Markets & Finance News

Round-up of South Korean financial markets:

China's yuan returned close to the four-month highs struck late last week, amid heavy corporate dollar selling on Monday morning despite expectations that the U.S. Federal Reserve will reduce asset purchases at some point to tighten monetary policy. The yuan opened at 6.3883 per dollar and was changing hands at 6.3832 at midday, slightly firmer than the previous late session close. The People's Bank of China set the midpoint rate at 6.3924 per dollar prior to market open, firmer than the previous fix of 6.4032. Last week, China's yuan posted its biggest weekly gain against the greenback in five months on the back of strong corporate dollar selling. China's foreign currency regulator attributed the yuan's strength to market forces, and a more flexible trading mechanism. "The yuan still has upward momentum, but I don't think China's central bank would like to see the yuan sprint past 6.35 against the dollar in one breath," a forex trader at a foreign bank said. If yuan rises above the 6.35 mark, its appreciation could accelerate, Scotiabank said in its latest report. Shanghai-based CIB Research said any potential improvement in strained trade relations between China and the United States could boost the yuan further. But more broadly, markets were awaiting signals on when and how the Fed will begin tightening policy. The dollar index fell slightly after Fed Chair Jerome Powell said on Friday the U.S. central bank should start the process of reducing support for the economy by cutting back on its asset purchases, but should avoid touching the interest rate dial. The yuan market at 4:54AM GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.3924 6.4032 0.17% Spot yuan 6.3832 6.385 0.03% Divergence from -0.14% midpoint* Spot change YTD 2.27% Spot change since 2005 29.66% revaluation Key indexes: Item Current Previous Change Thomson 100.41 100.49 -0.1 Reuters/HKEX CNH index Dollar index 93.515 93.662 -0.2 *Divergence of the dollar/yuan exchange rate. Negative number indicates that spot yuan is trading stronger than the midpoint. The People's Bank of China (PBOC) allows the exchange rate to rise or fall 2% from official midpoint rate it sets each morning. OFFSHORE CNH MARKET Instrument Current Difference from onshore Offshore spot yuan 6.3784 0.08% * Offshore 6.5616 -2.58% non-deliverable forwards ** *Premium for offshore spot over onshore **Figure reflects difference from PBOC's official midpoint, since non-deliverable forwards are settled against the midpoint. . (Reporting by SHANGHAI NEWSROOM; Editing by Simon Cameron-Moore)

Asian stocks were mostly flat to slightly higher on Monday as a fresh COVID-19 outbreak in China added to worries about slowing growth in the world's second-biggest economy, while the Thai baht climbed on a revival in the country's tourism sector. Malaysia, Indonesia, South Korea and Singapore shares traded flat to 0.2% higher, while Philippine stocks slipped 0.7%. China, already struggling with a power crunch and crisis in its real estate sector, on Sunday warned that its latest COVID-19 outbreak - across 11 provinces - was likely to spread further, with authorities discouraging travel in an attempt to contain it. Market watchers worried that new curbs could be imposed in the country, which could see economic growth and trade with its Asian partners slow. The Chinese yuan opened 0.1% weaker on the news. There could be "aggressive measures to control virus spreads," said Yeap Jun Rong, market strategist at retail trading platform IG, "which may put a cap on growth, thereby potentially putting risk appetite in the region on hold over the coming days." Meanwhile, the Indonesian rupiah dropped 0.4% to a nearly two-week low as the coal exporter's currency continued to suffer from tumbling prices of the commodity. Singapore's dollar and the South Korean won firmed 0.3% and 0.6%, respectively, while most other Asian currencies were tepid. Further investment clues for South Korea will come with third-quarter gross domestic product (GDP) data due on Tuesday. Asia's fourth-largest economy is expected to have expanded by 0.6% from the previous quarter on robust exports. Leading gains in the region, the Thai baht rallied 0.8% to hit more than a one-month high after the trade and tourism-reliant economy announced rules for its quarantine-free reopening to visitors from 45 countries. Investor confidence in the Thai economy had waned due to collapse of its tourism sector as exports also struggled after the pandemic, with the baht becoming Asia's worst-performing currency this year. HIGHLIGHTS ** Singapore's 10-year benchmark yield is down 3 basis points at 1.733%​​ ** Indonesian 10-year benchmark yields are down 2.4 basis points at 6.159% ** In the Philippines, top index losers are Ayala Land Inc , down 4.1%, and Aboitiz Equity Ventures Inc, down 2.5% Asia stock indexes and currencies at 0342 GMT COUNTRY FX RIC FX DAILY % FX YTD % INDEX STOCKS DAILY % STOCKS YTD % Japan -0.18 -9.18 -0.99 3.92 China +0.04 +2.28 0.36 3.52 India +0.00 -2.44 0.00 29.56 Indonesia -0.42 -0.99 0.08 11.21 Malaysia +0.00 -3.09 0.18 -2.23 Philippines +0.02 -5.36 -0.66 1.42 S.Korea +0.63 -7.14 0.40 5.04 Singapore +0.26 -1.73 0.01 12.71 Taiwan +0.11 +2.20 0.20 14.86 Thailand +0.75 -9.57 -0.53 12.79 (Reporting by Anushka Trivedi in Bengaluru; Editing by Kenneth Maxwell)

