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Equities Weighing

TWD

Spot USD/TWD is pushing back close to YTD highs, as local equities enter bear market territory. We last tracked just over 29.80. Highs in May were just above 29.85. Note the 1 month NDF is tracking around the 29.83 level.

  • Local equities have slumped into bear market territory. The TWSE is off around 23% from January highs. Headwinds for the semiconductor sector continue to weigh, with TSMC noting clients are reducing their chip orders for the rest of this year.
  • Net equity outflows remain strong from an offshore investor standpoint. Up until Thursday we saw just $1bn in net outflows, while for June as a whole there was $7.72 in net outflows, the highest in the region.
  • The NDF forward points are adjusting higher but remain negative, 3 month last at -0.1825, up from late June lows of -0.37. This will add to TWD's headwinds from a carry standpoint. USD/TWD can often top out once such forward points push into positive territory but we aren't at that point yet.
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