Philippines suspends FX trading, T-bond auction after quake

MANILA: The Philippines suspended foreign exchange trading and a treasury bond auction on Tuesday, officials said, due to the impact of a 6.1 magnitude earthquake that hit the main island of Luzon, causing disruption in Manila and nearby provinces.

The bureau of treasury said it had cancelled a planned auction for 20-year treasury bonds, as government offices in Metro Manila were closed to allow safety checks on buildings. The central bank said it had suspended forex trading.

The Philippine Stock Exchange remained open for trading.

The earthquake struck late on Monday afternoon, killing at least 11 people in Pampanga province, where several buildings collapsed. It prompted evacuations, transport disruption and some power outages in Manila.

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Ringgit slides further against us dollar

KUALA LUMPUR: The ringgit slid further against the US dollar today, with currency traders still in a risk-off mood after the release of slower industrial production index (IPI) data for February 2019, along with the recent lower global growth forecast by the International Monetary Fund (IMF).

At 6pm, the ringgit lost 0.17% to end at 4.1120/1160 against the US dollar from 4.1050/1100 at Wednesday’s close.

SPI Asset Management head of trading and market strategy Stephen Innes said the February IPI data accounted for the weaker ringgit, as it could trigger more equity outflows from crucial mining and energy sector stocks.

Malaysia’s IPI grew 1.7% year-on-year in February, registering the slowest growth since June 2018, as manufacturing and electricity sector indexes expanded at a softer pace while mining posted a larger decline.

Innes said the data miss — the index grew slower than the expected 2.2% — supported the view that Bank Negara Malaysia (BNM) would adopt a dovish bias, as the fall in the IPI index could have negative consequences on Malaysia’s gross domestic product (GDP), which was always a key metric the BNM followed.

“When combined with a possible overtly dovish shift from the BNM, the IPI data is sending negative signals to the currency traders,“ he told Bernama via email today.

Meanwhile, Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the weaker ringgit was in tandem with regional currencies, as the downside risk narratives had become louder, judging from the IMF’s latest global growth forecast revision.

“The European Central Bank and the US Federal Reserve have also become wary on the balance of risks, which are tilted on the downside based on the recent communique.

“Therefore, it’s a risk-off mode now, and we believe the forex markets have become increasingly risk averse, resulting in higher demand for the safe-haven currencies,“ he said.

This week, the IMF trimmed its global GDP growth forecast for 2019 to 3.3% from the previous forecast of 3.5% made in January this year.

Overall, the ringgit traded lower against a basket of major currencies.

It slipped further against the British pound to 5.3826/3883 from 5.3673/3755 and declined against the Japanese yen to 3.7008/7048 from 3.6939/6987 yesterday.

The local note depreciated against the euro to 4.6367/6428 against Wednesday’s close of 4.6292/6361 and vis-a-vis the Singapore dollar, it retreated to 3.0383/0417 from 3.0347/0393 yesterday. — Bernama

Most Asian markets rise with China, US optimistic on trade

HONG KONG: Asian markets were mostly up in holiday-thinned trade on Friday as investors took support from hopes that China and the US will hammer out a trade deal after both sides sounded notes of optimism.

With top negotiators from the world’s top two economies huddled down in Washington for three days of talks, there has been a growing sense they are close to an agreement to end a stand-off that battered global equities last year.

Donald Trump on Thursday added to the sense of hope when he said the two sides were nearing a successful conclusion.

“We will probably know over the next four weeks. It may take two weeks after that,“ he told reporters following a meeting with Beijing’s top trade envoy and Vice Premier Liu He.

“It’s looking very good.”

Later Liu said they had “reached a new consensus on important issues”, according to China’s Xinhua. The news agency also reported that President Xi Jinping had called for the “early conclusion of negotiations”.

Both camps have been cautiously optimistic for months, but the last mile is proving to be the hardest as they tussle over whether and when Washington should remove the painful tariffs it imposed on Chinese goods last year.

While the news was once again upbeat, Asian markets were unable to press ahead with the rally that has characterised the past two weeks, with Hong Kong and Shanghai closed for holidays.