* Chinese property stocks slip, onshore and HK benchmarks steady

The Australian and New Zealand dollars hovered below recent peaks on Monday as traders wait to see whether upcoming Australian inflation data will match a red-hot reading in New Zealand that lifted yields and the currencies last week.

Meiji Yasuda Life Insurance, Japan's third-largest private life insurance firm, said on Monday it expected the yen to rebound and planned to reduce investment in foreign sovereign bonds in the second half of the financial year ending in March.

Meiji Yasuda Life Insurance , Japan's third-largest private life insurance firm, expects the yen's weakness to be corrected and plans to reduce investment in foreign sovereign bonds in the six months to March, a top investment planning executive said on Monday. (Reporting by Hideyuki Sano Editing by Chang-Ran Kim)

Round-up of South Korean financial markets: ** South Korean shares rose on Monday ahead of key corporate quarterly results at home and abroad. The won strengthened, and the benchmark bond yield rose. ** The benchmark KOSPI gained 4.87 points, or 0.16%, to 3,011.03 by 0231 GMT. ** Chip giant Samsung Electronics fell 0.43%, while peer SK Hynix jumped 2.03%. Battery maker LG Chem added 0.12% but platform company Naver fell 1.23%. ** Samsung Electronics and SK Hynix are expected to report their earnings results on Thursday and Tuesday, respectively. ** Globally, Facebook will report results later on Monday, while other tech giants Microsoft , Apple and Alphabet will announce their results later in the week. ** Meanwhile, South Korea will release its third-quarter economic data early on Tuesday, which is expected to have slowed a bit on subdued domestic demand. ** Foreigners were net buyers of 69.9 billion won ($59.38 million) worth of shares on the main board. ** The won was quoted at 1,174.2 per dollar on the onshore settlement platform , up 0.25%. ** In offshore trading, the won was quoted at 1,174.1 per dollar, up 0.3%, while in non-deliverable forward trading, its one-month contract was quoted at 1,174.0. ** In money and debt markets, December futures on three-year treasury bonds rose 0.04 point to 108.52. ** The most liquid 3-year Korean treasury bond yield rose by 0.4 basis point to 1.893%, while the benchmark 10-year yield rose by 0.6 basis point to 2.417%. ($1 = 1,177.2300 won) (Reporting by Joori Roh; editing by Uttaresh.V)

