Asia FX No Systemic USD Squeeze in Asia Yet 30 Nov 10

8/8/2019 Asia FX No Systemic USD Squeeze in Asia Yet 30 Nov 10

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Ref: GR10AU

| Standard Chartered Morning Call |

Important disclosures can be found in the Disclosures Appendix

All rights reserved. Standard Chartered Bank 2010 http://research.standardchartered.com

Analysts

Thomas Harr , +65 6530 3617Standard Chartered Bank, SingaporeHead, Asian FX Strategy

[email protected]

Vincent Tsui, +852 3983 8563Standard Chartered Bank (Hong Kong) Ltd.Economist

[email protected]

Edward Lee Wee Kok, +65 6530 3188

Standard Chartered Bank, SingaporeRegional Head of Rates Strategy, [email protected]

Delphine Arrig hi , +852 3983 8568Standard Chartered Bank (Hong Kong) Ltd.

Senior R ates [email protected]

Suktae Oh, +82 2 3702 5011

SC First Bank Korea LimitedRegional Head of Research, [email protected]

Usara Wilaipich , +662 724 8878Standard Chartered Bank (Thai) PCLSenior Economist, Thailand

[email protected]

Jinny Yan, +86 21 3851 5019Standard Chartered Bank (China) Ltd.Economist

[email protected]

Anubhuti Sahay, +91 22 2268 3182Standard Chartered Bank, India

[email protected]

Sayem Ali, +92 3245 7839Standard Chartered Bank (Pakistan) Ltd.

[email protected]

Nagaraj Kulkarni, +91 22 2265 5 934Standard Chartered Bank, IndiaSenior R ates Strategist

Nagaraj.Kul [email protected]

Thomas C osterg, +44 20 7885 8615

Standard Chartered Bank, United KingdomEconomist

[email protected]

Douglas Smith, +1 212 667 0564

Standard Chartered Ban k, United StatesRegional Head of Research, Latin [email protected]

David Semmens, +1 212 667 0452Standard Chartered Ban k, United States

[email protected]

30 Nov 10 – No systemic USD squeeze in Asia yet21:00 GMT 29 November 2010

USD liquidity conditions in the euro area may get worse before they get better

There is no evidence of a systemic USD liquidity squeeze in Asia so far

This is supported by Asian economies’ strong external balances and low leverage

Investors should look for opportunities to sell EUR-AXJ and JPY-AXJ from early 2011

Calendar: Korean CPI and trade data, Indian and Australian GDP, China’s PMI

We are pleased to announce that our FX research team was ranked the most

accurate forecaster of major exchange rates for the six quarters to 30 September 2010, in a Bloomberg survey of 44 leading international financial institutions.

In recent weeks, the US dollar (USD) liquidity situation has worsened in the euro-area

markets, triggered by sovereign debt concerns. The likelihood of recent market

dislocations deteriorating into a large-scale funding squeeze depends on whether the

situation in the euro-area periphery deteriorates further, and the next few days are likely

to be crucial. While we do not think a crisis is imminent, things could deteriorate quickly.

Looking further afield, there may be a limit to how severe USD funding stress may

become as the major central banks, including the European Central Bank (ECB) and

four other G10 institutions, still have USD swap lines in place with the Federal Reserve.

In Asia, USD liquidity has tightened in Korea and the Phil ippines. However, in both

economies, this appears to have been triggered by local events, including North

Korea’s artillery fire at South Korea’s Yeonpyeong Island on 23 November and

Bangko Sentral ng Pilipinas’ (BSP) decision not to roll over maturing FX swaps. In

other Asia ex-Japan (AXJ) markets, USD liquidity appears to be ample. This is

supported by AXJ economies’ relatively low ratios of short -term debt to FX reserves

and, with the exception of Korea, AXJ banks’ relatively low dependence on wholesale

funding. Hence, so far, there is no evidence of a systemic shortage of USD in Asia

triggered by euro-area sovereign debt worries.

We expect USD-AXJ to remain choppy and trendless into year-end on euro-area

sovereign debt worries, China’s monetary tightening and the growth slowdown.However, from early 2011, we expect USD-AXJ to head lower again, supported by

AXJ growth outperformance and widening US-AXJ rate spreads. Within AXJ, we

expect North East Asian currencies to outperform their South East Asian counterparts

owing to large external surpluses, monetary tightening and better valuations. From

early 2011, investors should focus on scaling into AXJ risks, where long positions in

the Korean won (KRW), Chinese yuan (CNY) and Taiwan dollar (TWD) should be

funded by the euro (EUR) and the Japanese yen (JPY).



