TD Securities Cautious On TWD In Immediate Term

MNI (London) - Ahead of next week’s Taiwanese election TD Securities note that “equities tend to rally shortly after the elections while TWD tends to close stronger after recording initial losses.”

• They see “increasing downside risks for TWD into the election. For one thing, it still ranks poorly in our overlay portfolio. Another risk lies with stretched positioning and short-term valuations. Our positioning indicator, shows longs in EM Asia. Combining our models, TWD’s technical setup is among the worst we track - just behind NOK, CHF, and JPY. TWD looks better placed than KRW or CNH in Asia but also pales against INR, PHP, and THB on relative fundamentals.”