TWD
Spot USD/TWD is little changed in the first part of Thursday trade, the pair last near 32.14. Recent highs remain marked just above 32.20. Above this level the 50 and 100-day EMAs sit in the 32.25/26 region. The 20-day EMA is very close to current levels, whole the 200-day is near 32.08.
- There is little positive spill over for TWD from the surge in onshore equities, with the Taiex up around 3% at this stage. Positive comments from Nvidia's CEO is buoying tech bellwether TSMC.
- Offshore investors, have for the most part remained consistent sellers of local equities in recent months. The chart below overlays the Taiex against the rolling 12 month sum of equity flows, which sit back close to cycle lows, despite better local equity sentiment. Greater signs of stability or less outflow pressure is one factor that may help USD/TWD get back sub 32.00.
- US-TW 2yr swap rate differentials sit sharply lower as well, last near +172bps. Last time we were at these levels USD/TWD spot was closer to 30.20/25. Still, the still positive yield differential with the US may be encouraging domestic outflow pressures.
- The local data calendar is empty until next Thursday's central bank decision.
Fig 1: Taiwan Equity Trends & Rolling 12mth Offshore Investor Flows
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