HALISTER1: INSIDE ASIA: Won Rebounds From Scandal Loss; Caixin Shows Growth

INSIDE ASIA: Won Rebounds From Scandal Loss; Caixin Shows Growth

(Bloomberg) -- Won rebounds from losses sustained yesterday from the influence-peddling scandal involving South Korean President Park. Asian currencies broadly gains.
  • Won had dropped on political risks, which tend to abate quickly and trade back to fundamentals, says Stephen Innes, Oanda senior Asia Pacific FX trader. Asia currencies are likely to consolidate between now and U.S. election
    • Latest ABC/WaPo tracking poll shows Clinton tying with Trump while Fed said yesterday the case for a rate hike continues to strengthen
    • Australia 10-year govt. bond drops 3bps to 2.314%, while most other sovereign debt in region little changed. Japan is closed for a holiday
  • Won surges as much as 0.9%, after falling as much as 1.1% yesterday
    • President Park yesterday nominated a new PM and FM to deflect criticism. The government today introduced curbs in some property markets as concerns about housing debt increase
  • Aussie reverses gains to sink 0.3%
    • AUD/USD gains post-trade curbed by macro fund sales: trader
    • Home-price growth will slow in next 12-18 months, ANZ says
  • Yuan little changed after a three-day rally, as a private economic indicator continues to show expansion
    • Caixin China Oct. composite PMI rises to 52.9 from 51.4 in September, highest reading since March 2013
    • CNY should start to respond to election volatility in coming days; tighter U.S. monetary policy negative for yuan as Fed is expected to raise rates in December: Credit Agricole
    • PBOC may be switching to selective tightening to curb financial risks, according to economists
  • Investors should have neutral exposure to EM FX in run-up to U.S. election, Societe Generale head of EM FX strategy Jason Daw writes in note
    • Daw recommends short USD/IDR and long USD/TWD, as well as short MYR/IDR, short SGD/INR and long INR/KRW for relative value positive carry
  • Baht rises for second day
    • Uncertainties about U.S. presidential election, post- Brexit development and dollar gains on back of Fed rate hike are among factors to keep USD/THB elevated above 35 this year and into 2017, expects year-end at 35.20, Maybank Kim Eng said Nov. 2
    • October consumer confidence due at 10:30am local time; prior 74.2
  • Peso gains for third day
    • Bangko Sentral ng Pilipinas Governor Tetangco said yesterday there’s no strong reason to adjust policy now
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Stephen Innes (OANDA Corp)
Amando Tetangco (Bangko Sentral ng Pilipinas)
Jason Daw (Societe Generale SA)

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