INSIDE ASIA: FX Mixed on Brexit Vote Clues; RBA, BOJ Minutes Out
Source: BFW (Bloomberg First Word)
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Fiona Lim (Malayan Banking Bhd)
Michael Every (Rabobank International)
Ryan Lam (Shanghai Commercial & Savings Bank Ltd/The)
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(Bloomberg) -- Asian currencies are mixed after yday’s broad rally; Korean won, Aussie and Malaysian ringgit are top gainers, while Japanese yen, kiwi and Indonesian rupiah decline.
Alert: HALISTER1- U.K. referendum on EU membership still looks close, with polls differing over which side leads; NOTE: What Brexit Would Mean for Asia’s Economies; QuickTake: Will Britain Leave EU?
- Fed’s Yellen due to begin two days of testimony to lawmakers in Washington
- Dollar Index down 0.08%, falling for fifth straight day
- Profit-taking in Asian FX after good rise yday, says Michael Every, head of financial markets research at Rabobank
- Japan 10-yr govt bond yield little changed at -0.14, Australian sovereign yields climb, China 10-yr yield up 2 bps to 2.965
- Yen in line to snap rally that has extended to 7 days thanks to late recovery yday; pressed toward 2016 high of 103.55/USD this morning before giving up gains
- Finance Minister Aso says govt won’t intervene in FX mkts without due consideration; yen has moved taking into account possibility of Brexit
- Nikkei 225 up 0.5% after falling as much as 1.2% earlier
- No reason for USD/JPY to drop toward key technical support at 100 ahead of Brexit vote; ytd low of 103.55 on June 16 could be good point to buy on dip or take profit on short USD/JPY: SMTB
- BOJ April meeting minutes released today show most board members agreed QQE with negative interest rate had already “produced its effects clearly” and that CPI is likely to accelerate toward target 2% y/y
- Aussie extends gains for third day, approaching level reached early last month just before RBA eased policy on May 3
- RBA minutes of June meeting, when it held interest rates at 1.75%, show central bank expects inflation to remain low; says recent economic data generally positive
- Aussie bought by fast money on consistent RBA tone: trader
- Banks’ holdings of govt bonds have risen to around 30% of mkt, RBA Assistant Governor Debelle says
- Won extends gains after rising 1.1% yday on greater appetite for risk; now at strongest since June 9; S. Korean ruling party calls for extra budget: Yonhap
- Ringgit is second-biggest gainer in Asia today, rising 0.3%, also to highest since June 9
- Yuan rises as PBOC strengthens CNY fixing for second day
- Investors are risk-on again with sentiment turning in favor of U.K. staying in EU, says Ryan Lam, head of research at Shanghai Commercial Bank; yuan depreciation still likely in 3Q as Fed rate-hike speculation picks up again
- No evidence currency basket is influencing yuan fixing, HKMA says; two significant factors are Dollar Index and CNH deviation from central parity
- Bloomberg synthetic RMB index drops 0.15% to 95.3996; PBOC taking opportunity for CNY to regain competitiveness vs regional peers, Maybank senior FX analyst Fiona Lim says
- PBOC says it has discussed onshore banks trading yuan offshore
- Rupiah’s four-day rally could end, with currency down 0.1% this morning; President Widodo tells ministers to defend sovereignty, maintain good relations with China
- Baht steady ahead of Bank of Thailand rate decision tomorrow
- 19 of 20 economists in Bloomberg survey expect BOT to hold at 1.50%; UBS expects cut to 1.25%
- Peso falls 0.1% but continues to consolidate above 50-DMA support; new ministers say Duterte’s administration will review tax perks and cut red tape
Source: BFW (Bloomberg First Word)
People
Fiona Lim (Malayan Banking Bhd)
Michael Every (Rabobank International)
Ryan Lam (Shanghai Commercial & Savings Bank Ltd/The)
To de-activate this alert, click here
UUID: 7947283