The Global Macro Pulse - Easy Forex News

Overnight Price Action

The failure of the Republican controlled House of Representative to agree on a bill to reopen the US government and extend its debt ceiling has had a mixed impact on equity markets in Asia. Although the S&P 500 fell 0.7% overnight, S&P futures are up 0.5% in Asia. A statement on CNN by Pennsylvania Republican Representative Charles Dent that House Speaker Boehner would allow a “clean” Senate bill to be put to a vote on the House floor has failed to have a clear impact on markets at the time of writing. The Nikkei is up 0.2%, but equities in Shanghai and Hong Kong are down 1.4% and 0.3%, respectively. Kospi is up just under 1%. US 10yr Treasury yield moved to 2.74%, its highest level since September 23.

After dipping overnight, EURUSD has recovered slightly in Asia to 1.3513. Similarly, USDJPY is trading at 98.53 and AUDUSD is sideways at 0.9525. EM Asia dollar pairs are mixed in thin trading, but broadly sideways. USDKRW has nudged lower to 1066.75, but USDMYR has popped up to 3.1715 despite a move lower in USDSGD to 1.2423. The SGD trade-weighted index appears to be about 0.6% below the top of its bands. China’s central bank fixed USDCNY only 4pips lower to 6.1408 and allowed spot to essentially track this move.

JGB yields are lower by 1–2bps across the curve with the belly having moved most. Continuing adjustment to the end of the reserve maintenance period has pushed China’s 7-day repo rate down 60bps to 3.32% and front-end swap rates down 5–7bps. In contrast, yields in Hong Kong, Korea, Malaysia, and Singapore have followed US Treasury yields 1–2bps higher.

Read the full report: Market Research

Credit Suisse