FX Asia Briefing for Sunday 22th of March

The dollar rose for a ninth straight day and the yen had its worst week in three years amid dire warnings about the economic effects of the coronavirus pandemic that sent U.S. stocks to a three-year low. Treasuries advanced, with yields on 10-year notes plunging the most in a single day since March 2009. The outbreak worsened as the number of infections and death toll rose, pushing more central banks ease monetary policy and more governments to impose or extend lockdowns, along with measures including borders closures, grounding of flights and shuttering gas stations to contain the spread.

WHAT TO WATCH

• South Korea reports March imports
• Singapore and Hong Kong report CPI
• Taiwan reports February industrial production
• Royal Bank of Australia’s Kent speaks in Sydney

FRIDAY TRADING SESSIONS

• The Bloomberg Dollar Spot Index rose 0.1%, erasing loss of as much as 1.8% to gain for a ninth consecutive day
• Asia Pacific G-10 FX (as of late afternoon in New York on Friday)
  • USD/JPY +0.2% to 110.91, rose as much as 0.7% to 111.51, highest level in a nearly month; the weekly gain of 3.5% is best in over three years
  • AUD/USD +1% to 0.5798
  • NZD/USD +0.2% to 0.5700
• Treasury yields fell across the curve, with the 10-year yield falling ~29 bps to 0.85%

TOP NEWS

• Bridgewater Says U.S. GDP to Shrink 6% Without ‘Meaningful’ Aid
• Oil Suffers Biggest Weekly Loss Since 1991 With Demand in Focus
• Lockdowns Expanding in U.S.; Grim Record in Italy: Virus Update
• Bank of Thailand Makes Surprise Rate Cut on Virus Fears
• Latin America Isn’t Ready for the Virus Onslaught Headed Its Way
• China’s Economy to Return Fast to Potential Growth, PBOC Says
• Bank of Thailand Vows Market Stability After Jump in Yields
• Australia Deploys A$66 Billion, Pledges Yet More Stimulus
• Malaysia Growth Seen as Low as 2% on ‘Triple Whammy’ of Troubles
• India Lockdown May Be ‘Too Slow’ to Stop Millions of Infections
• India’s Reserves Plunge Most in 8 Years as RBI Defends Rupee

KEY VIEWS

• Goldman Sachs Sees 2Q U.S. GDP Shrinking at Record 24% Rate
• Citi Sees Few Signs of Improving Liquidity in Currency Markets
• Yield Curve Control May Be More Effective Than Fed Buying: BofA
• Fed May Bring More Tools to Support Funding, Liquidity: NatWest
• Fed’s ‘Frantic’ Buying Pace May Put Reserves Near $3t: Barclays

DATA RELEASED FRIDAY

• U.S. February existing home sales were 5.77m, exceeding estimates of 5.51m
• Canada January retail sales M/M were 0.4%, exceeding the 0.3% median estimate

ECONOMIC DATA (All times HK):

• TBA: (South Korea) March Imports 20 Days YoY, prior 4.7%
  • March Exports 20 Days YoY, prior 12.4%
• 11:30am: (Thailand) Feb. Customs Trade Balance, est. $2.8b, prior $1.56b deficit
  • Feb. Customs Exports YoY, est. -10.9%, prior 3.35%
  • Feb. Customs Imports YoY, est. -5.7%, prior -7.86%
• 1pm: (Singapore) Feb. CPI YoY, est. 0.45%, prior 0.8%
  • Feb. CPI NSA MoM, est. 0.2%, prior -0.2%
  • Feb. CPI Core YoY, est. 0.05%, prior 0.3%
• 3pm: (Japan) Feb. Convenience Store Sales YoY, prior 0.4%
• 4pm: (Taiwan) Feb. Industrial Production YoY, est. 3.7%, prior -1.51%
  • Feb. Unemployment Rate, est. 3.77%, prior 3.71%
• 4:30pm: (Hong Kong) Feb. CPI Composite YoY, est. 1.6%, prior 1.4%
• Nothing major scheduled

GOVERNMENT:CENTRAL BANKS (All times HK):

• 6:10am: (Australia) RBA’s Kent Gives Speech in Sydney
• 9:10am: (Japan) BOJ Outright Bond Purchase 10~25 Year
  • BOJ Outright Bond Purchase 25 Years~

BOND SALES/PURCHASES (All times HK):

• For corporate bonds, see New Issue Monitor
• 9:30am: Korea Central Bank to Sell KRW 900Bln 1-Year Bond
• 10:30am: Korea to Sell KRW 1.1Tln 20-Year Bond
• 12:30pm: Taiwan to Sell TWD25.0b 5-Yr Bonds
• 1pm: Korea Central Bank to Sell KRW 800Bln 91-Days Bond

Markets as of late Friday in New York:

• USD/JPY +0.2% to 110.91 (range 109.34-111.51)
• EUR/USD little changed at 1.0697 (range 1.0638-1.0831)
• AUD/USD +1% to 0.5798 (range 0.5665-0.5985)
• NZD/USD +0.2% to 0.5700 (range 0.5609-0.5881)
• USD/CAD -1.1% to 1.4346 (range 1.4150-1.4536)
• GBP/USD +1% to 1.1599 (range 1.1412-1.1934)
• USD/CHF -0.1% to 0.9853 (range 0.9744-0.9901)
• 1-mo. USD/TWD NDF -0.8% to 30.046
• Bloomberg Dollar Spot Index +0.1% to 1292.45
• JPM Emerging Mkt FX Index -0.6% to 53.22
• JPM FX Volatility Index -7.1% to 13.97
• U.S. stocks lower
  • S&P 500 -4.3% to 2304.92
  • DJIA -4.5% to 19174
• Commodities:
  • WTI Crude -9.5% to $23.45/bbl
  • Gold +1.7% to $1,497/oz (range $1,455-$1,516)
  • Copper +1.7% to $4,825/mt