CIBC FX Flows: FXWW

From the FXWW Chatroom: RBNZ decision to keep official cash rate at 1.75% wasn’t a surprise. However, RBNZ also pushed out its forecast for rate increase, this knocked the NZDUSD, from 0.6978 to 0.6944, AUDNZD popped to 1.0747. At the press conference, Governor Orr said the Bank can keep OCR where it is for considerable period of time. Orr then reiterated on rates, he said it seems their message on rates is getting through market. NZD weakened to 0.6916 and at 1.0797 versus the Aussie.
AUDUSD has been rather stable while NZDUSD soft. Offers heard ahead of 0.7480 and corporate bids surrounding 0.7410. Do note, there is a AUD740mio of 0.7500 option strike maturing today and larger next week, totalling AUD3.71bn.
Oil futures continue to trend, earlier newswires reported exchange of missiles between Israel and Syria. Correlation between USDCAD and WTI rather strong, the pair touch lower, small bids along the way to 1.2800, nothing really special. Market will be watching key data tomorrow, April’s labour report.
USDJPY advanced but unable to take on 110.00, some offers belong to 110 strikes maturing in coming week. The weak UST yields saw USD being sold and we should see some buying near 109.50 area.
EUR and GBP both higher, but nothing interesting to pen about.
Asians

Some sacrifices were made to save the country and they did. History is made at the Malaysia GE14, former PM Dr Mahathir’s party PH won 113 seats out of 222. Dr Mahathir came out of retirement to challenge his protégé Najib Razak. Bank Negara announced markets will be shut on May 10-11, stock exchanged closed. Najib will hold a press conference at 11.00 am later.
Bank Negara will hold its scheduled policy meeting as planned today.
This is from our NDF trader YT: Looking forward, there are certainly risks ahead for a new ruling party and how Najib bow out given controversy how he misappropriated state fund in 1MDB. Mahathir has openly criticised China FDI in Malaysia and his relationship with their close neighbour Singapore are not that warm when he was PM. The high speed rail project between Singapore-KL might be put back to the drawing board.
IMHO, Dr M won on two things, GST issue and corruption. He reiterated that the new government will uphold the rule of law. We saw the comments from Moody’s and there is some uncertainty. Real money accounts tried to rush in to buy NDF, kept the 1s supported despite USD backing off. This is short term pain for the MYR but for a long term gain.
With Malaysia out and poor liquidity in the MYR NDF, some jumped into buying USDSGD as proxy. As a result, USDSGD jumped from 1.3456 to 1.3490. I heard authorities has called on local banks. USDSGD later back off to 1.3455, it was a pure USD move in line with UST yields.

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