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Standard Chartered Morning Call | 30 November 2010

2

Rates and foreign exchange

Asia

China – Strong PMI to remain a short-term support

On Wednesday 1 December, China releases its official manufacturing PMI (9am local time). We expect it to have

remained robust at 55.0 – and to be at a similar level even after seasonal adjustments – from 54.7 in October. The rise

since July is largely owing to a sharp rebound in its major components – new orders (58.2 in October) and production

(57.1) – as well as a stable employment (52.1) component, which has shown expansion since March 2010. New export

orders (52.6) have yet to suffer significantly, but a decline may be inevitable, given expected export headwinds heading

into 2011. Overall, manufacturing activity has remained resilient, so far. Nonetheless, downside risks loom for upcoming

PMI readings as we head into the festive season, especially with further tightening to come (we forecast four more rate

hikes of 25bps each before end-June 2011).

India – Q2-FY11 GDP expected to moderate

The market remains focused on the release of Q2-FY11 (July-September 2010) GDP data, with the consensus –

including us – expecting headline growth to have moderated. We expect GDP growth slowed to 8.3%, from 8.8% y/y in

Q1-FY11, primarily because industrial growth declined to 8.8% y/y from 11.5% y/y in the previous quarter. Indeed,

moderate industrial activity levels – a result of an elevated base effect and the waning of pent-up demand – will probably

more than offset reasonably stable performances by the agricultural and the service sectors. Any deviation from the

consensus expectation (8.2% y/y) will be closely monitored to gauge policy implications. Also, the demand-side

breakdown of GDP will be clos ely scrutinised to assess any further pick-up in household demand, as investment activity

moderates in line with slower industrial growth.

Meanwhile, on 29 November, the Reserve Bank of India (RBI) announced a further extension of the temporary liquidity-

easing measures announced on 9 November. The RBI has temporarily reduced the statuary liquidity ratio (SLR) by an

additional 1%, to 23%. The SLR is the proportion of net demand and time liabilities (NDTL) that scheduled commercial

banks have to invest in government securities. The reduction of the SLR will allow banks to use c.INR 500bn worth of

government securities as collateral for overnight borrowing at the repo rate the central bank sets via its daily liquidity

adjustment facility (LAF). In addition, the RBI will continue to conduct the second LAF in the evening. Both these indirect

measures are effective until 28 January 2011.

As forecast in our recent publication (On the Ground, 01 November 2010, ‘India – Liquidity shortage: no end in

sight’), banking system liquidity has remained well above the central bank’s comfort level (of c.INR 500bn), despite

ongoing temporary indirect measures. In December, we expect the banking system to come under further stress given

cash outflows owing to advance tax payments. This, combined with the government’s intention (as indicated by recent

statements) to continue its borrowing programme (and not postpone the auctions) might have pushed the RBI to

announce these measures, in our view. In the near term, we expect these measures to provide a temporary buffer for the

banking system, helping it to manage the advance tax cash outflows.

Pakistan – Another rate hike

The State Bank of Pakis tan (SBP) hiked policy rates by 50bps in the 29 November meeting, because of concern over the

deterioration of the fiscal posi tion and a sharp acceleration in inflation. The hike was in line with market expectations, with

the overnight deposit and lending rates increased to 11% and 14%, respectively. SBP has clamped down hard on the lack

of fiscal discipline, with the government printing PKR 266bn during July to November to finance its deficit, despite

committing to zero net borrowing from the central bank under the terms of the IMF programme. Delays in implementing tax

measures – with implementation of the reformed sales tax (RGST) now delayed until January 2011 instead of the earlier

target of October 2010 – have aggravated the weak fiscal position and forced the government to continue printing money

to finance its large deficits. This has led to an increase in high-powered reserve money and fuelled inflation, with inflation

printing 15.3% in October 2010 versus 9.8% in October 2009; it is likely to trend higher in Q4-2010 owing to the expected

cutback in power subsidies and rising international commodity prices. The SBP has now raised its inflation forecasts for

FY11 (ending June 2011) to 14.5% from 11.5% earlier. This indicates further monetary tightening ahead.



