The Global Macro Pulse

The dollar rally continued in Asia, albeit with less momentum in the majors. AUSDUSD dipped to a low of 0.9459, but popped back up to 0.9479. After falling in New York trading, EURUSD is essentially flat to its Asian open at 1.3743 and USDJPY has stimilarly stabilized at 98.14 after its overnight rally. USDKRW gapped higher at the open, traded up to a high of 1062.85, but has retraced back down to 1060.74. In contrast the INR and MYR are about 0.3% weaker against the USD today at 61.525 and 3.1551 respectively. S&P futures are down 0.2% following the S&P 500’s 0.6% rise overnight. However, the Nikkei is up 1.1%, spurred by yen weakness, the Shanghai Comp is up 0.8% and the HSI has risen 0.9%. Kospi and the Taiex are basically flat.

The US 10yr Treasury yield has dropped 1.5bps to 2.4889% and JGB yields are off 1.6bps at the 10yr tenor and 1.4bps at the 20yr. China’s 7-day repo rate rose 55bps to 5.55%, its highest level since the June spike in yields. This has pushed front-end swap rates up about 6bps. Yields in most other EM Asia markets are lower by 1 – 2bps.