Halister News

(Bloomberg) -- Taiwan dollar rises most in over 3 weeks as foreign investors resume buying of local equities after U.S. jobs data failed to strengthen Fed rate hike expectation.

• TWD rises 0.6%, most since Aug 10, to 31.506 vs dollar after declining for 3 consecutive weeks
  • Overseas investors bought net TWD8.2b ($259.7m) local shares, most since Aug. 5; Taiex closes 1.14% higher, most since July 11, at 9090.13
• Foreign capital inflows driving local currency and stock mkt up, traders say
  • But mkt somewhat subdued as overseas investors not selling USD in large amounts
• Aug. CPI is due 8:30am Tuesday; est 1% y/y vs 1.23% in July
• Low inflation gives CBC leeway to continue easing rates, BBH currency strategists led by Marc Chandler write in note today
  • Expect another 12.5 bps cut to 1.25% at next CBC quarterly policy meeting this month
  • Aug. exports likely decline 0.5% y/y and imports down 4.8% y/y: BBH
  • NOTE: Taiwan Aug. trade data due 4pm Sept. 7; exports est. to grow 0.2% y/y vs prev. 1.2% while imports may fall 4.5% y/y vs prev. -0.2%, according to Bloomberg survey
• Market pricing suggests CBC could cut rate in Sept, Jih Sun Securities bond trader Kevin Shih says
  • Yield of 10-yr govt bond may trade within 0.66%-0.697% this week while for the month of Sept., the yield may range between 30-day and 90-day moving averages
• Yield of 10-yr govt note falls 1 bp to 0.6790%
• CBC sells TWD$160b ($5.07b) 364-day debt at an average interest rate of 0.342%, vs record low 0.338% in Aug.