Halister News

(Bloomberg) -- Taiwan’s dollar declines on the week and RBS cuts its 2016 growth and currency forecasts on concern over the export sector. Govt bonds find support from long-term investors further out the curve.

• RBS lowered its 2016 growth forecast for Taiwan to 0.6% from 0.9%, economist Vaninder Singh writes in a note today
  • Recovery remains jittery for the export-driven economy
  • Export outlook remains a concern amid slowing global consumer demand, especially in Asia
  • Expect CBC to cut policy rate twice by 12.5 bps each at end-3Q and 4Q respectively, to 1.125% by year-end
  • TWD to weaken to 31.8 vs USD by yr-end; makes a good funding currency given its negative carry and lower volatility
• Bond investors have adjusted positions ahead of Yellen’s speech tonight; expect market direction to be clearer next week, Sinopac Securities trader Ivor Su says
  • Market would price in more chance for Sept rate hike if U.S. GDP is revised higher today
  • Local bond market is supported as banks and life insurance companies buy long-term bonds
  • 10-yr govt yield to trade within 0.63%-0.67% next week, 5-yr yield in 0.48%-0.52% range
• TWD little changed at 31.672 per dollar, down 0.2% on week
• Yield of 1.125% govt bond maturing July 2036 declines 1 bp today to 1.02%; yield of benchmark 10-yr bond little changed at 0.638%