Halister News

(Bloomberg) -- Kiwi rallies as RBNZ disappoints investors with a 25 bps cut, leaving Governor Wheeler defending his decision not to slash further. China’s central bank raises yuan reference rate by the most since before Brexit, one year after a shock devaluation roiled markets.

• Kiwi surges as much as 1.9%, with RBNZ’s Wheeler saying even if the central bank had cut rates by 50 bps, the market would still want more
  • Wheeler says in briefing that RBNZ hasn’t run out of ammunition, but the central bank doesn’t want to join a race to the bottom
  • RBNZ’s use of the phrase “easing will be required” is a powerful signal, and a Sept. rate cut is more likely than the market expects: Imre Speizer, markets strategist at Westpac
• New Zealand 10-year bond yield drops 2 bps to 2.153%, same tenor yield in Australia falls 2 bps to 1.855%
• Yuan gains on one-yr anniversary of FX reform, with PBOC raising fixing by 0.4%, the most since June 23. Central bank yesterday said it wants to increase global use of currency
  • Stronger reference rate was largely based on spot price move yesterday from 4pm to 4.30pm local time: ANZ
  • PBOC intends to demonstrate RMB strengthen on anniversary of FX reform: Mizuho Bank. Yuan timeline here
  • Official bad-loan ratio held at 1.75% in 2Q, halting almost three years of increases, according to data yesterday
• Mixed Asian trading today, with ringgit leading decline
• Ringgit underperforming because of selloff in oil: Stuart Allsopp, head of financial market strategy at BMI Research
• Korean won pares losses after BOK Governor Lee says he’s not worried about herd behavior in the FX market though the central bank is closely monitoring speculative moves
  • Lee says BOK still has policy room after holding rates today
• Singapore dollar slips as country cuts the top end of its 2016 growth forecast, while central bank says monetary policy remains appropriate
  • Singapore’s 2Q GDP +0.3% q/q vs estimate +0.8%, while it narrows 2016 growth range to 1.0%-2.0% from 1.0%-3.0%
  • MAS may stay on hold in October, while easing “down the road” after October, says RBS economist Vaninder Singh
• Baht heads for first drop in four days
  • Govt asks state enterprises to accelerate spending in final three months of fiscal 2016, Deputy PM Somkid said yesterday
  • Data for 2Q suggest govt spending and tourist arrivals supported the economy, Goldman Sachs said Aug. 10
• Peso advances before BSP rate decision due today
  • Central bank is forecast to keep overnight borrowing rate unchanged at 3.00%, according to all 19 economists in Bloomberg survey