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28 Jan 2015
Market Movers: MAS surprises, Australian CPI comes out strong – TDS
FXStreet (Barcelona) - The TD Securities Team shares the performance of the markets during the Asian session, noting that MAS policy surprises led SGD to weaken by 1% while AUD rallied towards 0.80 handle on a stronger than expected CPI number.
Key Quotes
“In a surprise announcement, the MAS eased policy today via the SGD, the first time it has made an emergency policy change since Sep 2011, seeking a slower pace of appreciation against a basket of currencies. The SGD is 1% weaker, rising from US$1.34 to US$1.3515.”
“Shortly after, a stronger than expected Australian CPI report saw the AUD rally to US$0.80 as shorts covered and expectations for a Feb rate cut were pushed back.”
“ACGB yields rose 6bps at the short end and 4 bps at the long end, but expectations for the RBA to still cut in Q1 tempered the moves. NZGB yields are actually 1bp lower—ignoring the ACGB moves—as the focus there shifts towards the RBNZ reverting to a neutral bias at its OCR decision tomorrow.”
“The USD is firmer +0.25%, UST yields are unchanged while equities across the region are mostly higher, Nikkei +0.45%, HK +0.25%, India +0.4% but China is -0.2% weaker.”
“No notable moves in the commodity space, most are unchanged. Only move worth noting is 1% decline in Brent to US$49.00.”
“While we do not expect any blockbuster shifts in the FOMC’s bias later today, we look for the Fed to finally drop the “considerable time” language, sticking with the “patient” language that was introduced at the December meeting.”
Key Quotes
“In a surprise announcement, the MAS eased policy today via the SGD, the first time it has made an emergency policy change since Sep 2011, seeking a slower pace of appreciation against a basket of currencies. The SGD is 1% weaker, rising from US$1.34 to US$1.3515.”
“Shortly after, a stronger than expected Australian CPI report saw the AUD rally to US$0.80 as shorts covered and expectations for a Feb rate cut were pushed back.”
“ACGB yields rose 6bps at the short end and 4 bps at the long end, but expectations for the RBA to still cut in Q1 tempered the moves. NZGB yields are actually 1bp lower—ignoring the ACGB moves—as the focus there shifts towards the RBNZ reverting to a neutral bias at its OCR decision tomorrow.”
“The USD is firmer +0.25%, UST yields are unchanged while equities across the region are mostly higher, Nikkei +0.45%, HK +0.25%, India +0.4% but China is -0.2% weaker.”
“No notable moves in the commodity space, most are unchanged. Only move worth noting is 1% decline in Brent to US$49.00.”
“While we do not expect any blockbuster shifts in the FOMC’s bias later today, we look for the Fed to finally drop the “considerable time” language, sticking with the “patient” language that was introduced at the December meeting.”