‘Devil’s in the details’

Tokyo ended the morning session 0.3% higher, Singapore added 0.4% and Seoul put on 0.2%, while Manila rose 0.4% and Jakarta 0.1%. However, Sydney shed 0.9% and Wellington slipped 0.8%.

“There’s a little bit of a risk that it’s a sell-on-the-news event,“ Ann Miletti, at Wells Fargo Asset Management, told Bloomberg News.

“The devil is really in the details – how good is this deal going to look?”

In forex trade, the pound was essentially flat as traders kept tabs on the Brexit saga, with Prime Minister Theresa May set to hold a third day of talks with opposition Labour Party leader Jeremy Corbyn to find a way to avert a no-deal divorce.

With an April 12 deadline for leaving on the horizon, May is desperately searching for votes to pass an agreement she struck with the EU months ago.

Brussels must decide whether to grant her plea for another delay to May 22, with one option being for a longer extension that could give Britain time to rethink Brexit and possibly reverse its decision to leave.

“A Brexit extension is the most likely scenario from here, the length of which could be decided by Labour backing Theresa May’s deal, in which case it would be a short one” said Oanda analyst Alfonso Esparza.

“Or no deal is passed and the UK (asks) for a longer extension, the length of which would have to be decided by the EU and which could be the end of Brexit” if there is a new referendum or new elections, both of which he said are likely scenarios. — AFP

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Asian markets extend gains after strong data, pound holds ground

HONG KONG: Asian investors pressed on with their buying spree Tuesday as they took up the baton from a strong Wall Street rally, cheered by healthy economic data, optimism over China-US trade talks and the prospect of no hike in borrowing costs.

A forecast-beating factory report out of Beijing – which spurred buying across the region Monday – was followed by a similarly positive US reading, tempering worries about the outlook for the world’s biggest and most crucial economies.

Traders are now awaiting the start of the next round of top-level trade talks in Washington, with China and the US noting progress in a meeting last week in Beijing.

A series of olive branch measures from the Chinese side has lifted hopes the two will eventually reach a deal to end their tariffs row, which dragged on equities at the end of 2018.

This week also sees the release of US March jobs data, which are closely watched for an idea about the state of the economy, with the Federal Reserve also using the figures to map its path for monetary policy.

The Fed’s recent dovish lean has helped propel a rally across share markets this year, with other central banks also looking to ease up on their tightening moves.

“Having the central banks take a step back, with the Fed saying that they’re going to pause and that they’re going to be patient at least toward the end of this year, I think that gives the market a little bit of time” to wait for economic data to turn around, said Victoria Fernandez, chief market strategist at Crossmark Global Investments in Houston.

“Is this a bottom, is this a trend that we’re starting to see – an upward trend? If so that’s gonna be positive for all of the markets,“ she told Bloomberg News.

Sterling soldiers on

In early trade Hong Kong edged up 0.3% and Shanghai added 0.4% while Tokyo finished the morning session 0.3% higher.

However, the gains are limited by investors taking a breather after their latest advances.

Sydney put on 0.6%, Singapore added 0.4%, Seoul climbed 0.3% and Wellington jumped 0.7%, while Taipei, Manila and Jakarta also rose.

The confident air helped oil prices to extend Monday’s gains of more than 2%, with support also coming from news that Opec had lowered output while major producer Venezuela’s political and economy crisis deepens.

Forex investors continue to be occupied by the ongoing Brexit drama, with MPs on Monday once again rejecting a series of alternative options to Prime Minister Theresa May’s EU divorce deal, which has already been rejected three times.

Brussels has set an April 12 deadline to agree to the divorce deal, settle on an alternative or crash out of the bloc, which most observers warn will be economically calamitous.

May was to call in her cabinet to discuss the next steps but while investors are averse to uncertainty, there is still hope that parliament will avert a no-deal exit, which is keeping the pound from plunging.

“While no-deal risks grow, the base case remains for the UK to get a longer extension from the EU to start over from scratch,“ said Oanda senior market analyst Edward Moya.

“May will discuss her options tomorrow in a cabinet meeting, but it appears she may try to push through another attempt of getting her deal across the finish line.” — AFP

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