1) Asian session wrap
The Asian session began with risk firmly on the back foot as New York finished the day at the lows after a day of relentless pessimism. EURUSD managed to print marginally lower than NY had done at 1.3160 this morning in Asia but pivotal support in the pair towards 1.3145 safe for now. We lurched lower on headlines from a Chinese researcher: {http://xrl.us/bmkumz}
*CHINA TO WITHOLD AID TILL EU MEETS CERTAIN CONDITIONS: YAO YANG
*CHINA WON’T HELP EU WITHOUT GUARANTEE OF INVESTMENT: RESEARCHER
EURUSD flows by far the most significant overnight with the 1.3145/1.3210 region seeing client activity pick up a little bit; we’ve been net buyers as EURUSD popped out of the lows to push back above 1.3200 at lunch.
Risk currencies were widely under pressure at the open, AUD trading to 1.0030 through support at 1.0045 and NZD down to 0.7610 but the story of the morning has been one of quiet retracement with the volatility quickly sucked out the market even as other assets continued the risk off tone. Shanghai and Kospi leading the equity move lower, currently -1.6% and -1.9% respectively but currencies continue to stall following the sharp moves seen yesterday in Europe.
The focus for the European session firmly on EZ yields and the continuing concern of ratings agency downgrades.
USD/Asia remains well bid, as the below run shows, and USD/INR in particular has continued to blow out to the right.
2) Orderbook
AUDUSD: CTA and Real money names looking to sell into any rally to 1.0150. Prop bids below at 0.9950
EURUSD: Prop stops above at 1.3200/1.3240. Bids below ahead of 1.3150 and then stops below that level.
USDJPY: CTA and prop stops below at 77.50/77.70
3) USD/Asia run
USDKRW 1156 (Monday London open 1149)
USDINR 53.94 (52.86)
USDPHP 43.94 (43.60)
USDCNY1y 6.4190 (6.4035)
USDIDR 9170 (9110)
USDMYR 3.1885 (3.1605)
USDTWD 30.25 (30.21)
USDSGD 1.3035 (1.2940)
HSBC Global Research