Halister News

(Bloomberg) -- Asian currencies mixed in subdue trading with Malaysia’s ringgit and Korea’s won gaining after overnight weakness in dollar, while Singapore’s dollar and China’s yuan drop as sentiment remains fragile.

• Positive Chinese economy data show signs of fading, and this will likely have a negative impact on EM currencies, Tommy Xie at OCBC Bank says in interview
  • Market sentiment and muted BOJ set to increase upward pressure on yen in coming weeks: Xie
• Onshore and offshore yuan both decline even after PBOC strengthens yuan fixing by most in 2 wks; spread between on- and offshore yuan narrows
  • China’s economy faces downward pressure while it remains resilient, the official Xinhua News Agency reports, citing Vice Premier Zhang Gaoli
• Yen drops against dollar; BOJ governor Kuroda says desirable for FX to move in stable manner and reflect economic fundamentals; adds that finance minister is responsible for Japan’s FX policy
  • One BOJ member said risks are tilted to downside and bank should bolster easing measures without hesitation if judged necessary: summary of April policy meeting
  • Japan’s current account widened to 2.98t yen ($27.45b) in March, most since 2007; est. was 2.97t yen
• U.S. Treasuries little changed, with yield on 10-year bonds at 1.726% in Asian trading; initial jobless claims for week ended May 7 est. 270k vs prior week’s 274k
• Ringgit advances as IPIC pays 1MDB’s bond interest and the Malaysian govt pledges to fulfill its debt obligations
  • March industrial production data, est. 3.0% y/y, most since Dec.
  • 5-yr interest-rate swaps may extend losses toward levels last seen in late 2013 if 1Q is confirmed as weakest quarter since 2010 (see analysis here)
• Peso gains ahead of BSP policy meeting today, where central bank will maintain overnight borrowing rate at 4.00%, according to 14 out of 15 economists; one sees a 50 bps cut to 3.50%; see analysis here
• Rupee 1-month forwards halt two-day gain; March industrial production est. 2.5% y/y, most since Oct.
  • April CPI est. 5.05% y/y vs March’s 4.83%