Halister News

(Bloomberg) -- China’s yuan led gains in emerging Asian currencies amid speculation of central bank intervention and a decline in the dollar. Other emerging currencies were mixed before Federal Reserve Chair Janet Yellen speaks in London. The MSCI EM Asia Index of shares fell. Chinese Premier Li Keqiang said the economy maintained steady growth in the second quarter, and China will be able to keep expanding in a reasonable range. “Recent monetary tightening in China should support the yuan,” says Masashi Murata, a currency strategist at Brown Brothers Harriman in Tokyo. “Li’s comment on China meeting growth goals also might support the yuan.” CHINA:

• Offshore yuan jumps 0.6%, onshore yuan rises 0.4%
• At least two big Chinese banks were seen selling dollars against the yuan onshore, according to two traders who asked not to be identified
  • Some traders in North Asia said they were only seeing flows from leveraged and bank accounts
• 10-year government bonds gain, Shanghai Composite Index rises 0.2%
• PBOC weakens yuan daily reference rate by 0.11% to 6.8292 per dollar, least since May 31
  • Skips open market operations for third day
• Aberdeen Asset Management is waiting for a bigger correction in longer-dated China onshore bonds before adding positions, according to Edmund Goh, a fixed-income investment manager
• Both short- and long-ends of China’s onshore bond curve are attractive, according to Freddy Wong, a portfolio manager at Fidelity
• May industrial profits rise 16.7%, vs 14% in April

SOUTH KOREA:

• Won little changed after dropping as much as 0.2%
• KOSPI share index gains 0.1%
• “Won is long-biased today due to exporters’ selling dollars ahead of the quarter end,” says Seung Ji Jeon, currency analyst at Samsung Futures
  • “All eyes are on Yellen’s comments tonight and the wait-and-see mood is giving support to USD/KRW around the 100-DMA”
• Despite rising approval ratings, President Moon’s fiscal stimulus package has so far gone nowhere in parliament, underscoring the challenges he faces in enacting his economic agenda without a majority
• 10-year bond yield falls 1bp to 2.12%

INDIA

• Rupee gains a second day as foreign funds buy Indian stocks and bonds; S&P BSE Sensex retreats 0.7%
• Demand for local assets is supporting the rupee, says Anindya Banerjee, associate vice president for currencies derivatives at Kotak Securities
  • Currency “would have appreciated much more” if not for the RBI’s dollar purchases aimed at boosting FX reserves, he says
  • Reserves rose $799m to $382b in the week to June 16
• Overseas holdings of Indian govt and corporate debt rose for a 22nd day on Friday, longest stretch in NSDL-compiled Bloomberg data going back to 2011
• Foreign funds bought net $78.9m rupees of local stocks on June 22, taking total inflows for the month to $333.4m
• Yield on 6.79% bonds due May 2027 drops 1bp to 6.46%

TAIWAN:

• Taiwan dollar, TAIEX Index of shares both little changed
• Economy will expand 2.25% in 2Q, according to Bloomberg survey of 28 economists conducted from June 19 to June 26
• UBS raises year-end Taiex forecast to 10,600 from 9,850
  • Strength in liquidity due to equity inflows from abroad and optimism for next iPhone means stock market may rise in short term, analyst William Dong writes in note

THAILAND:

• Baht gains with SET Index
  • Overseas investors sold net 79m baht ($2.3m) of local bonds Monday, first net outflow since June 16, according to TBMA data
  • Sold net $19.8m of local equities, taking sales this month to $167.6m: exchange data
• BOT will probably hold policy rate at 1.5% on July 5, Tim Leelahaphan, Thailand economist in Bangkok at Maybank Kim Eng Securities, wrote in Monday note
  • Negative real interest rates may force BOT to increase the policy rate before year-end
• Yield on 2.125% govt bond due December falls 2bps to 2.374%

PHILIPPINES:

• Philippine peso drops 0.1% as markets reopen after Monday’s holiday
• USD/PHP rises to 50.30, trades in 50.185 to 50.30 range
• Investors are undeterred by clashes between govt troops and IS-linked militants in Marawi city and declaration of martial law in Mindanao, Trade Secretary Ramon Lopez says
• ATR Asset Management says Philippines has a “very good story” as benefits from President Duterte’s economic program are shaping up
• Lower inflation view of Bangko Sentral ng Pilipinas seem to suggest higher probability of no change in monetary policy this year, according to note from Bank of Tokyo-Mitsubishi UFJ

RESEARCH:

• Goldman Sachs Asset Management is taking a more conservative view on emerging-market currencies as momentum seems to be easing for global growth outlook, positions look stretched and commodity prices have weakened, according to June 23 report received Tuesday

Above are market moves and news from emerging Asian economies. For Australia, please see Inside Australia. For Japan, see Inside Japan. To contact the reporter on this story: Subhadip Sircar in Mumbai at ssircar3@bloomberg.net To contact the editors responsible for this story: Tan Hwee Ann at hatan@bloomberg.net Nicholas Reynolds