HALISTER1: INSIDE ASIA: Won Sinks to Lead Drop as Trump Poll Spurs Risk-Off

INSIDE ASIA: Won Sinks to Lead Drop as Trump Poll Spurs Risk-Off

(Bloomberg) -- Won and Aussie lead decline in the region as a tracking poll showing a Trump lead in the U.S. election spurs a sell-off of emerging-market assets.
  • Betting odds have risen for Trump to win the presidential election, and fallen for Clinton to the lowest level since October 7, says Sue Trinh, head of Asia FX strategy at RBC Capital Markets. Markets are trading that as a risk-off move, with MXN bearing the brunt of it
  • Risk aversion is gaining traction led by a spike in USD/MXN as ex-Asia buy stops triggered, say traders. USD/MXN up 0.6% to 19.3112, breaching 19.2679 New York high
    • MSCI Asia Pacific index falls as much as 1.1%, most since Sept. 30. Heavy equities attracting leverage selling of spot USD/JPY, while AUD/USD is weighed by macro flows versus JPY and NZD. traders say
    • Risk-off spurs gains in bond prices, with Australia 10- year yield dropping 4bps to 2.343%. Yield in Korea falls 5bps to 1.682%
    • Trump’s pledge for trade protectionism is particularly negative for Asia’s export-driven economies, says Scotiabank Asia FX strategist Gao Qi
  • USD/JPY falls as much as 0.5% to 103.67, a second day of decline as investors sought safe-haven assets
    • USD/JPY may test the downside with next critical area at 103.50, says IG Markets. A break may lead toward 103
    • BOJ, which didn’t expand stimulus yesterday at its policy meeting, will probably maintain status quo unless yen surges, former board member Sayuri Shirai says on Bloomberg TV
    • AUD/JPY is being sold by hedge funds and banks, as Asian stock markets slide in the early session: FX traders
  • Won plunges as much as 1.1%, with concerns over the developing scandal involving President Park’s friend adding weight to decline
    • President Park nominated a new prime minister and finance minister as she seeks to stem the fallout from an influence-peddling scandal threatening her grip on power
    • Recent developments add to the economic uncertainty, which may anchor short-term bond yields as well as lead to a weaker won, says Hong sup Shin, head of fixed income at Truston Asset Management
    • North Korea said to be prepping to launch ballistic missile in next 24-72 hours, Fox News says
  • Southeast Asian currencies also decline
  • Kiwi jumps after better-than-expected 3Q N.Z. jobless rate
    • Kiwi surged through the overnight high and option selling at 0.7200 on release of solid 3Q employment data: trader
    • RBNZ 4Q survey of businesses’ 2-year ahead inflation expectations is due at 3pm Wellington
  • Onshore yuan gains after PBOC strengthens fixing by 0.3%
  • U.S. political situation will swing market more than U.S. data in next few days, NAB head of markets strategy Christy Tan says; market isn’t convinced dollar weakness will sustain; buy USD/Asia on dip
    • USD/CNH could retreat to 6.7618 level in near term as pair crosses below 10-DMA first time in almost one month: Chart
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Qi Gao (Bank of Nova Scotia Asia Ltd/Singapore)
Sue Trinh (Royal Bank of Canada)

Topics
Public Opinion Polls

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