PLN was boosted Tuesday after Poland applied for an IMF credit line and HUF jumped as the Hungarian parliament approved a new Prime Minister. However Capital Economics warns that "shifts in global risk appetite, not country-specific developments, remain the primary driver of financial markets in emerging Europe." Watch out for a renewed bout of selling if risk aversion spikes again, "and we believe there is a good chance it might," Capital Economics adds. EUR/PLN trades at 4.2804 from day's low of 4.24. EUR/HUF at 289.94 from 289.14 low.
Wednesday, February 25, 2009
PLN was boosted
Friday, February 20, 2009
keeping risk aversion on the rise again
It isn't only the economy that is keeping risk aversion on the rise again, says UBS. "The market remains concerned about the prospect of a default by a major US car manufacturer," the bank says, noting the manufacturer is running out of time to reach a deal with stakeholders and the federal government to restructure outside of bankruptcy. General Motors (GM) is currently in talks with stakeholders and the US government.
Monday, February 9, 2009
The South Korea won ended lower
The South Korea won ended lower Wednesday on weak risk appetite given Kospi's fall and foreigners' net-selling in the local stock market.
Overnight, key Wall Street indexes fell between 1.6% and 2%, setting the tone for risk-sensitive currencies such as the won.
"It looks like global stock markets could be in for further correction," said a local bank trader. And with offshore market players bidding up the dollar, the won could slide further, he said, and forecast the dollar to trade in a KRW1,320-KRW1,360 band Thursday.
Meanwhile, market talk that there could be fund-repatriation related to a potential sale of South Korean brewer, Oriental Brewery Co., by its owner Anheuser-Busch InBev NV (ABI.BT) also weighed on the won, said another local bank dealer.
Earlier in the month, people familiar with the situation said Anheuser-Busch would start a second round of the bidding process for its wholly owned Oriental Brewery some time in April.
Domestic treasury bonds and bond futures ended higher.
June bond futures ended 15 ticks up at 110.90.
Bonds have been weighed down in recent months on concerns over a potential oversupply due to the government's extra budget. But those worries faded somewhat after April's government auctions for three-year and five-year bonds went well and news Tuesday that Korea Securities Finance Corp. will buy between KRW2 trillion and KRW3 trillion of treasuries this year.
Although market views are split on how much more yields could fall, many analysts agree that the magnitude of losses will narrow.
Woori Investment & Securities analyst, Park Jong-youn, tipped yield support at 3.70% for the three-year bond and said "players should take this opportunity to take profits."
Hyundai Securities analyst, Kim Sang-hoon, said it would be difficult for yields to fall further from current levels.
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