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Dollar goes down as do yields, yen

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1 year ago

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After last week’s clear-out in the bond market, investors are back to trading near-term rate expectations.

With an eye on Wednesday’s US inflation data, traders in Asia nudged both yields and the dollar a whisker lower on Tuesday.

Two-year and ten-year Treasury yields are back below 5% and 4%, respectively.

News aided stocks, with Alibaba (9988.HK) extending gains on hopes that a $984 million fine for Ant Group signalled the end of a years-long crackdown that has hammered the Chinese tech sector.

US Treasury Secretary Janet Yellen’s visit to Beijing seemed also to meet low expectations, with few signs that testy relations are getting better but also little suggestion they’re getting worse.

The yen is in the driver’s seat in foreign exchange markets, as investors pull back on high-yielding bets in emerging markets that have been funded by cheaply borrowed yen.

Such trades are placed by selling yen for dollars and then dollars for emerging-market currencies such as the peso or the real, so reversing them requires selling dollars for yen. The yen has risen to the strong side of 141 per dollar for the first time in three weeks.

Elsewhere in Asia the extension of a support package for China’s property sector helped Hong Kong developers. The Hang Seng (.HSI) rose 1.5%.

The events calendar is relatively bare until US CPI data on Wednesday and US earnings later in the week, although final German inflation figures and British jobs data are due later on Tuesday.

Economists expect UK unemployment to hold at 3.8%, which is likely to add upward pressure on wages and interest rates.

That seems to be lending speculative support to the British currency, with sterling longs near their highest in five years and the spot price touching a 15-month top in the Asia session.

Key developments that could influence markets on Tuesday:

  • British jobs data
  • Final German CPI

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Business

Irfan Siddiqui meets with the PM and informs him about the Senate performance of the parliamentary party.

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The head of the Senate’s Foreign Affairs Standing Committee and the PML-N’s parliamentary leader paid Prime Minister Muhammad Shehbaz Sharif a visit in Islamabad.

Senator Irfan Siddiqui gave the Prime Minister an update on the Parliamentary Party’s Senate performance.

Additionally, Senator Irfan Siddiqui gave the Prime Minister an update on the Senate Standing Committee on Foreign Affairs’ performance.

He complimented the Prime Minister on his outstanding efforts to bring Pakistan’s economy back on track and meet its economic objectives.

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Business

SIFC Increases Direct Foreign Investment: Investment in the Energy Sector Rises by 120%

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The Special Investment Facilitation Council is intended to help Pakistan’s energy sector attract $585.6 million in direct foreign investment in 2024–2025. The amount invested at the same time previous year was $266.3 million.

This is a notable 120% rise, mostly due to investments in gas exploration, oil, and power. Such expansion indicates heightened investor confidence and emphasizes the development potential in important areas.

The State Bank reports that foreign investment in other vital industries has increased by 48% to $771 million.

This advancement is a blatant testament to SIFC’s efficient investment procedure and quick project execution.

The purpose of the Special Investment Facilitation Council is to establish Pakistan as an investment hub by aggressively promoting regional trade and investment in the energy sector and other critical industries.

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Business

Discos report losses of Rs239 billion.

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When compared to the same period last year, the data indicates that discos have decreased their losses in the first quarter of the current fiscal year.

The distribution businesses recorded losses of Rs239 billion in the first three months of the current fiscal year, a substantial decrease from the Rs308 billion losses sustained during the same period the previous year.

Additionally, the distribution businesses’ rate of recovery has improved. It has increased to 91% in the first quarter of this year from 84% in the same period last year, indicating success in revenue collection.

Regarding circular debt, the Power division observed a notable change. Last year, between July and October, the circular debt grew by Rs301 billion. Nonetheless, this year’s first four months saw a relatively modest increase in circular debt, totaling about Rs11 billion.

These enhancements show promising developments in the electricity sector’s financial health in Pakistan, where initiatives are being made to accelerate recovery rates and slow the expansion of circular debt.

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