HALISTER1: INSIDE TAIWAN: TWD Falls; RBS Cuts 2016 GDP, Currency Forecasts

INSIDE TAIWAN: TWD Falls; RBS Cuts 2016 GDP, Currency Forecasts

(Bloomberg) -- Taiwan’s dollar declines on the week and RBS cuts its 2016 growth and currency forecasts on concern over the export sector. Govt bonds find support from long-term investors further out the curve.
  • RBS lowered its 2016 growth forecast for Taiwan to 0.6% from 0.9%, economist Vaninder Singh writes in a note today
    • Recovery remains jittery for the export-driven economy
    • Export outlook remains a concern amid slowing global consumer demand, especially in Asia
    • Expect CBC to cut policy rate twice by 12.5 bps each at end-3Q and 4Q respectively, to 1.125% by year-end
    • TWD to weaken to 31.8 vs USD by yr-end; makes a good funding currency given its negative carry and lower volatility
  • Bond investors have adjusted positions ahead of Yellen’s speech tonight; expect market direction to be clearer next week, Sinopac Securities trader Ivor Su says
    • Market would price in more chance for Sept rate hike if U.S. GDP is revised higher today
    • Local bond market is supported as banks and life insurance companies buy long-term bonds
    • 10-yr govt yield to trade within 0.63%-0.67% next week, 5-yr yield in 0.48%-0.52% range
  • TWD little changed at 31.672 per dollar, down 0.2% on week
  • Yield of 1.125% govt bond maturing July 2036 declines 1 bp today to 1.02%; yield of benchmark 10-yr bond little changed at 0.638%
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Vaninder Singh (Royal Bank of Scotland Group PLC)

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HALISTER1: INDIA RATINGS: NKG Infrastructure Cut; National Bulk Raised

INDIA RATINGS: NKG Infrastructure Cut; National Bulk 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
  • NKG Infrastructure
    • Long-term loan facilities cut to BBB- from BBB+ at Crisil
    • Cites issuance of a non-bailable warrant by the special court of Central Bureau of Investigation against Managing Director Pradeep Garg
    • Calls to the company’s phone went unanswered, while CBI spokeswoman Devpreet Singh could not be reached immediately
UPGRADES
  • National Bulk Handling
    • LT bank facilities raised to A+ from A at Care
    • Cites improvement in financial and operational performance
  • Swati Industries
    • LT loan facilities raised to BB from BB- at Crisil
    • Expects improvement in firm’s financial risk profile
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
NKG IN (NKG Infrastructure Ltd)
FTECH IN (Financial Technologies India Ltd)

People
Pradeep Garg (NKG Infrastructure Ltd)

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HALISTER1: INSIDE ASIA: Currencies Trade Within Range Ahead of Yellen

INSIDE ASIA: Currencies Trade Within Range Ahead of Yellen

(Bloomberg) -- Most Asian currencies are little changed, with the better-than-expected U.S. goods data failing to spur the dollar ahead of Fed Chair Yellen’s speech today. Money-market rates decline for a second day in China.
  • Market continues to pre-position for a potentially dovish Yellen, says Moh Siong Sim, currency strategist at Bank of Singapore
  • 10-year Treasury yield heads for first decline in four days, down 1 bp to 1.561%
  • China 7-day repo rate drops as much as 23 bps, with the overnight rate also declining as PBOC continues to inject liquidity through money-market operations after signaling concern about reliance on overnight lending
    • PBOC sold 145b yuan of reverse-repos today, and gauges demand for more sale next week
    • Liquidity in the interbank market is plentiful, PBOC’s Yi Gang says in Beijing. The 14-day reverse repo operations are giving the market more funding choices, he says
    • PBOC may not want to see too much overnight borrowing, accounting for about 90% of interbank lending, which has fueled leveraged purchases of assets including bonds: Nie Wen, economist at Huabao Trust
  • Offshore yuan falls, underperforming regional peers
    • USD/CNH buying probably driven by flows from some companies buying HKD/CNH, Ken Cheung, Asian FX strategist at Mizuho Bank says
    • If CNY doesn’t strengthen after Yellen’s speech, which will probably just signal all policy meetings are live, it may indicate Chinese government’s bias to depreciate yuan: NAB Asia head of markets strategy Christy Tan
  • Yen set for first weekly drop in five
    • CPI excluding fresh food, fell 0.5% vs est. drop of 0.4%
    • While CPI will probably continue to weaken, BOJ is unlikely to deliver additional easing in September, though it risks failing to meet 2% inflation target: Hajime Inoue, economist at Japan Research Institute.
    • USD/JPY options indicate that Yellen’s speech and next week’s U.S. payroll data may be non-events, as prices suggest relatively low-event risks compared with recent occasions. See analysis here
  • Won gains for second day as August consumer confidence index rises 102, the highest since Dec.
    • South Korean Finance Minister Yoo Il Ho says nation will be able to achieve 2.8% GDP growth this year as expected, Yonhap Infomax reports
  • Aussie and kiwi advance
    • CBA sees the risks skewed in favor of a higher AUD/USD later tonight, anticipates Yellen’s speech will be perceived as dovish, according to note today
  • Most Southeast Asian currencies including baht and peso little changed
    • Thailand’s July exports fall 4.4% y/y vs est. -2.2%
    • INR, KRW and PHP are now rich vs REER averages, while MYR is cheapest currency in the region, Standard Chartered Bank wrote Aug. 25 note; remains positioned long MYR vs SGD
    • Bank Indonesia said yesterday it still sees room to continue easing while inflation may be below 3.5% y/y at end-2016
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Moh Sim (ING Groep NV)
Ken Cheung (Mizuho Financial Group Inc)

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(2) *METTLER-TOLEDO TO REPLACE JOHNSON CONTROLS IN S&P 500

*METTLER-TOLEDO TO REPLACE JOHNSON CONTROLS IN S&P 500

Alerts: HALISTER, HALISTER1
Source: BN (Bloomberg News)

Tickers
JCI US (Johnson Controls Inc)
MTD US (Mettler-Toledo International Inc)
MPWR US (Monolithic Power Systems Inc)
WCIC US (WCI Communities Inc)

People
David Blitzer (Standard & Poor's Financial Services LLC)

Topics
S&P 500 Stock Market Moves

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HALISTER1: FinCEN Seeks to Expand Anti-Money Laundering Rules to More Banks

FinCEN Seeks to Expand Anti-Money Laundering Rules to More Banks

(Bloomberg) -- Financial Crimes Enforcement Network proposing “to require banks lacking a federal functional regulator to establish and implement anti-money laundering programs,” FinCEN says in statement.
  • Also proposing to extend certain customer identification and beneficial ownership requirements to banks not already subject to them
  • FinCEN says would apply to ~740 banks
  • Link to notice of proposed rulemaking
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Topics
Proposed Rules

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