HALISTER1: INSIDE ASIA: Ringgit, Baht Lead Declines as Dollar Holds Gains

INSIDE ASIA: Ringgit, Baht Lead Declines as Dollar Holds Gains

(Bloomberg) -- Most emerging Asia currencies weaken as a gauge of the dollar held gains from Wednesday on increased bets the Fed will raise interest rates this year.
  • Futures traders are pricing in a 62% chance the Fed will lift rates by year-end; odds were 50% at end of last week
  • Bloomberg Dollar Index steady after rising 0.4% yesterday
  • Scotiabank FX analyst Qi Gao says near-term risk appetite supporting EM Asian currencies could fade from May ahead of FOMC and Brexit referendum
  • Ringgit and baht biggest losers among Asian currencies today, both down 0.6%
  • Ringgit heads for first loss in three days; Scotiabank’s Qi says decline likely due to falling A-share market; also points to ECB meeting this evening; Shanghai Composite down 0.4% after sliding 2.3% yesterday, most in nearly two months
    • Malaysia sells $1.5b of 10-year, 30-year global sukuk; deal was oversubscribed by 4.2 times and drew interest from investor base of over 195 accounts, according to Finance Ministry
  • Baht set to snap four-day rally; Bank of Thailand is ready to stabilize financial markets if baht movements affect real economy, senior director Vachira Arromdee says yesterday; adds currency’s strength in line with peers
  • Both onshore and offshore yuan head for second day of losses; China’s central bank may keep main interest rate on hold until fourth quarter, according to an April 15-20 survey of 56 economists’ by Bloomberg
    • Yuan reference rate lowered for first time this week, down 0.35% to 6.4803
    • Investor George Soros says China’s debt-fueled economy resembles the U.S. in 2007-08 and March credit figures should be seen as a warning sign; capital outflows from the country spurred by anti-corruption campaign making people nervous; also says China and U.S. are cooperating on currency
    • China’s economic recovery masks financial risks: Fitch
  • Japan’s 10-year government bond falls for the first time since April 13 ahead of auction of 20-year notes; Tokyo USD/JPY desk net short of dollars above 110, trader says
    • About 80% of companies oppose Bank of Japan lowering negative rate further: Reuters
    • BOJ says loan demand from households rises, companies’ demand falls
    • LDP’s Yamamoto calls for 20t-yen JGB issue to aid disaster recovery and economy
    • Japanese bought net 844.7b yen overseas debt last week
  • Kiwi declines versus dollar for a second day; JPMorgan predicts Reserve Bank of New Zealand will cut benchmark rate to 2% next week; Capital Economics says RBNZ will cut cash rate to 1.75% in third quarter
    • ANZ New Zealand consumer confidence index rose to 120.0 in April from 118.0 in March
  • Aussie steady following decline yesterday; NAB first-quarter business confidence reading declined to 4 from revised 5 in previous quarter; March RBA foreign exchange transactions at A$954m versus A$476m in February
  • U.S. Treasuries advance; yield on 10-year bonds declines 1 bp to 1.836%; data today may show initial jobless claims in U.S. increased to 265,000 in week through April 16 from 253,000 prior week: Bloomberg survey
  • Won advances for third day; unprecedented difficulties facing South Korea include prolonged slowdown in major economies and global divergence in monetary policies, Bank of Korea Governor Lee says at inauguration of new board members
    • BOK’s labor union says nomination process for policy board members isn’t free from government influence and that monetary policy should be performed independently
  • Rupiah weakens for the first time in three days; Bank Indonesia is likely to keep reference rate unchanged at 6.75% today, according to 23 of 26 economists surveyed by Bloomberg, with the rest seeing a cut to 6.50%
    • Central bank will today announce 7-day reverse repo rate, which will become benchmark rate in August; please see “Decision Guide” here
  • Peso declines; analysts regard Senator Grace Poe and former Interior Secretary Mar Roxas as best to run Philippine economy, Bloomberg survey shows
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Grace Poe (Republic of the Philippines)
Qi Gao (Bank of Nova Scotia/The)
Vachira Arromdee (Bank of Thailand)

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