HALISTER1: INSIDE ASIA: Region’s Currencies Mixed After U.S., China Data

INSIDE ASIA: Region’s Currencies Mixed After U.S., China Data

(Bloomberg) -- Asian currencies are mixed, partly in response to U.S. data, with Malaysia’s ringgit among gainers and China’s onshore yuan and Japan’s yen declining.
  • U.S. non-farm payrolls rose less-than-expected 160,000 in April, but there were improvements in wage growth, hours worked and U-6 unemployment
    • New York Fed president William Dudley says in NYT interview it remains a “reasonable expectation” for two rate hikes this year
  • China data over weekend showed exports fell 1.8% y/y in April vs. est. 0.0% and 11.5% increase in March; imports dropped 10.9% vs. -4.0% est. and -7.6% in March
  • Some Asian FX seeing temporary relief, partly driven by U.S. NFPs and stable China trade data, Maybank FX analyst Christopher Wong says
    • China raises yuan reference rate for first time since last Tuesday; strengthens by 0.15% to 6.5105
    • USD/CNH sold after yuan fixed at low end of range: traders
    • FX reserves rose to $3.22t in April, highest in three months, vs. median est. $3.20t, data on weekend showed
    • PBOC reaffirms yuan will be kept basically stable and at reasonable level
  • Aussie rises as eight-week federal election campaign begins, with early polls showing mixed results; ruling coalition leads Labor by 51% to 49% in Fairfax/Ipsos poll: AFR
    • A$1.27b worth of AUD/USD options expiring today at 0.7400; buying by large Asian macro account brings option-related sell orders into play, Asia-based FX trader says
    • RBA rate cut last week may encourage traders to unwind carry trades further, rising volatility makes them less attractive, Maybank’s Wong says
  • Yen falls against dollar; Japan’s consumer confidence index seen falling to 40.7 in April from 41.7 in March, according to median est. in Bloomberg survey; data due at 2pm Tokyo time
    • Some BOJ board members believe negative interest-rate policy has created excessive expectations for more easing, according to minutes from March meeting
  • Ringgit gains as oil prices rise on wildfires in Canada and after Saudi Arabia replaces Oil Minister Ali Al-Naimi with close ally of the deputy crown prince
    • 1MDB starts U.S. dollar bondholder outreach, engagement process
  • Taiwan’s dollar snaps three-day drop; data today should show island’s exports dropped 8.3% y/y in April, smallest decline since May: Bloomberg survey
  • Indonesia’s central bank sets lowest fixing in more than five weeks after two-day holiday at end of last week
  • Markets in Philippines closed for presidential election
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Ali Al-Naimi (Kingdom of Saudi Arabia)
Christopher Wong (Malayan Banking Bhd)

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