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3

The 50bps hike in benchmark rates – which was announced after the markets closed – was in line with bond market

expectations. We expect the yield on the benchmark 10Y government security to move higher by about 15bps. However,

as the existing benchmark 10Y government security will be soon replaced, we expect traders to cover their short

positions, and thus cap the rise in the 10Y yield. In the near term, we expect further bond-market weakness. We believe

that inflation is on an upward trajectory, and has yet to peak. Consequently, we believe further monetary policy tightening

is likely, which will exert upward pressure on yields.

South Korea – We expect lower headline inflation and slower export growth

South Korea will release November CPI and trade data on 1 December. We expect year -on-year headl ine inflation to

have declined to 3.7% from 4.1% prior, thanks to fresh food prices stabilising. Headline inflation is likely to return to a

normal level around 3% in December, as fresh food prices continue to decline. Core inflation should remain subdued

owing to stable service-sector inflation. Exports are likely to show a gradual slowdown, although year-on-year growth

should still be high because of the lower base. Imports should be relatively strong. The trade surplus may decline slightly,

but should still be substantial. We forecast 28.0% export growth, 30.4% import growth, and a USD 5.0bn trade surplus.

Thailand – Economic growth set to moderate given political uncertaintyThai economic data for October is due on Tuesday at 07:30 GMT. We expect both manufacturing production and capacity

utilisation to have slowed versus September, given falling exports. October’s export values should have shrunk m/m owing

to lower global demand. Thanks to the favourable base effect, exports should have expanded by 16.1% y/y in October.

Accordingly, we expect the current account surplus to have narrowed to USD 2.3bn, from September’s USD 2.8bn. As

exports are likely to lose further momentum, we expect the surplus to decline in coming months. In terms of domestic

demand, we expect both private consumption and investment to moderate further , given renewed political uncertainty.

On 29 November Thailand’s Constitutional Court dismissed allegations that the Democrat Party (DP) had misused

political subsidies, and the DP survived the dissolution case. Nevertheless, it faces further challenges in coming months,

including another court case, which concerns allegations of illegal political donations worth THB 258mn. Separately, we

also envisage renewed political tension outside parliament. This follows the People’s Alliance for Democracy (PAD) – the

so-called ‘Yellow Shirts’ – decision to return to the streets to oppose parliament’s plan to rewrite the constitution. More

importantly, the PAD plans to hold a mass rally on 11 December. This event will remind the market of events in October-

November 2008, when the PAD besieged the capital’s Suvarnabhumi International Airport and Government House to

oust the government led by former PM Thaksin. On balance, we are still cautious about political uncertainty, with the risk

of an early election in 2011.

On Monday, the Thai baht (THB) strengthened after the Constitutional Court cleared the DP of election fraud, after USD-

THB had reached an intraday high of 30.34. However, we believe that the outlook for the THB has turned substantially less

positive recently. On 25 November, we lowered our short-term FX rating on the THB to Neutral from Overweight on slowing

growth, rising political uncertainty and the change in FX policy (see FX Alert, 25 November 2010, ‘THB lowered to

Neutral from Overweight’). Short-term momentum indicators for USD-THB are mixed, as the 14-day RSI and stochastics

are rolling over. Near-term, we believe USD-THB could consolidate within the relatively tight range of 30.10-30.35.

Renewed political uncertainty is likely slow the pace of foreign buying in the THB government bond market. In fact,

interest from foreign investors had already fallen, following the government’s decision to reintroduce withholding taxes on

foreign-bond investments on 12 October 2010. The pace of foreign-investor buying of THB securities eased to THB

5.3bn during the period 1-19 November, compared with THB 72.8bn in September. Note, however, that the latest DP

case may be seen as a near-term positive for foreign-investor sentiment. This may provide some curve-flattening

impetus, but it may be short-lived in light of the expected rise in political risk. As such, domestic influence over the local

bond market may slowly re-exert itself over the next few months, and the expected delay in the Bank of Thailand’s rate

hikes (we don’t expect the central bank to hike until Q4-2011) and moderating growth may provide some support to

domestic bonds. Recent investor interest (both foreign and local) has been tepid at these market levels and it may

require another 10-20bps to attract demand (where the 5Y yield wi ll be back to early July levels). Upcoming auctions,particularly the 5Y auction in mid-December, should provide a gauge of domestic demand.



