EM ASIA CREDIT: MNI EM Credit Market Wrap - Asia
** The main stories out of the region**
10yr U.S. treasury yields were around 1bp higher in the Asia-Pacific session, with markets still digesting Fed Chair Powell's post FOMC comments. Asia EM valuations are a bit softer today, with govie/agency bond spreads 1-2bp weaker, with Indonesia and Malaysia underperforming slightly. No single name stories are playing out at the moment, with the new issue market relatively quiet. No update yet on ENN Energy, which remains suspended. Presumably an update after market close. In equities, Indonesia (JCI -1.2%) had a broad fall across industries, while in China (CSI 300 -2.2%) the move lower is lead by tech.
Best & Worst Performers (zsprd, bp)
Source: Bloomberg
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AUDUSD TECHS: Bulls Remain In The Driver’s Seat
- RES 4: 0.6471 High Dec 9 ‘24
- RES 3: 0.6429 High Dec 12 ‘24
- RES 2: 0.6414 38.2% retracement of the Sep 30 ‘24 - Feb 3 bear leg
- RES 1: 0.6384 High Dec 13
- PRICE: 0.6363 @ 08:02 GMT Feb 19
- SUP 1: 0.6305/6231 50-day EMA / Low Feb 10
- SUP 3: 0.6171/6088 Low Feb 4 / 3
- SUP 3: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing
- SUP 4: 0.6000 Round number support
AUDUSD is trading at its recent highs and a bull theme remains intact. The pair has cleared 0.6331, the Jan 24 high and a key short-term resistance. The breach highlights a stronger reversal and paves the way for gains towards 0.6414, a Fibonacci retracement. Note that moving average studies remain in a bear-mode position. This suggests the latest recovery is a correction. Initial firm support to watch is 0.6231, the Feb 10 low.
EURJPY TECHS: Resistance Remains Intact
- RES 4: 164.08 High Jan 24
- RES 3: 162.71 76.4% retracement of the Dec 30 - Feb 10 bear leg
- RES 2: 162.49 High Jan 29
- RES 1: 160.88/161.19 50-day EMA / High Feb 13
- PRICE: 158.44 @ 08:00 GMT Feb 19
- SUP 1: 157.90/155.61 Low Feb 11 / 10 and the bear trigger
- SUP 2: 155.15 Low Sep 16 ‘24
- SUP 3: 154.42 Low Aug 5 ‘24 and key medium-term support
- SUP 4: 153.87 Low Dec 14 ‘23
EURJPY has pulled back from its recent high. For now, resistance at 160.88, the 50-day EMA, remains intact. It has been pierced, however, a clear break is required to strengthen a bullish condition and signal scope for an extension towards 162.71, a Fibonacci retracement. For bears, a stronger reversal would refocus attention on 155.61, the Feb 10 low and a bear trigger. Clearance of this level would resume the downtrend.
STIR: Euribor Futures Look Through Trump Tariff Threats and UK CPI Data
Euribor futures have been happy to look through US President Trump’s latest tariff threats, now flat to -2.0 ticks through the blues. There was limited impact from the mixed UK CPI data.
- Desks note that early Euribor flow is likely a liquidation: ERM5 97.9375c, sold at 4.75 in 10k (ref 97.825)
- ECB-dated OIS price 76bps of easing through year-end
- At yesterday’s MNI event, ECB’s Cipollone cemented his status as one of the more dovish members of the Executive Board. He said that rate cuts should take into account the tightening impact of QT, while expressing worries about the growth outlook and the risk of China exporting disinflation to the Eurozone in response to US tariffs.
- ECB dove Panetta has expressed similar concerns around the growth outlook in comments this morning.
- Today’s regional calendar includes Eurozone December current account data, alongside preliminary Q4 labour cost and vacancy data.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Mar-25 | 2.428 | -23.9 |
| Apr-25 | 2.273 | -39.3 |
| Jun-25 | 2.104 | -56.2 |
| Jul-25 | 2.046 | -62.0 |
| Sep-25 | 1.968 | -69.8 |
| Oct-25 | 1.946 | -72.0 |
| Dec-25 | 1.909 | -75.7 |
| Feb-26 | 1.908 | -75.8 |
| Source: MNI/Bloomberg. | ||
