Overnight Price Action
Dollar strength has been the main theme in Asian trading. Equity markets are up almost across the board following the 0.6% rise in the S&P, but most gains have been small. The Nikkei has risen only 0.1%, China 0.4%, KOSPI 0.7%, while S&P futures are down just under 0.1%. In FX, although EURUSD and USDJPY have traded sideways at 1.2854 and 102.25 respectively after their overnight weakness, AUDUSD has dropped 0.6% in Asia to 0.9560. Emerging Asian currencies are weaker across the board against the USD, led by a 0.7% drop in the PHP to 42.23 and a 0.5% fall in the MYR to 3.0579. USDCNY fixed 38pips higher to 6.1856, less than our model based on the DXY suggested. JGB yields opened up but drifted down to just below yesterday’s close. In contrast, yields in emerging Asia are higher across the board with rates in Hong Kong and Singapore jumping in line with the US and Korean yields up 5-8bps with curve steepening.
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Credit Suisse