USD/TWD Attempting Break Back Below 32.00, Trade & Inflation Data Coming Up

USD/TWD spot testing back below the 32.00 level, although hasn't been able to sustain a break below this level (last 32.015). The 1 month NDF is already comfortably below this point (last 31.91). Spot USD/TWD is sub the 20-day EMA (32.05), which has been a support point since July.

• Like elsewhere in the region TWD is benefiting from the rebound in equity sentiment, although TWD is lagging Taiex gains. This is typically the case though (i.e. the FX will have a much lower beta to local equity moves). Net equity flows have been more positive, but are negative month to date -$563.8mn.
• In terms of other drivers, higher USD/CNH levels may be capping TWD gains to a degree, likewise a weaker export growth backdrop.
• October trade figures print later today, and the market looks for a further slowing in growth to -6.0% y/y, from -5.3%. This would be consistent with weaker outcomes already seen for South Korea and China in the month. The trade surplus is expected to remain healthy though.
• Also due is inflation data. The market expects headline to rise to 2.8% y/y (from 2.75%), but core is expected to moderate to 2.65% y/y, versus 2.79% prior.