Halister News

(Bloomberg) -- Aussie drops to session low after S&P lowers Australia’s rating outlook to negative from stable, before trimming losses. Most Asian currencies are steady to firmer after June FOMC minutes signal less urgency for Fed rate rises amid uncertain U.S. job mkt.

• Asian FX consolidates recent sharp drops, because overnight FOMC minutes were quite dovish on Fed policy, says Gao Qi, FX strategist at Scotiabank
• 10-year bonds yield from Japan to Australia hover near record lows; U.S. 10-year Treasury yield steady at 1.3615%
• Aussie selling led by leveraged investors after S&P lowers the rating outlook, according to an Asia-based FX trader; pair’s decline was trimmed on bids from intraday accounts
  • S&P explains that decision to lower Australia’s outlook to negative, reflects view that without implementation of more forceful fiscal policy decisions, material govt budget deficits may persist for several years with little improvement
  • Analysts see limited impact on AUD as demand for yields and lack of clear outperformer in FX market may cushion impact; see Research Roundup
• Yuan gains first time in six days after PBOC lifts fixing, and CFETS
  • PBOC extends reserve requirement on offshore banks trading FX forwards in China; decision aimed at raising cost of yuan selling and to curb excessive speculation on yuan depreciation through cross border arbitrage, Gao Qi of Scotiabank says
  • Yuan’s decline vs USD and trade-weighted basket “makes a mockery” of PBOC’s suggestion that its policy is to keep currency stable: CapEcon
  • CFETS said late yday that yuan will remain stable against its basket of currencies and there will continue to be 2-way moves based on mkt demand and supply
  • June FX reserves data due today; median est. in Bloomberg survey is $3.167t vs $3.192t in May
  • PREVIEW: China reserves may fall again as Brexit takes toll
• Yen gains for third day
  • BOJ Governor Haruhiko Kuroda said Japan’s CPI is likely to be slightly negative for the time being
  • Prime Minister Abe’s adviser Fujii says a 20t yen stimulus package could bring about 2% inflation
  • Westpac recommends selling USD/JPY at 103.30, with stop- loss at 104.40, according to note today
• Won leads gains among Asian currencies, halting a 3-day drop as Kospi index rises, following an overnight advance in U.S. stocks
  • Govt to hold meeting on to boost investment and trade, releases relevant policy measures at 12:30pm local time
  • Nomura cut CPI inflation forecast to 0.8% from 1.0% for 2016, and to 1.0% from 2.0% for 2017, well below the BOK’s 2% inflation target, according to note yesterday
• Most southeast Asian currencies including SGD and THB gain
  • Natixis expects Monetary Authority of Singapore to recenter SGD NEER band lower at or before Oct. policy announcement, according to July 6 note
  • Bank of Thailand is going to cut benchmark rate by 25bps to 1.25% at Sept. 14 policy meeting to provide more support to growth, HSBC writes in client note received today