Halister News

(Bloomberg) -- Asian currencies are mixed with Fed official Brainard’s remarks on a slower pace of rate increase bolstering the yen. Most markets in Southeast Asia reopen lower after a public holiday yesterday.

• Brainard urges “prudence” and says no rush to raise rates in a speech in Chicago on Monday
• Yen rallies for second day, while 10-year govt bonds set to snap three-day drop
  • USD/JPY falls on dovish Brainard comments, while risk- off sentiment is weighing on cross-yen trade, says Koichi Takamatsu, Tokyo-based head of G10 spot trading at Nomura Securities. USD/JPY may continue to hold 101 hurdle on demand from domestic investors before BOJ next week
  • Spread between 10-year and 30-year JGB yields may have further to widen as investors consider the possibility of BOJ reducing purchases of bonds maturing beyond 25 years at next week’s policy meeting: Charts
• Interest-rate swaps and govt bond yields fall in China after PBOC sells 28-day reverse repos for first time since February
  • PBOC wants to inject longer-term funding to guide leverage lower in bond market, says Industrial Securities FI analysts Tang Yue. Chinese central bank doesn’t plan to tighten liquidity, & injection suggests it isn’t planning a RRR cut
  • Says sale of 28-day reverse repos at 2.55% is lower than expected
• Onshore yuan steady as economic data released this morning largely meets expectations
  • Industrial output gained 6.3% in Aug. y/y vs est. +6.2%; retail sales climbed 10.6% against forecast +10.2%
  • Jan.-Aug. fixed-asset investment excluding rural households up 8.1% y/y vs est. +7.9%; Jan.-Aug. property investment rose 5.4% y/y
• HKMA said late yesterday it provided yuan liquidity supports to banks after CNH interbank rate rose. 3-mo. CNH Hibor jumped most since Feburary yesterday
  • Lower CNH short-term rates and forwards today driven by HKMA’s liquidity injection yesterday, according to FX traders in North Asia
  • Nation’s fiscal deficit at 429.3b yuan ($64.3b) in Aug.
• Aussie weakens by 0.3%
  • RBA Assistant Governor Kent says inflation target has achieved goals, is flexible; also says Aussie hasn’t dropped as much as expected in recent years
  • Aug. business confidence increased 2 pts m/m to 6
  • Opposition party agrees to A$6.3b in budget savings
• Won poised to snap three-day loss, with South Korea saying N. Korea nuke impact on markets is limited so far
  • Aug. unemployment rate at 3.8%, highest in 5 mos., vs est. 3.6%
  • South Korea suspended operations of four nuclear reactors and some factories for safety checks after earthquakes jolted the country Monday
• Singapore, Indonesia, Malaysia and Philippines reopen after holiday yesterday, when rest of Asian currencies had dipped. India is closed today.
• Peso slips, set for longest stretch of decline since Jan. 15
  • President Duterte wants U.S. special forces to leave southern island of Mindanao; Secretary of Foreign Affairs Yasay says to ABS-CBN News Channel today that Philippines will honor treaties with other nations, no shift in relations with the U.S.
  • HSBC reiterated its constructive view on peso given planned reforms and infrastructure expenditure that should attract inflows, according to Sept. 12 note; forecasts USD/PHP at 46.20 at year-end and at 45.50 by end-2017
• Ringgit touches lowest level in more than 2 months as local markets return from long weekend, and oil declines to trade near $46 a barrel; USD/MYR moving toward 200-DMA at 4.1037
  • Malaysia plans to spend about $1b over the next five years to refurbish and expand its airports