Halister News

(Bloomberg) -- Most Asian currencies are little changed, with the better-than-expected U.S. goods data failing to spur the dollar ahead of Fed Chair Yellen’s speech today. Money-market rates decline for a second day in China.

• Market continues to pre-position for a potentially dovish Yellen, says Moh Siong Sim, currency strategist at Bank of Singapore
• 10-year Treasury yield heads for first decline in four days, down 1 bp to 1.561%
• China 7-day repo rate drops as much as 23 bps, with the overnight rate also declining as PBOC continues to inject liquidity through money-market operations after signaling concern about reliance on overnight lending
  • PBOC sold 145b yuan of reverse-repos today, and gauges demand for more sale next week
  • Liquidity in the interbank market is plentiful, PBOC’s Yi Gang says in Beijing. The 14-day reverse repo operations are giving the market more funding choices, he says
  • PBOC may not want to see too much overnight borrowing, accounting for about 90% of interbank lending, which has fueled leveraged purchases of assets including bonds: Nie Wen, economist at Huabao Trust
• Offshore yuan falls, underperforming regional peers
  • USD/CNH buying probably driven by flows from some companies buying HKD/CNH, Ken Cheung, Asian FX strategist at Mizuho Bank says
  • If CNY doesn’t strengthen after Yellen’s speech, which will probably just signal all policy meetings are live, it may indicate Chinese government’s bias to depreciate yuan: NAB Asia head of markets strategy Christy Tan
• Yen set for first weekly drop in five
  • CPI excluding fresh food, fell 0.5% vs est. drop of 0.4%
  • While CPI will probably continue to weaken, BOJ is unlikely to deliver additional easing in September, though it risks failing to meet 2% inflation target: Hajime Inoue, economist at Japan Research Institute.
  • USD/JPY options indicate that Yellen’s speech and next week’s U.S. payroll data may be non-events, as prices suggest relatively low-event risks compared with recent occasions. See analysis here
• Won gains for second day as August consumer confidence index rises 102, the highest since Dec.
  • South Korean Finance Minister Yoo Il Ho says nation will be able to achieve 2.8% GDP growth this year as expected, Yonhap Infomax reports
• Aussie and kiwi advance
  • CBA sees the risks skewed in favor of a higher AUD/USD later tonight, anticipates Yellen’s speech will be perceived as dovish, according to note today
• Most Southeast Asian currencies including baht and peso little changed
  • Thailand’s July exports fall 4.4% y/y vs est. -2.2%
  • INR, KRW and PHP are now rich vs REER averages, while MYR is cheapest currency in the region, Standard Chartered Bank wrote Aug. 25 note; remains positioned long MYR vs SGD
  • Bank Indonesia said yesterday it still sees room to continue easing while inflation may be below 3.5% y/y at end-2016