19 Aug 2015
Effervescence remains high in EM FX space – Deutsche Bank
FXStreet (Edinburgh) - Jim Reid, Analyst at Deutsche Bank, assessed the recent developments in the EM FX space.
Key Quotes
“Looking at the rest of Asia this morning, that weakness in China has seen a broad-based sell-off across bourses across the region”.
“The Nikkei has fallen 1.32%, while there are also steep declines for the Hang Seng (-1.03%) and Kospi (-1.59%). The ASX (+1.29%) is the lone outlier although the index has pared back earlier stronger gains”.
“There’s been further action in the FX space meanwhile with the State Bank of Vietnam again taking the step to devalue the Dong, lowering the currency by 1% and widening the trade band in the process after a similar move last Wednesday in response to the PBoC”.
“Despite very small moves in the Yuan this morning, the Malaysian Ringgit (-0.62%) in particular has declined, while the Taiwanese Dollar (-0.20%) and Indonesian Rupiah (-0.33%) are also weaker”.
“10y Treasury yields are a basis point lower while Oil markets have sold off half a percent. Meanwhile, the Yen has strengthened slightly (+0.10%) after Japan reported the biggest trade deficit since February (¥268bn vs. ¥153bn expected) on the back of decelerating exports (7.6% yoy from 9.5% last month) in particular”.
Key Quotes
“Looking at the rest of Asia this morning, that weakness in China has seen a broad-based sell-off across bourses across the region”.
“The Nikkei has fallen 1.32%, while there are also steep declines for the Hang Seng (-1.03%) and Kospi (-1.59%). The ASX (+1.29%) is the lone outlier although the index has pared back earlier stronger gains”.
“There’s been further action in the FX space meanwhile with the State Bank of Vietnam again taking the step to devalue the Dong, lowering the currency by 1% and widening the trade band in the process after a similar move last Wednesday in response to the PBoC”.
“Despite very small moves in the Yuan this morning, the Malaysian Ringgit (-0.62%) in particular has declined, while the Taiwanese Dollar (-0.20%) and Indonesian Rupiah (-0.33%) are also weaker”.
“10y Treasury yields are a basis point lower while Oil markets have sold off half a percent. Meanwhile, the Yen has strengthened slightly (+0.10%) after Japan reported the biggest trade deficit since February (¥268bn vs. ¥153bn expected) on the back of decelerating exports (7.6% yoy from 9.5% last month) in particular”.