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Africa

South Africa – SAGBs hit hard as foreign investors take some risk off

Heightened concern over tensions on the Korean peninsula and lingering debt woes in Europe led to a sharp reversal of

global risk appetite last week, with investors reducing their exposure to emerging markets ahead of year-end. South

African Government Bond (SAGB) yields backed up by more than 40bps across the curve over the period, in whatappeared to be a foreign-driven sell-off as SAGB sales by non-residents amounted to ZAR 25bn in the week ended 26

November (net sales over the week amount to ZAR 2.7bn). Las t week’s proposals by the South African government to

limit currency gains have also shaken investor appetite for local debt. The measures themselves, however – which point

to looser monetary policy with lower interest rates, higher foreign reserves and the creation of a sovereign wealth fund –

look relatively bond-supportive.

Indeed, while global uncertainties could lead to a short-term reduction in capital flows, the local outlook remains

favourable to the bond market. Q3 GDP growth was much weaker than expected, at 2.6% y/y from 3% in Q2, below a

consensus of 3.5% y/y. Although inflation began to edge up in October, with CPI inflation at 3.4% y/y from the probable

trough of 3.2% y/y in September, pressure is likely to remain moderate (thanks to the stronger currency), allowing CPI

inflation to remain comfortably within the central bank’s target band. With Tuesday’s budget announcement likely to showa further reduction in the fiscal deficit, current bond valuations appear relatively attractive, while positioning, which was

long a week ago, now appears more favourable. We therefore maintain our long position on the 10Y bond for now (see

Africa Rates Strategy Update, 24 August 2010), but will look to take profit opportunistically, as we remain wary of the

negative global sentiment.

Latin America

Brazil – The inner policy circle for Rousseff is taking shape

This week should bring additional announcements from President-elect Dilma Rousseff about the key members of her

inner circle policy team. This includes the role to be played by Antonio Palocci, the well-respected former finance minister

from President Lula’s first term. Local sources think Palocci will be named Rousseff’s chief of staff. Another key role to be

announced is the trade and development minister.

Last week’s announcement of key economic advisors has been taken well. Guido Mantega will stay in his post as finance

minister and Alexandre Tombini will be elevated from central bank board member to the president of the central bank.

Tombini has strong academic and policy credentials and will bring about a smooth transition from outgoing central bank

president Meirelles. Rousseff said that these appointments will ensure continuity of economic policy from Lula’s

government. This is better than a worsening of policy relative to the Lula government, but there is room for better policy.

One immediate issue is the state of expansionary fiscal and monetary policies which the Lula government used during

the crisis to boost the economy. While appropriate then, they have turned pro-cyclical now. Inflation is well above the

4.5% inflation target, and inflation expectations have been steadily rising.

With above-trend growth in 2010-11, the new government must tighten policy. The appointment of Tombini was animportant step towards the credibility of the inflation target. The next step is action. The market is currently pricing in

about 200bps of rate hikes between now and end-2011. We have been expecting 75bps in hikes, so 200bps looks

excessive. We do like the strategy of receiving rates in the Jan 12 DI contract, but there is the ris k that implied rates will

move higher still unless strong action is taken. Since a meaningful fiscal tightening is unlikely, in our opinion, monetary

policy is going to have to do all the heavy li fting. The longer the government waits to tighten policy, the s teeper the local

yield curve will become.



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5

G10

Australia – We expect Q3 GDP growth eased to 0.5% q/q

After a solid rebound of 1.2% q/q in Q2, we expect growth in the third quarter eased to 0.5% q/q, or 3.4% y/y. This was

largely owing to easing housing-market activity, given the expiry of the firs t-time home-buyer tax credit. House prices grew

by a mere 0.1% q/q in Q3, and transaction volumes moderated during the quarter. Meanwhile, there has been a mildcorrection in iron ore prices that has moderated the terms of trade. The trade surplus receded to AUD 5.69bn in Q3 from

AUD 8.23bn in Q2, on the back of a temporary slowdown in China and ‘double-dip’ recession concerns in August. Even so,

solid gains in employment underpin demand-pull inflationary concerns. We expect the Reserve Bank of Australia to

maintain its tightening bias , but rate hikes should be more gradual in the current cycle, given external uncertainties.

