Asia Open - Overnight Highlights

EMERGING ASIA

EM currencies are trading mostly individually against the greenback as the tariff bombs are only dropped in the late session. The biggest losers are KRW 1.33%, followed by THB 0.4%, MYR 0.13%, CNH 0.1%, CNY 0.07%, IDR 0.05% and HKD 0.01%; while the largest winners is SGD by 0.22%, followed by INR 0.11% and PHP 0.01%.

USD/CNH is trading higher at 7.1453 from 7.1381 previously closed. Onshore spot market is trading higher at 7.1353 from 7.1301 closed before the national holiday. 12 month NDF followed both the on/offshore market and is trading higher  at 6.9977 from 6.9940 previously closed.

USD/IDR spot market is trading higher at 16570 from 16568 previously closed. 1 month NDF is trading higher at 16632 from 16604 previously closed.

USD/INR onshore spot market is trading lower at 88.69 from 88.79 previously close. 1 month NDF is trading lower at 88.90 from 89.01 previously closed.

North American session

The main move of the day came after Trump threatened a massive increase in tariffs on China in retaliation for Chinese restrictions on rare earth exports. This sent equities sharply lower with UST yields and the USD also slipping. EUR/USD rose to 1.1615 from 1.1575 and USD/JPY fell to 151.65 from 152.65. EUR/CHF fell to .9300 from .9320 while AUD/USD fell below .65 from .6550 as risk appetite fell.  

Before the Trump comments USD/CAD had fallen to a low of 1.3976 from 1.4015 on a stronger than expected September Canadian employment increase of 60.4k. After Trump’s comments the reaction was less sharp than elsewhere but a gradual return to pre-data levels was seen, before renewed slippage to around 1.40. AUD/CAD fell sharply below .91 from near .92. 

The Preliminary October Michigan CSI was almost unchanged at 55.0 from 55.1. Fed’s Waller stated the Fed should ease only in 25bps increments while Musalem saw limited room for further rate cuts.