UPDATE: USDINR breaks above 64.00 (20% devaluation in 3 months)
Hot money outflows continue to crush most of Asia's currencies this evening led by Indonesia's Rupiah (-1.7%) and Indian Rupee (-1% to a new record low). From the Won to the Ringgit, the USD is bid and now trades at its strongest relative to Asian FX in 13 months. Equity markets are not faring any better as that leveraged carry is eliminated. Indonesia's Jakarta stock index is down 4.66% today (-12.4% From Thursday's close); India's Sensex is -1.6% today (-7.2% From Thursday's close) with Thailand and China's Hang Seng close behind with losses over 1.5% on the day. Even the Nikkei (in spite of JPY weakness) has given back all its early gains (after getting back to even from US day session futures losses). JGBs are modestly bid but EM bonds are getting slammed (India's 10Y +23bps to new 12-year high yield of 9.47%). But apart from all that, the markets are fine...
The USD is surging against Asian FX markets as everyone except China is fading notably overnight...
Asian Equity markets are suffering just as badly...
and EM bonds are getting hammered again...
As a reminder, US Treasury vol is now at its +5vol 'limit' differential to JGB vol - the last 5 times we have reached this extreme the differential has collapsed rapidly (i.e. either TSY vol drops or JGB vol surges).