Euro area – Agreement on Ireland’s bailout package

Details have emerged over the weekend on the EUR 85bn rescue package to Ireland (for details, see On the Ground,

29 November 2010, ‘Ireland – The EU/IMF bailout programme’), of which 45bn will come from European governments.

Bond-market participants were reassured after the idea to make senior bondholders share the cos t of the rescue was

rejected. The agreement on Ireland coincided with a concession for Greece, which obtained an extension by four and a

half years on its debt repayment obligations following its EUR 110bn bailout in May 2010. Nevertheless pressure from

financial markets on the euro-area periphery did not diminish. Yields on Spanish 10Y bonds reached an 8-year high,

while the yields on Irish government bonds of same maturity escalated above 9.4%. The EUR continued its slide against

the USD, approaching 1.30.

Financial markets are still ignoring s igns of robust activity in the core euro-area countries. The EU Commission survey

released on Monday indicated continued momentum. The economic confidence index for November escalated to 105.3

after 103.8 in October (revised from 104.1), the highest in three years. Also, the business climate indicator rose to 0.96

after last month’s print was revised down to 0.91 (from 0.98). In a separate report, the EU Commission left its growth

forecasts for the euro area in 2011 unchanged at 1.5%, while seeing acceleration to 1.8% in 2012. Germany will remain

the key driver, with 2.2% expected next year (revised from 1.6%) and 2% in 2012. The European Union will expand more

rapidly than the single currency area, with 1.7% and 2.0% forecast in 2011 and 2012, respectively. We remain moreupbeat on the outlook for the euro area, expecting 1.7% in 2011 and 2.2% in 2012.

The European Commission releases its inflation es timate for November in the euro area on 29 November at 10.00GMT.

We expect the increase in prices to have plateaued at 1.9% y/y, driven by food and energy prices, and therefore

remaining on target. In a separate report at 10.00GMT, the European Commission will publish the euro -area

unemployment rate for October, which is set to remain unchanged at 10.1%. The breakdown by country should exhibit

continued differentiation between core countries and high-deficit peripheral countries. Germany’s unemployment change

for November (to be released at 8.55GMT) should have worsened, possibly reaching -4,000 after -3000 in October, with

the unemployment rate remaining at 7.5%.

US – House prices to decline further, but consumers are not so glumWe look for the Cas e-Shiller home price index to have dropped by 1.0% m/m in September. We expect the y/y change to

be the lowest since January 2010 at 0.6% y/y, down from 1.7% in August 2010. It is important to note that the Case

Shiller index, which is a 3MMA, continued to benefit until July from the boost provided by the homebuyers’ tax credit

even though the tax credit expired in April. This has allowed both existing and new home s ales s truggle to improve in H 2-

2010. Existing home sales are currently at 4.43mn, up from the low of 3.84mn in July after the expiration of the

homebuyers’ tax credit but still below the prior low (4.53mn) during 2008 -09. New home sales remain severely weakened

at 283,000, barely off their all-time low of 275,000. Despite the nearly record-high technical affordability of homes, the

weak labour market has kept mortgage approvals at 1997 levels throughout H2-2010. Distressed homes accounted for

35% of all s ales in September, edging up from 3 4% in August, and notably higher than the 29% a year earlier. Inventory

of new homes (8.6 months) and existing homes (10.5 months) remains elevated compared to the series historical

average of six months. Both these factors will continue to place downward pressure on prices.



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6

The Conference Board measure of consumer confidence (November) is expected to have risen to 53.0 from 50.2

previously. This is likely to be driven by the improvement in the labour market, primarily initial jobless claims, which

reached their lowest point since July 2008. We would also expect some positive effect from the 2.3% rise in equity levels

so far in November against October’s performance. These two improvements should overshadow any effect from the

pick-up in November’s gasoline prices, which rose 2.3%. October’s labour -market differential at -42.6 was the weakest it

has been since February. This reflects the weary labour market we have seen since payroll losses peaked in January

2009, which has largely stalled the Conference Board and University of Michigan surveys since April 2009. While US

consumers remain pessimistic, they will continue to hold off on big-ticket purchases, depressing consumer spending

while maintaining decade-high saving levels .



