Halister News

(Bloomberg) -- Asian currencies are broadly lower, led by KRW and MYR, ahead of key BOJ and FOMC rate decisions this week while China central bank cuts yuan reference rate to the lowest level almost in one month. Australia and NZ markets are closed.

• Talks that BOJ may be deliberating on negative rates in lending facilities to domestic banks sent Asian currencies into a tail spin, Stephen Innes, senior trader at OANDA Asia Pacific says in interview
  • Market is betting BOJ will come out with bazooka stimulus package
  • USD/Asia basket also weighed by expectations Fed may backtrack slightly previous comment on global growth concerns, which may increase expectations for a June hike
  • USD/JPY paring previous gains because of lower oil prices and absence of official confirmation that BOJ will go into negative lending rate
• Yen rebounds after dropping on April 22 by most since Oct. 2014; 30-year bond yield gains 8 bps to 0.410%
  • Profit-taking may weigh on USD/JPY and cross-yen today in the wake of sharp rally on Friday, Naoto Ono, Tokyo- based analyst at Ueda Harlow, writes in note today
  • Pairs may still find support from buy-on-dips flow ahead of BOJ meeting this week
  • Negative rates drive Japanese life insurers to take greater risks
• China yuan drops after PBOC sets reference rate at lowest since March 28, while 1-year IRS jump 8 bps to 2.6425%, highest since June 24
  • Downward pressure on spot yuan would likely be substantial if RMB Index slips below 97.00, Tommy Xie, economist at OCBC, says in interview today; estimates index at 97.31 today after PBOC’s yuan fixing
  • China’s earliest economic data show recovery gathers pace in April
• Korea won extends decline as Kospi starts the week on a soft note, in line with rest of regional equities
  • Goldman Sachs raises 1Q GDP growth forecast to 0.4% q/q seasonally adjusted vs 0.3% previously, in light of Feb. rebound in IP, according to note on April 22
  • Data tomorrow will show preliminary GDP rose 2.7% y/y in 1Q, least since 2Q 2015: Bloomberg survey
• Malaysia ringgit slides for third day on lower stocks and oil prices and ahead of Fed meeting this week
  • PM Najib may name new central bank governor this week, New Straits Times reports, without saying where it got information from
• Indonesia Rupiah falls for a third day
  • Yield on 5.25% govt bond due May 2018 dropped 10 bps on April 22, most since April 11, to 6.992%: IDMA data
• Thailand baht weakens, poised for third day of decline
  • Data later today may show customs exports fell 4.8% y/y in March, after a 10.27% gain in Feb., according to median est. of Bloomberg survey
  • Exports probably expanded 4.1% y/y in March on improving commodity prices, Standard Chartered writes in note today; says stronger exports probably kept March trade surplus at $4.18b