Latest news with #StephenChiu
Mint
21 hours ago
- Business
- Mint
China Boosts Short-Term Cash Injection as Bond Selloff Extends
China's central bank added a substantial amount of cash into the financial system on Tuesday, in a move that's seen stabilizing bonds that have come under pressure from investors migrating into equities. The People's Bank of China added a net 465.7 billion yuan of short-term cash via reverse repurchase agreements, the largest daily net injection since July 25 and also the third biggest this year. Yields on the benchmark 10-year bond steadied after touching the highest level since April. Bonds have been battered in recent sessions as optimism over US-China trade talks and Beijing's measures to quell deflation fan a rally in local shares. Signs that the central bank will hold back from aggressively easing monetary policy and a tax on interest income on new bonds are also denting the demand for debt. The latest cash injection indicates the PBOC's desire to keep funding conditions ample for monthly tax payments and avoid any spikes in yields in a bid to support the weak economy. A further selloff in bonds also risks triggering redemptions and jeopardizing the government's borrowing plans. The PBOC has an incentive to maintain low money-market rates by keeping up the injections and to facilitate the upcoming bond supply, said Stephen Chiu, chief Asia FX & rates strategist at Bloomberg Intelligence. 'The government bond yield curve has room to further steepen as a result.' Liquidity conditions in China's banking system improved after the large cash injection by the PBOC, according to traders. However, the cost of funds still remains high, with the overnight repo rate for non-bank institutions still around 1.57%, said the traders who asked not to be named because they are not allowed to speak publicly. China's 10-year government bond held little changed at 1.77%. The overnight repo rate edged up one basis point to 1.45% while the seven-day rate held steady at 1.52%. With assistance from Jing Zhao. This article was generated from an automated news agency feed without modifications to text.
Bloomberg
26-06-2025
- Business
- Bloomberg
FX Trading Insights: Performance Strategies to Optimize & Thrive
Join us for a dynamic, expert-led webinar delving into the latest trends shaping FX markets, trading analytics and transaction cost analysis (TCA) across asset classes. In a market that is seeing increased volatility, competition and unprecedented impact, we will hear from Bloomberg Intelligence on the new normal in the FX market. In the context of a market increasingly driven by technology, where execution tools like algos and automation are rapidly evolving, our specialist will share perspectives on FX and how traders and investors can enhance performance through effective TCA. Reserve your place now. Speakers Stephen Chiu, CFA Chief Asia FX and Rates Strategist Bloomberg Intelligence Stephen Chiu has over 15 years of experience in research and trading in FX and Rates. Stephen joined Bloomberg Intelligence's FICC team in 2019 and built out the Asia FX and rates coverage. He involves in expanding the company's global franchise heavily and he was promoted to Chief Asia FX and Rates Strategist in 2021. Prior joining Bloomberg, Stephen demonstrated his FX/rates trading and research expertise at Bank of Tokyo-Mitsubishi UFJ. (2010-2016) and advanced his FX research career at China Construction Bank (Asia) (2016-2019). Stephen holds a Bachelor's degree in Physics (First Class Honours) from the University of Oxford, a Master's degree in Finance (Distinction) from Imperial College London and a Chartered Financial Analyst (CFA) membership. Yerson Arvelo BTCA Product Manager Bloomberg Yerson is a Product Manager for the BTCA product. He has over 10 years of experience spanning a variety of roles within Bloomberg's electronic trading business, specializing primarily on Transaction Cost Analysis and Trade Surveillance. Yerson is currently focused on improving BTCA's FX product offering and enhancing the overall user experience.
