Investment Bank Outlook 23-09-2021
CIBC
FX Flows
The RBNZ said it is to proceed with the proposal to tighten mortgage lending to control the inflated housing market. From November 1, RBNZ will be restricting amount lending banks can do an LVR of 80% to 10% down from 20%. Not much for the FX space, NZDUSD held under 0.7000. There is a short-term support at 0.6993, which gave way. Not much in terms of data, we will have August trade data out tomorrow.
Despite the mood, AUDUSD declined, think it was more of a FOMC-thing. Intraday support comes in at 0.7222, level that has held well since August 27. Large strike at 0.7240 expires today worth about AUD1.13bn. No economic data due tomorrow.
USDJPY few ticks higher, at 109.92. Japanese retail day traders have booked some profit, not all, which means we could see this bit higher. First resistance is 110.08 then 110.17.
I suspect that someone sold NZDCAD which forced the USDCAD to come off from 1.2795 to 1.2780. It could have been oil futures as well, Nov contract rose to $72.42. By end of morning, spot USDCAD is back to Toronto close. Not much in terms of flows, guess it is all about positioning.
Who said what
- Evergrande Group USD bonds and shares climbed, share price up 32% at one point and 2022 USD note up 4.7 cents.
- Evergrande’s Hui: Only by fully resuming projects construction and sales can Evergrande ensure home buyers’ rights, investment products repayment and borrowing repayment; will ensure repayment of investment products based on earlier announced plans
- Major Evergrande backer, Chinese Estates sold 108.9mio of Evergrande shares; the firm said it could take a loss of about HKD9.5bn.
- RBNZ: To tighten LVR restrictions; from November 1 2021, will be restricting amount lending banks can do an LVR of 80% to 10% down from 20%
- Brazil Central Bank: Raises benchmark lending by 100 bps to 6.25%; decision was unanimous; rate hike of 100 bps at next meeting; base outlook is to have restrictive rates
Credit Agricole
Asia overnight:
Subdued UST long-end yields following the Fed meeting and news that the Chinese government is looking to restructure residential property developer, Evergrande, boosted sentiment in the Asian session. Most Asian bourses and S&P500 futures were trading higher at the time of writing. G10 FX was more sensitive to higher US yields than equity markets. The Antipodean currencies and CAD were the underperformers during the session and the EUR the outperformer.
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.