CIBC FX Flows: FXWW

From the FXWW Chatroom: North Korea’s missile launch this morning had no impact on Asia – UsdKrw was stable and Kospi flattish. Nikkei and UST yields advanced. It was only after the report that North Korea is to make an important announcement, UsdJpy lower and UST popped.

We saw it from yesterday, Japanese banks were better buyers of UsdJpy around this 111.20. Even the missile launch didn’t shake equity investors – Nikkei opened positive and UsdJpy tried to challenge the offers. Just a reminder, there are option strikes at 111.00 rolling off Wed-Fri total about $3bn. UsdJpy offers are mentioned scattered up to mid-111.70’s and there are some stops thereafter 111.80-85. Report from Yonhap News caused the UsdJpy to pull away from 111.60’s to 111.45.

Following FSR, RBNZ Governor Grant Spencer said the central bank will undertake a modest easing to LVR restriction. Spencer said this is not an attempt to bolster housing market. He spoke again at the Parliament Select Committee and reiterated that it is very unlikely housing market will tank. NzdUsd has drifted lower on UST yields, weak stops are rumoured to be under 0.6850.

Not much to pen for AudUsd, the pair also lower on UST yield play. I heard corporate bids are in the 0.7580’s. I will keep a watchful eye on UsdJpy, if the stops on top are taken out, this will likely take AudJpy along as well and I hear stops from systematic guys above 85.10.
Commodity prices still under pressure, earlier this morning, API report said US crude stocks up 1.82mio barrels last week and this could put pressure on the futures. OPEC meeting tomorrow in Vienna, market is having doubts over oil cut extension. Japanese were buyers of UsdCad into the Tokyo fix but ran into resistance above 1.2820. No economic data nor speakers today. Tomorrow, release of Q3 current account balance, we are expecting deficit to widen to Cad20.6bn from last quarter’s Cad16.3bn.

Asians

Korean composite index flattish and UsdKrw has been stable. Finance Minister Yoon told reporters that the government will take measure if it sees unusual movements. Onshore UsdKrw capped 1085 and into late morning, exporters sold Usd for their month end rebalancing, saw UsdKrw at 1082.5.

View the latest market information in the FXWW Chatroom with a free trial

Leave a Reply

Your email address will not be published.