HALISTER1: CORRECT: China Bonds Favored as Data Hint at Weaker Outlook: ANZ

CORRECT: China Bonds Favored as Data Hint at Weaker Outlook: ANZ

(Bloomberg) -- (Corrects second bullet to clarify cuts to interest rate and RRR unlikely in very near term) China economic data set to weaken further in 2H on industrial capacity cuts, favoring sovereign bond market, says David Qu, Shanghai-based markets economist at ANZ Bank China.
  • Weaker growth outlook and rise in corporate credit risks encourage flows to safe havens
  • Policy makers are unlikely to cut interest rates or RRR in very near term; PBOC says such stimulus is negative to yuan
  • ANZ forecasts full-year GDP growth of 6.5%
  • NOTE: July industrial output +6.0% y/y vs est. +6.2%; retail sales +10.2% vs est. +10.5%; fixed-asset investment +8.1% vs +8.9% est.
  • Yield on 2.74% govt bond due Aug. 2026 rises 2 bps to 2.710%
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Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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HALISTER1: INSIDE ASIA: Currencies Lower As China Data Miss Forecasts

INSIDE ASIA: Currencies Lower As China Data Miss Forecasts

(Bloomberg) -- Aussie, Chinese yuan and Singapore dollar lead Asian currencies lower after China economic data comes in lower than expected. Series of explosions at Thai resort towns over public holiday add to risk-off sentiment. Onshore baht indicated lower in holiday-thinned prices.
  • There’s underlying onshore demand for dollars which should see USD/CNY drift higher, Khoon Goh, head of Asia research at ANZ says
    • Korean won and Taiwan dollar weakness likely reflects exhaustion after a strong run this week
  • Korean and Taiwanese funds may send $55b overseas: BofAML
  • Both onshore and offshore yuan drop after PBOC weakens reference rate most since June 27 and July data miss ests.
    • China July industrial production +6.0% y/y vs est. +6.2%
    • July retail sales +10.2% y/y vs est. +10.5%
    • China’s economy is still in reasonable range despite slowdown in some economic data for July: National Bureau of Statistics
    • China may slow FX reforms in the second half as the latest economic data indicate more pressure on growth: Commerzbank
    • China’s balancing act in push toward full convertibility of yuan
    • ANZ favors China bonds as July data reaffirm weaker outlook
  • Aussie drops for second day against dollar
    • Australian corporates seen selling AUD/USD after release of worse-than-expected China industrial production data, according to an Asia-based FX trader
  • Thai baht onshore prices indicated 0.2% lower following a series of explosions in resort towns overnight and this morning
    • Local financial markets are closed for public holiday
    • 2 dead after explosions in Thailand’s Hua Hin, Surat Thani
    • Two bombs exploded in Patong, Phuket; no injuries
  • Kiwi rebounds from earlier PMI-induced losses after 2Q retail sales grow by the most in 9 years
    • New Zealand July business manufacturing at 55.8 vs revised June 57.6
    • RBNZ Assistant Governor McDermott signaled on late Thursday central bank likely to wait till Nov. for rate cut
    • RBNZ defers start date for new lending restrictions to Oct. 1
  • Yen erases early losses as markets reopen after holiday
    • Japanese bought net 891.8b yen ($8.7b) overseas debt last week
    • Three charts show why dollar hedging costs are rising in Japan
  • Singapore dollar drops for second day; little changed on week
  • Korean won steady
    • KRW’s strength will be sustained as risk sentiment prevails; ING note says; revises yr-end USD/KRW forecast to 1,055 from 1,080
  • Ringgit lower ahead of growth data
    • Malaysia’s 2Q GDP est. +4.0% y/y, lowest since at least 2011 vs 1Q +4.2%
  • Rupee 1-month forwards snap three-day gain
    • India’s June industrial production est. +1.6% y/y, highest since Feb., vs May +1.2%
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Khoon Goh (Australia & New Zealand Banking Group Ltd)

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HALISTER1: TOPLive Starts: Follow China's July Economic Data in Real Time

TOPLive Starts: Follow China's July Economic Data in Real Time

Alert: HALISTER1
Source: BN (Bloomberg News)

Tickers
NBSZ CH (National Bureau of Statistics of China)
PRCH CH (People's Republic of China)

People
Grace Ng (JPMorgan Chase & Co)
Michael Phelps (US Summer Olympic Team)
Tommy Xie (Oversea-Chinese Banking Corp Ltd)

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HALISTER1: China Bonds in Favor as July Data Reaffirm Weaker Outlook: ANZ

China Bonds in Favor as July Data Reaffirm Weaker Outlook: ANZ

(Bloomberg) -- China economic data set to weaken further in 2H on industrial capacity cuts, favoring sovereign bond market, says David Qu, Shanghai-based markets economist at ANZ Bank China.
  • Weaker growth outlook and rise in corporate credit risks encourage flows to safe havens
  • Policy makers are unlikely to cut interest rates or RRR; PBOC says such stimulus is negative to yuan
  • ANZ forecasts full-year GDP growth of 6.5%
  • NOTE: July industrial output +6.0% y/y vs est. +6.2%; retail sales +10.2% vs est. +10.5%; fixed-asset investment +8.1% vs +8.9% est.
  • Yield on 2.74% govt bond due Aug. 2026 rises 2 bps to 2.710%
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
David Qu (Australia & New Zealand Bank China Co Ltd)

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HALISTER1: Thai 2Q GDP Growth Data Could Pressure BOT and Baht: Analysis

Thai 2Q GDP Growth Data Could Pressure BOT and Baht: Analysis

(Bloomberg) -- Slowing growth in 2Q could pressure Thai central bank to ease rates further, and push the baht down, Bloomberg strategist Andrew Robinson writes.
  • Growth probably +3.2% y/y, same as 1Q, Bloomberg survey shows; ests. range 2.7%-3.9%
    • Data due 9:30am local time on Aug. 15
    • Top forecaster ranked by Bloomberg sees 2.7% y/y growth
  • Govt asked state enterprises to accelerate spending in final three months of fiscal 2016 ending Sept., Deputy PM Somkid Jatusripitak said on Aug. 10
  • Central bank last eased policy rate in April 2015, a surprise 25 bps cut to 1.50%; next meeting is Sept. 14; 2 of 11 economists predict a 25 bps cut to 1.25%; rest see unchanged
  • USD/THB up 0.1% at 34.810 today; could rise to 50-DMA of 35.084 near term if data disappoint
    • Williams %R turns bullish, crosses above oversold threshold to -72
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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HALISTER1: USD/THB Indicated Higher After Bombing in Southern Thailand

USD/THB Indicated Higher After Bombing in Southern Thailand

(Bloomberg) -- USD/THB onshore prices indicated 0.2% higher at 34.84 following news of another bomb attack in Thailand.
  • Thailand markets remain closed for a local holiday
  • Bomb attack kills one in Southern Thailand, AFP reports
  • Two bombs explode in Thai resort of Hua Hin, killing 1, injuring 19: BBC
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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