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7

Table 1: Global markets bond/swap monitors

Tenor yield ± bps rate ± bps rate ± bps Last ± bps

MajorsUSD 2Y 0.51 n/c 0.76 -1 - - 25 -1

10Y 2.84 -3 2.97 -4 - - 13 -1

EUR 2Y 0.91 -2 1.62 +1 -46 -2 71 +3

10Y 2.74 n/c 3.12 +3 -24 -1 38 +3

GBP 2Y 0.99 -2 1.37 -4 -4 +1 38 -2

10Y 3.34 n/c 3.48 n/c -11 n/c 14 n/c

JPY 2Y 0.20 n/c 0.42 +1 -49 +1 22 +1

10Y 1.19 n/c 1.25 -1 -42 +3 6 -1

Asia

CNY 2Y 2.77 -1 3.46 -8 -1.08 -20 * 69 -7

10Y 4.02 +3 4.30 -4 1.45 -5 * 28 -7

HKD 2Y 0.57 +1 0.69 -1 -23 +2 12 -2

10Y 2.50 n/c 2.88 -2 -25 -1 38 -2

TWD 2Y 0.56 -7 0.92 -1 -1 n/c 36 +6

10Y 1.41 +1 1.73 n/c -2 n/c 32 -1

KRW 3Y 3.22 -8 3.52 -7 -205 -4 30 +1

10Y 4.42 -5 4.10 -8 -150 -2 -32 -3

INR 2Y 7.28 +1 6.85 +6 # 4.80 -5 * -43 +5

10Y 8.01 +4 7.41 n/c # 5.30 +5 * -60 -4

IDR 3Y 5.55 -38 7.35 n/c - - 180 +38

10Y 7.33 -20 - - - - - -

MYR 3Y 3.14 n/c 3.43 +2 2.05 n/c * 29 +2

10Y 3.83 n/c 4.43 +1 2.70 n/c * 60 +1

PHP 2Y 3.50 n/c 2.95 n/c 1.65 -5 * -55 n/c

10Y 5.82 n/c 5.50 n/c 3.85 n/c * -32 n/c

PKR 3Y 13.38 n/c - - - - - -

10Y 13.68 n/c - - - - - -

SGD 2Y 0.45 +1 0.93 n/c -11 +1 48 -1

10Y 2.31 +1 2.77 -2 -21 n/c 46 -3

THB 2Y 2.34 +6 1.89 +10 -35 n/c ## -45 +4

10Y 3.64 +12 3.59 +4 -91 +1 ## -5 -8

VND 2Y 10.70 +4 - - - - - -

5Y 11.45 +6 - - - - - -

Africa/Middle East/Latam

AED 2Y - - 2.35 n/c - - - -

10Y - - 4.72 -4 - - - -

SAR 2Y - - 1.17 -2 - - - -

10Y - - 3.91 -6 - - - -

TRY 2Y 7.92 +7 8.77 -2 -180 n/c 85 -95Y 8.13 n/c 9.55 n/c -185 n/c 142 n/c

KES 2Y 3.68 n/c - - - - - -

10Y 8.65 n/c - - - - - -

NGN 2Y 9.84 +44 - - - - - -

10Y 12.64 +434 - - - - - -

ZAR 2Y 6.23 n/c 6.00 +10 6 n/c -23 +9

10Y 8.41 +8 7.94 +18 6 n/c -47 +10

BRL 2Y 12.39 +4 12.34 +14 - - -5 +10

5Y 12.41 +12 12.20 +12 - - -21 n/c

MXN 3Y 5.73 +7 5.87 +12 - - 14 +5

10Y 6.87 +3 7.95 +2 - - 108 -1* CNY, INR, MYR, PHP = NDS; # INR = MIFOR swaps; ## THB = CCS

Bond Swap Bond swapBasis

swaps/NDS

Note: All changes are against levels captured at 23:30 GMT the previous business day;

Sources: Bloomberg, Reuters, Standard Chartered Research



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Table 2: FX/equity/short-term rates monitors

