HALISTER1: INSIDE ASIA: Kiwi Jumps as RBNZ Says No Need for Rapid Easing

INSIDE ASIA: Kiwi Jumps as RBNZ Says No Need for Rapid Easing

(Bloomberg) -- New Zealand dollar surges after RBNZ said there’s no need for a series of rapid rate cuts. The Korean won lead gains among regional currencies as the greenback retreats ahead of Fed Chair Yellen’s speech on Friday.
  • Kiwi gains as much as 0.8%, snapping a two-day loss after RBNZ Governor Wheeler said the outlook and balance of risks don’t warrant “a position of rapid easing” though he does intend to cut rates further to stoke inflation
    • N.Z. financial institutions face higher risks given strong growth in home prices and private-sector credit growth, according to S&P Global Ratings
  • Bloomberg dollar index slips, halting a two-day advance
  • USD/JPY was sold on bets Yellen will be noncommittal in speech, according to Asia-based FX traders
  • Yen gains for first time in three days, with BOJ Governor Kuroda scheduled to speak at a conference today
    • Nikkei manufacturing PMI for August came in at 49.6, highest reading since Feb., though a sixth month of contraction
    • Investors will be looking to see if Kuroda today gives more indication about easing, NAB writes in note
  • New Zealand 10-year govt. bond yield drops 3 bps to 2.295%, same tenor sovereign bond yield in Japan falls 2 bps to -0.075%; yield on 2.74% China govt bond due Aug. 2026 rises 1 bp to 2.7%
  • Won gains most in a week. BBH notes that global liquidity backdrop has turned supportive for EM in recent weeks
    • Won’t be surprised to see periodic FX intervention after Korean officials expressed concern about won strength: BBH
  • Yuan mildly firmer in both onshore and offshore markets
    • Chinese authorities may curb excessive move ahead of G-20 summit, Bank of East Asia FX strategist Kenix Lai says
  • Ringgit drops for third day as oil tumbled 3% last night, the most in 3 weeks
    • July CPI data due tomorrow, with est. at 1.1% y/y, lowest since March 2015
    • If CPI remains weak, CIMB maintains short-term target for 10-year MGS at 3.42%, according to note on Aug. 22
  • Rupiah continues a three-day losing streak
    • Bank Indonesia’s survey in third week of Aug. show consumer prices fell 0.06% m/m, Kompas reported yday, citing Governor Agus Martowardojo
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Agus Martowardojo (Bank Indonesia)
Kenix Lai (Bank of East Asia Ltd/The)

To de-activate this alert, click here

UUID: 7947283