Markets reacted to yesterday's poor Taiwan...>

TAIWAN: Markets reacted to yesterday's poor Taiwan export orders (down 3.7% on

the year) by selling the TWD further against the USD Tuesday, prompting the pair

to hit fresh cycle highs up at 31.468, the weakest level since early 2017. While

the export orders numbers actually fared slightly better-than-expected, markets

focused on the sharp drop on export orders to China, which fell close to 10%.

The data, twinned with further pressure on technology suppliers working with

Huawei (a critical sector for Taiwan) worked against the currency and helped

press the Taiwanese sovereign curve lower and flatter.

-USD/TWD options remain highly active, with the largest trades of the day eyeing

further gains in the pair. Call strikes as high as 33.05 crossed in early

Europe, with notional waged via calls outnumbering puts by 2:1.

-Understandably, TWD remains highly sensitive to trade tensions between the US

and China and downside pressure remains on TWD throughout European hours - the

TWD 1m NDF continues to gain, hitting fresh cycle highs after the onshore close.