FX/equity Last Change % Chng Tenor Last Change rate ± bps

Majors

USD S&P 500 1,188.47 -0.93 -0.08% 1M - - 0.26 n/c

3M - - 0.30 n/c

6M - - 0.46 n/c1Y - - 0.78 n/c

EUR FX spot 1.3121 -0.0120 -0.91% 1M -2 n/c 0.75 n/c

3M -6 n/c 0.97 n/c

DAX 6,697.97 -151.01 -2.25% 6M -13 -1 1.21 n/c

1Y -27 -2 1.49 n/c

GBP FX spot 1.5573 -0.0020 -0.13% 1M -4 n/c 0.58 n/c

3M -10 -1 0.74 n/c

FTSE 100 5,550.95 -117.75 -2.12% 6M -19 -1 1.03 n/c

1Y -41 +3 1.49 n/c

JPY FX spot 84.25 0.15 0.18% 1M -4 -1 0.12 n/c

3M -10 +1 0.19 n/c

NIKKEI 225 10,039.56 -40.20 -0.40% 6M -24 +2 0.36 n/c

1Y -61 +3 0.59 -1

Asia

CNY FX spot (onshore) 6.6605 -0.0081 -0.12% 1M 170 +51 # 3.60 +9

3M 20 -44 3.19 +6SHCOMP 2,871.70 -26.56 -0.92% 6M -300 +1 3.03 +2

1Y -1,055 +26 3.08 +2

HKD FX spot 7.7663 0.0017 0.02% 1M -17 n/c 0.17 +1

3M -52 n/c 0.26 +1

HSI 22,877.25 -177.43 -0.78% 6M -103 +2 0.40 +2

1Y -225 -3 0.74 +2

TWD FX spot (onshore) 30.4235 -0.0425 -0.14% 1M -0.01 -0.02 # 0.59 n/c

3M -0.18 -0.02 0.67 n/c

TWSE 8,312.15 -37.84 -0.46% 6M -0.38 -0.02 0.79 n/c

1Y -0.68 -0.02 1.07 n/c

KRW FX spot 1,165.50 9.55 0.82% 1M -250 n/c 2.63 n/c

3M -900 n/c 2.80 n/c

KOSPI 1,901.80 -25.88 -1.36% 6M -1500 n/c 2.92 n/c

1Y -2500 n/c 3.22 -2

INR FX spot 45.94 0.11 0.24% 1M 28 -2 # 6.95 +10

3M 71 +2 6.85 +5BSE SENSEX 19,136.61 -181.55 -0.95% 6M 124 +2 6.85 +8

1Y 225 n/c 6.84 +5

MYR FX spot 3.15 0.00 -0.05% 1M 66 3 2.84 n/c

3M 177 -2 2.97 n/c

KLCI 1,492.05 -4.44 -0.30% 6M 350 2 3.01 n/c

1Y 630 -13 3.12 n/c

SGD FX spot 1.3207 0.0008 0.06% 1M 0 +0 0.29 +4

3M 0 +0 0.31 +3

FSSTI 3,158.08 -1.15 -0.04% 6M 0 +0 0.47 +1

1Y 1 +2 - -

THB FX spot 30.22 -0.04 -0.13% 1M 2 -0 ** 1.80 n/c

3M 4 -0 1.90 n/c

SETI 991.71 -4.71 -0.47% 6M 9 -0 2.00 n/c

1Y 19 +1 2.15 n/c

IDR FX spot 9,016 11 0.12% 1M 47 +4 # 6.23 -2

3M 129 -2 6.68 -3

JCI 3,642.50 -59.51 -1.63% 6M 265 +5 6.94 -1

1Y 553 -3 7.18 +3

PHP FX spot 44.31 0.16 0.36% 1M -0.07 n/c # -0.44 n/c

3M -0.06 n/c 0.19 n/c

PSEi 4,097.49 n/c 0.00% 6M 0.00 n/c 1.38 n/c

1Y 0.17 n/c 1.63 n/c

PKR FX spot 85.85 -0.07 -0.08% 1M 76 n/c 13.03 +21

3M 228 n/c 13.14 +8

KSE 11,145.02 +9.68 0.09% 6M 442 n/c 13.41 +6

1Y 915 n/c 13.83 +6

VND FX spot 19,498 0.00 0.00% 1M 104 -72 12.81 n/c

3M 549 +176 13.40 n/c

VNINDEX 439.94 +0.09 0.02% 6M 1051 n/c 13.46 n/c

1Y 1996 n/c - -

# NDF forward points; ** onshore forward points; ## OIS; ### onshore THBFIX

X-IBORFX fwd pips

1



Ref: GR10AU


9

Table 2: FX/equity/short-term rates monitors (cont’d)

