IDR: USD/IDR Rupiah Breaks Recent Trends, Strengthening at the Open.
Nov-07 02:55
- USD/IDR is stronger at 15,760 in Jakarta morning; versus yesterday's close of 15,830.
- The rupiah’s weakening bias over the last two weeks has taken out significant technical levels and it had traded above the 200-day EMA of 15,718. This morning’s move sees the currency trending back towards that level.
- The Bloomberg Dollar spot index is 0.06% lower.
- USD/IDR one-month implied volatility is lower this morning to 7.03%, versus 7.1375% yesterday’s close.
- Indonesia's 10-year bond yield is at 6.784%
- Indonesia 5 yr USD CDS at 71bps (yesterday close 70bp, 5-year low 58bps in 2020).
Headlines
- The central bank still sees room for more rate cuts, the near-term focus will be on maintaining rupiah stability, Bank Indonesia Governor Perry Warjiyo told parliament on Wednesday (source: BBG).
- Indonesia plans to cancel as much as $550 million of bad loans owed by small businesses to drive new lending and boost growth in Southeast Asia’s largest economy (source: BBG).
Data Releases
- Foreign Reserves - (prior $149.9bn)
Government Bond Auction
- None.
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GOLD: Consolidating As Fed Cut Expectations Pared
Oct-08 02:55
Gold has extended Monday’s weakness in today’s Asia-Pac session.
- Bullion closed 0.4% lower on Monday as market participants continued to adjust to Friday's strong September jobs report and price out aggressive rate cut expectations.
- Fed funds futures have not only taken out risks for a 50bp cut next month but now reflect the chance of no action. The implied November contract shows -19bps in easing, with December at -44bps.
- Lower rates are typically positive for gold, which doesn’t pay interest.
- There was limited reaction to Fed speakers yesterday. MN Fed President Kashkari said risks of higher inflation are waning as he defended his 50bp rate cut decision, seeing a neutral rate at around 3%.
- We have limited US data today, with the focus on the minutes for the September FOMC tomorrow, CPI on Thursday and PPI on Friday.
- According to MNI’s technicals team, gold remains in consolidation mode, although the trend condition is also unchanged, and bulls are still in the driver’s seat. The focus remains on $2,690.2 next, a Fibonacci projection. Firm support lies at $2,615.4, the 20-day EMA.
US TSY FLOWS: BLOCK: Dec'24 10Y Likely Buy
Oct-08 02:48
- +1,100 UXYZ4 116-13+, post time offer at 1331:52 AEST, DV01 $102,000. The 10Y contract trades 116-14 last (+ 08) vs session highs of 116-14+
US TSY FUTURES: US TSY FLOWS: BLOCK: Dec'24 5Y Likely Buy
Oct-08 02:44
- +2,200 FVZ4 108-22, post time offer at 1214:42 AEST, DV01 $92,000. The 2Y contract trades 108-22¾ last (+ 06¼) vs session highs of 108-23¼
