Halister News

(Bloomberg) -- South Korea’s won leads the advance as most Asian currencies post small gains vs dollar after U.S. ISM factory index unexpectedly fell into contractionary territory, damping speculation of Fed rate increase this month.

• NOTE: U.S. Aug. non-farm payrolls are due tonight; Bloomberg median est. +180k (prior 255k)
• A U.S. jobs number above 180k may spur speculation of a more hawkish Fed at its Sept. meeting and leading to a firm USD in coming weeks, says Khoon Goh, head of Asia research at ANZ says
• China raises yuan reference rate for a second day ahead of G-20 summit, which starts Sunday in Hangzhou; 10-yr sovereign bond yield up 4 bps on week as PBOC easing bets are pared slightly
  • Avg daily turnover in yuan trading has doubled since 2013 to $202b, making it the most-traded EM currency, reports BIS
  • PBOC’s Yi says China is studying SDR-based financial products; also says nation has “policy toolbox” to keep yuan stable
• Vice Finance Minister Zhu says QE is no longer effective and won’t create sustainable growth
• Yen heading for second weekly decline against dollar
  • Japanese GDP shrank 0.3% in July, Nikkei reported yesterday
  • Now that BOJ owns 34% of JGBs, brokerages are betting its next step will be to boost its 6% stake in corporate bonds
  • S&P yesterday affirmed Japan’s A+ rating, outlook remains stable
• Ringgit bucks regional advances as WTI crude heads for biggest weekly decline since Jan.
  • Malaysia’s 5-year govt bond yields could be more influenced this month by a tilt in U.S. rates than domestic data, even with a BNM decision due on Sept. 7; see chart
• Won gains as data showed Korea’s 2Q GDP WAS revised upward to 0.8% q/q vs initial reading 0.7%
  • Option desks are shorting USD/KRW in front of large 1,120 strikes expiring today, according to an Asia-based FX trader
  • Vice Finance Minister Choi said yesterday excessive FX volatility or herd behavior can have hurt economy
• Singapore’s dollar little changed before release of Aug. PMI, which is forecast to rise to 49.4 for first advance since April
  • Singapore wages continue to outpace GDP growth; chart here
• MAS is making it easier for homeowners to refinance mortgages as some struggle with payments while the economy cools
• Kiwi gains for third day against dollar as data show New Zealand’s 2Q construction work rose 5.5% q/q vs est. 2.0%
  • Nation’s foreign exchange market handled $10.6b a day in April, down from $12.4b three years ago
• Peso rises as Bangko Sentral ng Pilipinas says it’s unsure the time is right to reduce the reserve requirement
  • Govt plans to seek lawmakers’ approval in first half of President Duterte’s 6-yr term for tax reform packages that would help it achieve target of boosting revenue by 3% of GDP by 2019