The following table shows rates for Asian currencies against the dollar at 0208 GMT. CURRENCIES VS U.S. DOLLAR Currency Latest bid Previous day Pct Move Japan yen 113.620 113.46 -0.14 Sing dlr 1.347 1.3477 +0.08 Taiwan dlr 27.891 27.902 +0.04 Korean won 1174.600 1177.1 +0.21 Baht 33.280 33.38 +0.30 Peso 50.805 50.74 -0.13 Rupiah 14170.000 14120 -0.35 Rupee 74.890 74.89 0.00 Ringgit 4.152 4.148 -0.08 Yuan 6.388 6.385 -0.04 Change so far in 2021 Currency Latest bid End 2020 Pct Move Japan yen 113.620 103.24 -9.14 Sing dlr 1.347 1.3209 -1.91 Taiwan dlr 27.891 28.483 +2.12 Korean won 1174.600 1086.20 -7.53 Baht 33.280 29.96 -9.98 Peso 50.805 48.01 -5.50 Rupiah 14170.000 14040 -0.92 Rupee 74.890 73.07 -2.44 Ringgit 4.152 4.0200 -3.17 Yuan 6.388 6.5283 +2.20 (Compiled by Anushka Trivedi in Bengaluru)

The dollar steadied on Monday after its steepest weekly loss in more than a month, as traders weigh the effect of inflation on the relative pace of looming rate hikes - with a wary eye on U.S. growth data and a European Central Bank meeting. The greenback had softened, especially against the yen, after Federal Reserve Chair Jerome Powell said on Friday it was time to start cutting back asset purchases, though not yet time to begin raising interest rates. His remarks came as investors have priced in Fed rate hikes starting in the second half of next year and yet have begun to trim long dollar positions in anticipation that other central banks could get moving even sooner. On Monday, the dollar was firm at $1.1643 per euro and found a footing on the yen at 113.54 after Friday's slide. The Australian and New Zealand dollars were held below the multi-month peaks they had scaled during last week. The Antipodeans, along with sterling, had bounded ahead this month as traders scrambled to price in higher rates while inflation runs hot, with markets now eyeing a near 60% chance of a Bank of England hike next week. Sterling was up 0.1% at $1.3772, but analysts were cautious about further gains especially as the Fed edges closer to tapering and policy tightening. The Aussie was steady at $0.7473 and the kiwi at $0.7157. "Dollar risks remain skewed to the upside," said Kim Mundy, a currency analyst at the Commonwealth Bank of Australia in Sydney. "(Fed) members are slowly conceding that inflation risks are skewed to the upside (and) the upshot is that interest rate markets can continue to price a more aggressive Fed Funds rate hike cycle which can support the dollar." This week, Australian inflation data due on Wednesday is likely to set the tone for the next stage in a tussle between traders and a resolutely dovish central bank. On Thursday, U.S. growth data is expected to show a slowdown in growth as consumer confidence has faltered, but a surprise on either side might have consequences for the interest rate outlook. Also on Thursday the Bank of Japan and the European Central Bank meet. Neither are expected to adjust policy, but in Europe market gauges of projected inflation are at odds with the bank's guidance. In the background, traders remain nervous about trouble brewing at indebted developer China Evergrande Group. It surprised investors by averting default with a last-minute coupon payment last week, but other pressing debts loom. China's yuan held just shy of a five-month peak in offshore trade at 6.3804 per dollar. Cryptocurrencies were steady below the heights reached last week, with bitcoin up 2% at $62,000. In emerging markets the beaten-down Turkish lira was braced for selling as state banks are expected to follow a surprise rate cut from the central bank. ======================================================== Currency bid prices at 0110 GMT Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar $1.1645 $1.1646 -0.01% -4.69% +1.1649 +1.1626 Dollar/Yen 113.7350 113.4900 +0.18% +10.07% +113.7400 +113.5750 Euro/Yen <EURJPY=EB 132.45 132.17 +0.21% +4.35% +132.4500 +132.1200 S> Dollar/Swiss 0.9163 0.9162 +0.00% +3.56% +0.9169 +0.9157 Sterling/Dollar 1.3771 1.3756 +0.13% +0.81% +1.3775 +1.3752 Dollar/Canadian 1.2362 1.2368 -0.03% -2.90% +1.2379 +1.2358 Aussie/Dollar 0.7478 0.7470 +0.11% -2.79% +0.7478 +0.7465 NZ 0.7161 0.7150 +0.15% -0.29% +0.7162 +0.7148 Dollar/Dollar All spots Tokyo spots Europe spots Volatilities Tokyo Forex market info from BOJ (Reporting by Tom Westbrook; Editing by Sam Holmes)