER1: Business Insider: A prominent journalist was charged with money laundering after protesting Maduro in Venezuela

Business Insider: A prominent journalist was charged with money laundering after protesting Maduro in Venezuela

Alert: HALISTER1
Source: BLG (Blogs Web Content)

People
Nicolas Maduro Moros (Bolivarian Republic of Venezuela)
Hugo Chavez Frias (Bolivarian Republic of Venezuela)

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UUID: 7947283

HALISTER: Bayer Says Prepared to Offer $127.50/Shr For Monsanto

Bayer Says Prepared to Offer $127.50/Shr For Monsanto

(Bloomberg) -- Confirms advanced talks with Monsanto concerning deal; Bayer says offer would only be in connection with an agreed deal.
  • Offer would be ~19% premium to last Monsanto traded close: Bloomberg calculation
    • Monsanto shrs last traded at $107.44
  • No assurance parties will enter pact
Statement Related:
  • Aug. 24: Bayer, Monsanto Said to Move Closer to Deal as Talks Advance
Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
BAYN GR (Bayer AG)
MON US (Monsanto Co)

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UUID: 7947283