Halister News

(Bloomberg) -- Onshore yuan extends decline while offshore yuan fluctuates; most other currencies in region fall, led by Malaysian ringgit and kiwi, as market digests failed coup attempt in Turkey.

• Asian investors are more cautious having previously ignored geopolitical risk, ANZ head of FX research Khoon Goh says; weakness in most Asian currencies also follows better-than- expected U.S. retail sales
  • Yen giving back some risk-off driven gains made during attempted coup; NOTE: Japanese mkts closed for holiday today; Thailand also closed
• U.S. retail sales rose 0.6% m/m in June vs 0.1% est. and revised 0.2% in May; CPI rose 1.0% y/y, same as previous month
• NZD drops as 2Q CPI comes in lower than ests., +0.4% y/y vs +0.5% forecast; probability of RBNZ rate cut in Aug. at 67%
  • RBNZ should cut rates from 2.25% to 2.00% next month and perhaps to 1.75% by yr-end: Capital Economics
  • Central bank will release economic assessment on July 21
  • Australian 10-yr govt. bond yield rises 4 bps to 2.008%, first time above 2% since July 4; Aussie dollar rises
• Onshore yuan at 6.6993 vs USD, lowest since Nov. 1, 2010
  • PBOC weakens fixing for first time in four trading days
  • China home sales rose in June at slowest pace this year, while new home prices increased in 55 cities vs 60 in May
  • Offshore yuan moves higher after a brief drop around 11am; FX traders in North Asia say USD/CNH selling accelerated in tandem with USD/CNY sell orders near 6.700
  • Growing signs that PBOC is intervening in FX mkt as USD/CNY approaches 6.7 psychological level, Cebm Group managing director Zhong Zhengsheng and analyst Zhang Lu write in a Sunday note
  • CFETS RMB Index rose last week for first time since May, suggesting PBOC may have intervened to curb bearish speculation on the yuan: Commerzbank
  • Chinese cos. appear to have fallen into “liquidity trap” as the gap between China’s M2 and M1 growth increases: National Business Daily, citing PBOC statistics head
  • China says it will hold military exercises in South China Sea on July 19-21
• Ringgit slides most this month
  • Malaysia’s second-largest pension fund expects lower returns this year and plans to buy more bonds with maturities of 10 years or more to hedge against further interest-rate cuts
  • 1MDB debt to be slowly retired: New Straits Times, citing second finance minister
  • Headline inflation may fall to around 1.7% y/y in June from 2.0% in May, Goldman Sachs wrote in July 15 note; data due July 20; median est. is +1.8%
• Won snapping 3-day rally
  • Overseas investors bought $9.16b more USD/KRW NDFs in 2Q than they sold, following net purchases of $14.86b in 1Q: BOK statement on July 17
• Rupiah heads for second daily decline
  • ING expects BI to deliver two 25-bp rate cuts by yr-end, according to note today; reviewing yr-end USD/INR est. of 13,400 for downward revision; FX pair now at 13,100
• Philippine peso edges lower after 3-day rally; central bank to tighten rules for FX, remittance companies: Inquirer, citing Deputy Governor Espenilla