瑞穗日报

Days to reciprocal tariffs:17(Temporary delay extended to 31 July)FXClose (NY)Daily %ΔUSDJPY147.72+0.20%146.00-148.50EURUSD1.1664▼0.21%1.1580-1.1780GBPUSD1.3427▼0.49%1.3400-1.3600AUDUSD0.6545▼0.50%0.6520-0.6640DXY98.1+0.23%97.0-98.2USDCNY7.1720+0.03%7.1600-7.2000USDCNH7.1723+0.01%7.1600-7.2100USDHKD7.8500+0.00%7.8300-7.8500USDSGD1.2821+0.14%1.2720-1.2900USDKRW1383+0.00%1370-1400USDTWD29.29+0.32%29.1029.50USDINR85.99+0.22%85.40-86.30USDIDR16245+0.21%16150-16300USDMYR4.254+0.00%4.230-4.280USDPHP56.66+0.31%56.10-56.90USDTHB32.39▼0.35%32.2-32.9USDVND26121+0.05%26050-26300*Open is as at 8am HKT/SGT.ForecastOpen*147.79FX OUTLOOK------1.16661.34281383--7.8499261220.65454.2561.28257.1730--32.47--HKD-Liquidity-HIBORMechanism:Dulled(byExcessLiquidity),NotDefective-RelentlesspressuresonHKDdespiteemphaticHKMAinterventionisnotasignofdefectivepolicybutdulledliquidity-ratestransmission.-Tobesure,HKDcontinuestobepressuredattheweaksideoftheHKDpeg(7.85)despiteasharpdrawdowninliquiditycorrespondingtotheHKMA’sintervention.Forcontext,someHK$72.3bnofliquidityhasbeenmoppedup(entailingequivalentHKMAintervention)sincelate-June.-Point being,despitea nearly42%drop in liquidity,the HKD hasbarelybudged.AndinsteadremainspressuredattheweaksideoftheHKDpeg.TheinstincttosuggestthattheHKMAisfacingastructuralissuewiththepegisunderstandablebutmisguided.-Instead,what’spertinentisthatanexceptional,almostfour-foldsurgeinliquidityinearly-May(tooverHK$174bninaggregatebalance)hasdulledtheinitialphaseofHKMAintervention.Specifically,solongasonshoreliquidity conditions remain“excessive”(compared to the~HK$45bnaverageoverthepasttwoyears),tighteningliquiditywillyieldlittletractiononHIBOR.-Whichispreciselythecasenow,whereaggregatebalanceataflushHK$100bn(wellaboverecentHK$45bn“norm”)desensitizesHIBORtoliquiditytightening.Hence,HIBORremainsdepressed(below1.9%)vis-à-viscorrespondingSOFRover4.3%.-Consequently,aggressive HKD-funded“carry trades”are notsufficientlydeterred.CertainlynotenoughtolifttheHKDmeaningfullyanddurably.OursuspicionisthatHKMAinterventionperhapsbegintohavemorebiteonceaggregatebalancefallstoHK$60-80bnrange.Imaginably,thesearelevelsatwhichmarginalliquiditydrainagehasgreatertransmissionto(lifting)HIBOR.-Ifso,marketsoughtnottogrowcomplacenttoHKMAinterventionasre-sensitized HIBOR over the next HK$20-40bn intervention couldjolt.TWD:IntenseScrutiny-The CBC in Taiwan has said that they have requested foreigninvestorsto"self-regulate"afterfindingsthatforeigncapitalinflowswerenotbeinginvestedindomesticsecurities.Thiswarningcomesaweekafter speculation that the CBC is considering a rule change forinternationalinvestorstoshowproofofordersbeforetheycanpurchaseTWD.Atthisjuncture,foreigninvestorsdonotneedproofoforderwhentheyconvertcurrenciesforplacingequitiesorders.-While there are substantial inflows of foreign buying of equitieswhichreachedalmostUS$17bnsinceend-April,thisinflowhasnotbeencommensurate with equities performance and certainly notentirelydrivingtheTWD'soutperformance.Theneedfortheauthoritiestoissue statement yesterday to continue stock market support alsoindicatesunderlyingcautionratherthanunbridledoptimismaboutequities.-Atthisjuncture,itiscriticaltocurbspeculativebehavioursespeciallywiththeTaiwanesedelegationdeclaringthattalkshaveenteredacriticalstagewhichmayyetagainseedpotentialforFXbeinginvolvedinthesetalks. ActualExp.Prior1.4%0.8%-0.6%5.8%/1.1%5.0%/0.3%4.8%/-3.4%2.1%2.3%2.8%4.4%5.2%6.6%-2.4%---1.8%ActualExp.Prior5.1%5.4%5.2%6.4%6.2%6.3%3.6%3.7%---0.2%/-0.5%3.6%4.0%2.6%/2.9%2.4%/2.8%50.447.5 RESEARCHTEAMVishnu Varathan | Serena Zhou | Tan Boon Heng | Tan Jing Yi MARKET COMMENTARY DISCLAIMERTHIS DOCUMENT IS NOT A RESEARCH REPORT AND IS NOT INTENDED AS SUCH.Unless stated otherwise in the country specific distribution information below, this document has not been prepared in accordance with legal requirements in anycountry or jurisdiction designed to promote the independence of investment research and is not subject to any prohibition ondealing ahead of the dissemination ofinvestment research. It is intended for informational purposes only and does not purport to make any investment recommendations.This document has been prepared solely for the information of the intended recipients. Recipients in any jurisdiction shouldcontact your usual Mizuho contact in relationto any matters arising from, or in connection, with this document.This document has been prepared by Mizuho Bank, Ltd., Singapore Branch (“MBSG”), a full bank, exempt capital markets services entity and exempt financial adviserregulated by the Monetary Authority of Singapore (“MAS”), Mizuho Bank, Ltd., Hong Kong Branch (“MBHK”), a licensed bank regulated by the Hong Kong MonetaryAuthority, with business address at 12/F, K11 Atelier, 18 Salisbury Road, Tsim Sha Tsui, Kowloon, Hong Kong, Mizuho Bank, Ltd.,Sydney Branch, an authorised deposit-taking institution regulated by the Australian Prudential Regulation Authority and holder of an Australian financial serviceslicence (“MBAU”),