Wedged Between Key EMAs, Export Orders On Tap, US-China Tensions Also In Focus

(MNI Australia) Spot USD/TWD sits slightly below recent highs, in line with some USD softness towards the tail end of last week. We currently track just below 30.40. This is still close to multi-week highs going back to mid January. The pair is wedged between the 200 (~30.33) and 50 day (30.47) EMAs.

• Later on, Jan export orders will print. The market expects -24% in y/y terms, versus -23.2% prior. This is lows going back to early 2009 for the series (i.e. post the financial crisis). Regional peers (South Korea & Singapore) have generally reported softer trend through Jan.
• Some thawing of economic tensions with China appears apparent, with China officials visiting Taiwan over the weekend for the first time in 3 years.
• Equally though, a top Pentagon official also arrived in Taiwan over the weekend, while top Taiwan officials will also reportedly hold talks in Washington this week. Newswires also reported earlier today that the US and Taiwan may sign a bilateral trade agreement sooner than expected (potentially before the end of the first half rather than by year end).
• So, the market is likely to be mindful of US-China tensions around this issue.
• In the equity space, the Taiex has largely tracks sideways since the start of Feb, although we are modestly higher today. Last week offshore investors sold -$218.51mn of local shares, although over the last trading month, net inflows have still been +$4.2bn.