FX fwd pips X-IBORFX/equit Last Chan e % Chn Tenor Last Chan e rate ± bps

Africa/Middle East/Latam

AED FX spot 3.6730 0.0000 0.00% 1M 3 +68 1.64 -1

3M 8 -186 2.14 n/c

DFMGI 1,674.77 -7.46 -0.45% 6M 16 +1 2.38 n/cSAR FX spot 3.7502 -0.0004 -0.01% 1M -9 -2 0.35 n/c

3M -31 n/c 0.75 n/c

SASEIDX 6,309.97 +18.67 0.30% 6M -60 -1 0.85 n/cTRY FX spot 1.5047 0.0173 1.15% 1M 69 +5 7.21 n/c

3M 203 +6 7.69 +1

XU100 64,072.16 -2,075.58 -3.24% 6M 422 +18 7.93 n/cNGN FX spot 150.75 0.00 0.00% 1M - - 10.63 -21

3M - - 12.50 +8

NGSE 24,665.50 +51.05 0.21% 6M - - 13.17 +29ZAR FX spot 7.13 -0.02 -0.25% 1M 361 +29 5.43 n/c

3M 961 +6 5.55 n/c

JSE Africa Top40 IX 27,279.10 -451.33 -1.65% 6M 1,905 +28 5.68 n/c

BRL FX spot 1.7182 -0.0087 -0.51% 1M 118 +8 10.73 +3

3M 335 +9 10.97 +8

IBOV 67,908.18 -317.92 -0.47% 6M 694 +10 11.47 +14

MXN FX spot 12.49 0.00 -0.03% 1M 0.04 +0.0 4.87 -13M 0.10 -0.0 - -

MEXBOL 36,630.82 -273.71 -0.75% 6M 0.22 +0.0 - - *All changes are against levels captured at 23:30 GMT the previous business day;


Table 3: Key commodity indices

Last close Change % Change

Gold 1,368.00 +4.25 0.31%

LME 3,696.70 n/c 0.00%

CRB Index 302.89 +1.76 0.58%

WTI Cushing 85.56 +1.80 2.10%

*All changes are against levels captured at 23:30 GMT the previous business day; Sources: Bloomberg, Reuters, Standard Chartered Research

Table 4: FX crosses

Level 1-day chg YTD chg YTD high YTD low Level 1-day chg YTD chg YTD high YTD low

AUD-JPY 81.17 +0.06 -3.14 87.81 72.78 BRL-MXN 7.2669 +0.0342 -0.2067 7.4735 6.8623

EUR-BRL 2.2545 -0.0321 -0.2257 2.6112 2.2177 JPY-KRW 13.8347 +0.0889 +1.3813 13.3481 11.7639

EUR-CNY 8.7393 -0.0907 -1.0997 9.9107 8.3164 PHP-IDR 203.47 -0.50 -0.16 203.66 199.53

EUR-GBP 0.8426 -0.0066 -0.0530 0.9112 0.8460 SGD-INR 34.78 +0.06 +1.67 33.21 31.79

EUR-JPY 110.54 -0.81 -22.66 133.82 111.71 SGD-MYR 2.3870 -0.0026 -0.0423 2.4396 2.2958

EUR-MXN 16.3837 -0.1545 -2.1544 18.5500 15.5734 TRY-ZAR 4.7428 -0.0631 -0.1994 5.1182 4.7633

*All changes are against levels captured at 23:30 GMT the previous business day; Sources: Bloomberg, Reuters, Standard Chartered Research

Chart 1: Standard Chartered Risk Appetite Measure (SCRAM)

-1.0-0.8-0.6-0.4-0.20.00.20.40.60.81.0

N o v - 0 8

D e c - 0 8

J a n - 0 9

F e b - 0 9

M a r - 0 9

A p r - 0 9

M a y - 0 9

J u n - 0 9

J u l - 0 9

A u g - 0 9

S e p - 0 9

O c t - 0 9

N o v - 0 9

D e c - 0 9

J a n - 1 0

F e b - 1 0

M a r - 1 0

A p r - 1 0

M a y - 1 0

J u n - 1 0

J u l - 1 0

A u g - 1 0

S e p - 1 0

O c t - 1 0

N o v - 1 0

Daily RAI Upper Threshold Lower Threshold Lates t




Ref: GR10AU


10

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