Halister News

(Bloomberg) -- Aussie drops over 1% after RBA slashes its inflation target to 1-2% this year from 2-3% forecast in Feb. PBOC’s yuan fixing falls most this week in nearly 4 months.

• Most Asian currencies are steady ahead of U.S. jobs data
• RBA forecasts core inflation is unlikely to reach the bottom of its target this year and will probably only do so in the ensuing two years as the developed world’s disinflation quandary spreads
• Aussie drops following RBA statement and amid broader dollar strength this week, Kay Van Peterson, Global Macro Strategist at Saxo Capital Markets in Singapore says in interview;
  • Sees “pure technical bounce” in DXY after big retraction in previous week
  • Dollar still in liquidation period, at least for coming weeks or so before Brexit referendum in June
• AUD falls 1.11% vs. dollar to 0.7382, lowest since March 4
  • Macro funds joined leveraged accounts in selling AUD aggressively through 0.7450 on release of RBA monetary policy statement, according to an Asia-based FX trader
  • AUD/USD decline stalling just below 0.74 on bids from option desks, traders say
• Aussie 3-year bond futures rise as much as 13 ticks to 98.450, highest on record while 3-yr yield reaches all-time low of 1.567% on RBA statement
• Yuan steady at 6.5061
  • PBOC sets reference rate weaker for third day, down 0.11% to 6.5202; fixing lowered by 0.95% this week, most since week ending Jan. 10
  • PBOC may be gauging market sentiment on yuan by weakening the currency through daily fixing: BBVA
  • Foreign reserves probably dipped in April, and the pace of decline may accelerate from the second half as expectations for a Fed hike bolster the dollar, analysts say before May 7 data; see a preview
  • Median est. in Bloomberg survey is an $8.6b drop to $3.204t in April from the prior month
• Yen gains ahead of U.S. non-farm payrolls data
  • FX market remains short USD and continues to cover these positions ahead of U.S. jobs data tonight, says Keisuke Hino, NY-based trader at Mizuho Bank in an interview
  • 108 level may not be easy for USD/JPY to breach, as there seem to be offers waiting there: Hino
  • PM Abe said Thursday he is ready to respond to excessive currency moves if needed and he may raise the issue of FX volatility at G-7 meeting in Japan later this month
• Ringgit poised for a fifth day of decline in longest-losing streak since Nov. 2
  • Trade data due today; March exports est. -1.0% y/y vs 6.7% in Feb.; trade surplus est. 7.1b ringgit vs prev. 7.35b ringgit
  • USD/MYR may resume its downtrend from mid-Jan. if trade balance matches forecast (see analysis here)
• Won falls for a second day
  • BOK should keep policy rate steady in May if governor Lee gets his way, but he’s still under pressure to cut and will have to convince at least three of four new MPC members, Bank of Tokyo-Mitsubishi UFJ writes in note today