 Risk-off sentiment dominates Asian markets today, as the Chinese Yuan's free fall accelerates. The steep depreciation could limit the room for the government to ease monetary policy further to help the economy that's still troubled by pandemic measures. Yen and Dollar are currently the stronger ones in the currency markets, followed by Swiss Franc. Kiwi and Aussie are the worst together with Sterling, while Euro and Canadian are mixed. Technically, USD/CNY (onshore Yuan) hit the highest level since 2008 while USD/CNH (offshore Yuan) hits a record high since 2011. As for USD/CNH, it's now close to 100% projection of 6.3057 to 6.8372 from 6.7159 at 7.2474. There is prospect of topping around current level and break of 7.1453 support will suggest that a correction is underway. However, barring government intervention, decisive break of 7.2474 could prompt further upside acceleration towards 161.8% projection at 7.5759, which would add more pressure on Asian sentiment. In Asia, at the time of writing, Nikkei is down -2.05%. Hong Kong HSI is down -2.34%. China Shanghai SSE is down -0.75%. Singapore Strait Times is down -1.24%. Japan 10-year JGB yield is flat at 0.254. Overnight, DOW dropped -0.43%. S&P 500 dropped -0.21%. But NASDAQ rose 0.25%. 10-year yield rose 0.086 to 3.964, after hitting 3.992, just shy of 4% handle. |