Business Times
07-05-2025
- Business
- Business Times
Hong Kong dollar interest rate falls most since 2008 after intervention
[NEW YORK] The Hong Kong dollar's funding costs plunged the most since 2008, as the monetary authority's intervention to defend the currency peg helped boost liquidity in the financial system. The one-month Hong Kong Interbank Offered Rate declined 58 basis points to 3.08 per cent on Wednesday (May 7), the most since 2008, according to Bloomberg calculations. Easing interest rates will help reduce the appeal of purchasing the Hong Kong dollar and moderate appreciation pressure. The Hong Kong Monetary Authority (HKMA) stepped into the market to sell HK$129.4 billion (S$167 billion) worth of local currency against the greenback in four intervention operations since Friday, after the Hong Kong dollar reached the strong end of its 7.75 to 7.85 per greenback trading band. The HKMA interventions are also expected to drive up its aggregate balance, a measure of interbank liquidity, to HK$174.1 billion on May 8. That gauge was previously hovering near the lowest level since 2008, after the monetary authority sold US dollars to defend the peg in recent years. 'As the HKMA intervenes and inject liquidity, the short-end Hibors are bound to drop,' said Stephen Chiu, chief Asia FX and rates strategist at Bloomberg Intelligence. He expects the one-month and three-month Hibors to fall to 3 per cent and 3.3 per cent, respectively, assuming total Federal Reserve rate cuts of 50 basis points and if the aggregate balance reaches HK$300 billion this year. Additional cash in the banking system may also help alleviate the rising demand for cash in Hong Kong's capital market to subscribe shares of Contemporary Amperex Technology Co Limited, which is expected to be the city's biggest listing in years. It may also help support the city's economy in the face of steep US tariffs. The Hong Kong dollar edged down to 7.7544 per US dollar on Wednesday, further drifting away from the strong end of its trading band. Asian currencies have been gaining of late, as the US dollar sank on concerns over a US economic recession and amid hopes the global trade war may ease eventually. Like Hong Kong's authorities, Taiwan's central bank also intervened to limit the local currency's gains. 'With the fading of the US exceptionalism view and considering the market narrative of de-dollarisation, Hong Kong dollar strength will likely sustain for longer in 2025,' Raymond Yeung and Khoon Goh of Australia & New Zealand Banking Group wrote in a note, adding that 'The influx of capital into the Hong Kong market seems to be structural and is only in the early stages.' BLOOMBERG
Mint
06-05-2025
- Business
- Mint
Hong Kong Ramps Up FX Intervention to Defend Currency Peg
(Bloomberg) -- Hong Kong authorities ramped up sales of the local dollar as the greenback's slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority sold a record HK$60.5 billion ($7.8 billion) of the city's currency, according to an alert sent on its Bloomberg page Tuesday in Asia, after it tested the upper end of its trading band. That adds to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city's authorities to limit the currency's moves within its 7.75-7.85 per dollar trading band. Asian currencies are clocking in unprecedented gains on hopes the world's two largest economies will reach a truce on trade and as doubts over US exceptionalism pummel the dollar. Heavy sales of the local dollar by the HKMA helped dampen Hong Kong's borrowing rates that were elevated amid demand for the currency to subscribe shares of Contemporary Amperex Technology Co. Ltd, which is expected to be the city's biggest listing in years. Lower borrowing costs may also help shield Hong Kong's economy that's vulnerable to US tariffs. The HKMA's Hong Kong dollar sales 'may help buffer potential liquidity tightness at an upcoming IPO, together with other inflows,' said Frances Cheung, head of FX and rates strategy at Oversea-Chinese Banking Corp. She sees the currency peg resulting in a relatively soft Hong Kong dollar compared with peers in times of greenback weakness. Demand for Hong Kong dollars in the capital market has been high of late as Chinese investors poured money in Hong Kong stocks this year. Currency conversions related to dividend payments by Chinese companies listed in Hong Kong added to demand for the local currency. Before Friday, the last time the HKMA intervened to cap the currency's gains was in 2020. In comparison, it has stepped into the market in 2022 and 2023 to put a floor under the currency when it threatened to breach the weak end of its trading band. Hong Kong set up the currency peg in 1983 to arrest a plunge triggered by concern over talks to hand over the British colony to China. The trading band was widened in 2005 to what it currently is. The recent HKMA interventions are also expected to drive up its aggregate balance, a measure of interbank liquidity, providing more firepower to authorities to defend the currency in episodes of weakness. The gauge was hovering near the lowest level since 2008, after the HKMA sold US dollars to defend the peg. The accumulated intervention amount this time around is likely to overtake the HK$383.5 billion recorded in 2020 after the Covid outbreak, Bloomberg Intelligence strategist Stephen Chiu and Chunyu Zhang wrote in a note. The one-month Hong Kong Interbank Offered Rate fell to 3.66% on Tuesday following HKMA's interventions, the lowest in two weeks. The recent rally in currencies of trade-dependent Asian economies is causing headaches for policymakers. While currency strength can help attract foreign inflows and make imports cheaper, it may hurt exporters by making their goods less competitive globally. The Taiwan dollar's surge by the most in four decades prompted the island's central bank to say on Monday that it would step into the foreign-exchange market if stability was threatened. As for the Hong Kong dollar, Citigroup Inc. expects HKMA interventions to continue. 'We expect further intervention on the strong side of the trading band given greenback weakness trend may have more room to run,' strategist Adrienne Lui wrote in a note. More stories like this are available on First Published: 6 May 2025, 12:10 PM IST
