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ASIA FX: USD/CNH Down Slightly Amid Mixed Activity Figures/Higher Equities

ASIA FX
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USD/CNH sits near 7.1300 in latest dealings, modestly firmer in CNH terms, but tracking recent ranges. We got to lows of 7.1225 amid a more positive onshore equity mood, as PBoC Governor Pan unveiled details of the swap facility take up to support local equities. 

  • Equity markets are in positive territory at the break but off session highs (CSI 300 +0.78%). Governor Pan also spoke about further policy support via a potential RRR cut before year end and that the LPRs will be cut by 20-25bps this coming Monday. He also mentioned lower 7-day repo rates and MLF, although it appears this referred to Sep moves, rather than fresh cuts.  
  • Q3 GDP was softer in q/q terms but firmer in y/y terms, albeit at 4.6% still sub the government's 5% target. IP and retail sales were firmer than forecast, but property measures mostly remain in negative territory by more than double digits. The authorities hope for improving trends through Oct and Q4 and still have optimism around hitting the growth target.
  • USD/KRW spot is little changed, last near 1371, slightly off earlier highs close to 1374. Local equities are down by around 0.75% at this stage, with the Kospi under 2600. Offshore investors have sold a further $300mn of local stocks today.
  • USD/TWD spot is slightly lower, but at 32.16 remains close to recent highs.  Better sentiment following TSMC's better earnings yesterday hasn't done much for TWD. 
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USD/CNH sits near 7.1300 in latest dealings, modestly firmer in CNH terms, but tracking recent ranges. We got to lows of 7.1225 amid a more positive onshore equity mood, as PBoC Governor Pan unveiled details of the swap facility take up to support local equities. 

  • Equity markets are in positive territory at the break but off session highs (CSI 300 +0.78%). Governor Pan also spoke about further policy support via a potential RRR cut before year end and that the LPRs will be cut by 20-25bps this coming Monday. He also mentioned lower 7-day repo rates and MLF, although it appears this referred to Sep moves, rather than fresh cuts.  
  • Q3 GDP was softer in q/q terms but firmer in y/y terms, albeit at 4.6% still sub the government's 5% target. IP and retail sales were firmer than forecast, but property measures mostly remain in negative territory by more than double digits. The authorities hope for improving trends through Oct and Q4 and still have optimism around hitting the growth target.
  • USD/KRW spot is little changed, last near 1371, slightly off earlier highs close to 1374. Local equities are down by around 0.75% at this stage, with the Kospi under 2600. Offshore investors have sold a further $300mn of local stocks today.
  • USD/TWD spot is slightly lower, but at 32.16 remains close to recent highs.  Better sentiment following TSMC's better earnings yesterday hasn't done much for TWD.