Implied Volatility Jumps

Taiwan dollar is slightly stronger on Monday, USD/TWD last down 0.030 at 27.975 after closing above the 28.00 handle on Friday for the first time since July 27. The pair has moved a range since April but 1-month implied volatility has jumped in the past few sessions to 4.95, the highest since early June.

• Bloomberg reported earlier that Taiwan has begun administering its first domestically developed Covid-19 vaccines Monday as it seeks to rely more on local options after struggling to secure sufficient supply of the major international shots. President Tsai Ing-wen will be among the first on Monday to get the vaccine developed by Taipei-based Medigen Vaccine Biologics Corporation. The company is yet to complete phase-3 trials for its vaccine but has been granted an emergency use authorization to begin inoculations.
• Markets look ahead to industrial production and labour market data later in the session. Industrial production is expected to print 17.6% in July from 18.37% in June. Goldman Sachs are more optimistic: "We expect IP to rise 19% yoy (Bloomberg consensus: 17.6%), accelerating marginally from 18.4% yoy in June. This would imply a sequential increase of 0.4% mom in July after seasonal adjustments, decelerating from 3.9% mom sa in June. Exports in July remained solid and production sub-index of manufacturing PMI also rose to 66.9 from 63.8 in June."