MARKET TALK: AUD/USD At Low End Of Day's Range

	[Call Us: NY 201 938-2085, London 44-20-7842-9302, Singapore 65-6415-4140] 0428 GMT [Dow Jones] AUD/USD at low end of day's range as USD generally drifts up before FOMC outcome, says CBA's Alex Schuman; 25bp Fed hike expected by everyone, big question is tone of post-meeting statement. Schuman says if statement not overly hawkish, USD may fall, helping AUD; but for now AUD/USD wedged in 0.6800-0.7000 range and "it's hard to see what will shake it out". Pair last at 0.6887.(MLS) 0427 GMT [Dow Jones] USD/SGD, like other USD/Asians, quietly traded in narrow band before FOMC outcome; Singapore dealer notes pair stuck in 1.7150-1.7170 range in Asia and this likely to hold rest of day, with USD/JPY drifting around 108.60. Initial resistance at 1.7180-90, support at 1.7120-30; last at 1.7163. (RNH) 0421 GMT [Dow Jones] Association of German Mortgage Banks Managing Director Otmar Stocker in Tokyo today marketing to Japanese investors benefits of German covered bonds, which backed mostly by mortgages. But it's a tough sell, according to head of sales in Tokyo at HVB, as bonds offer spreads of only about 15 bps over bunds, while Japan investors still favor U.S. market when buying foreign bonds as U.S. yield curve steeper than Europe, FX hedging costs lower. (ILM) 0419 GMT [Dow Jones] USD/JPY edges up as players who've been selling since last week on expectations of modest Fed rate hike, similar FOMC statement, JPY-bullish BOJ tankan look to minimize some of their exposure as events draw near, says Japan brokerage trader; immediate resistance at yesterday's high of 108.77, which will likely hold as moves restricted to position adjustments. Pair now at 108.63.(MXT) 0417 GMT [Dow Jones] Japan housing starts, due 0500 GMT, expected +0.1% on-year in May, finds Dow Jones/Nikkei poll; would follow unexpected 4.1% fall in April after 4-month run of increases. Modest rebound would suggest consumers growing more willing to snap up big-ticket items; data yesterday showed consumers bought more durable goods last month, such as TVs, PCs, furniture.(TAN) 0412 GMT [Dow Jones] EUR/USD still has neutral short-term outlook on charts, writes Citigroup; consolidation since June 14 low of 1.1950 indicates bear flag pattern, but any clear rise above 1.2180 would shift outlook to bullish, targeting 1.2355, then 1.2600. Initial major resistance at 1.2192-1.2221, support at 1.1950; now 1.2088. (RNH) 0409 GMT [Dow Jones] Korea credit card delinquency ratio falls for third month in row to 11.68% end-May vs 11.91% end-April, financial watchdog says; but news hardly inspiring as decline a result of issuers' efforts to scale back card loan services, stricter guidelines for issuing new cards, rather than improving business environment.(SCC) 0402 GMT [Dow Jones] USD/TWD at 33.768 midday, almost unchanged from yesterday's 33.767 as USD/JPY off early-morning lows, says foreign-bank trader; "there is not much indication aside from dollar/yen, and activity is thin." Market to stay quiet before FOMC statement, with 33.73-33.80 band for afternoon.(PEL) 0401 GMT [Dow Jones] Yen interest rate swaps yield curve flattens from short to medium-term zone, but steepens beyond medium-term; stabilizing of JGB yields prompting players to cover pay positions, mainly in medium-term zone, which they had created previously to hedge future rises in rates, traders say; 2-year swaps down 1.25 bp at 0.26125%, 5-year swaps drops 3.875 bps at 0.9375%, 10-year swaps 3.50 bps down at 1.86%. Overall trade quiet as players sidelined before FOMC results later, BOJ tankan tomorrow. (HM,MXS) 0400 GMT [Dow Jones] Fact that S&P raised its outlook on HK's rating to stable yesterday, just before tomorrow's pro-democracy march shows its confidence that political disputes won't affect economy; few analysts think demonstration, expected to attract about 300,000 people, will cause any financial turmoil. S&P expects that "prudent financial management and good economic prospects will be isolated from political developments...the 'democratic' camp in Hong Kong seems unlikely to hinder responsible economic and financial policies." (AGB) 0353 GMT [Dow Jones] Fitch says Philippine Arroyo's presidential poll win eases political uncertainty, but warns on failure to address debt woes of state utility Napocor; "the failure to exploit the improved political backdrop by making headway on fiscal policy tightening could see...rating strengths start to wither again, following the downgrade in 2003,"" says senior director Brian Coulton. Government expects to fully privatize Napocor in 2 years. Fitch rates Philippines sovereign foreign debt "BB" with stable outlook. (SFL) 0348 GMT [Dow Jones] Taiwan central bank sells NT$50 billion worth of NCDs/CDs - 14-day paper at 0.975%, 30-day at 1.05%, 182-day at 1.075% and 364-day at 1.225%. Average interbank overnight rate at 1.016% vs yesterday's 1.017% but likely to fall further on more than NT$80 billion worth of paper expiring over rest of week. (PEL) 0338 GMT [Dow Jones] USD/KRW higher at 1152, tracking USD/JPY - "The dollar/won rose after the dollar/yen rose to the 108.50 level from 108.40," says trader at local bank. Exporters also not selling actively as "the level is quite low." Range pegged at 1,148-1,153 for rest of session vs 1,151.9 previous close.(INK) 0334 GMT [Dow Jones]] Taiwan government bonds higher on gains in U.S. Treasurys overnight, but unlikely to rise further as investors generally cautious ahead of Fed's rate verdict; "We are not only waiting for the Fed's rate decision, but also what it says about the economic outlook," Chinatrust trader says. Yield on most active 10-year issue 2.939% vs previous close 2.9665%.(PEL) 0331 GMT [Dow Jones] KLCI +0.4% at 826.28, supported by gains in blue chips and index-linked issues, as local funds window-dress books for 1H closing, says trader. But gains unlikely to hold, he warns, as investors may opt to book profits. "Any rally will be purely as a result of window dressing. (KLCI) breaching 830 is unlikely as retail investors will switch to cash" ahead FOMC decision on U.S. interest rates tonight, he adds. Volume thin 87.8 million shares worth MYR171.3 million; falls lead rises 261 to 192, 247 flat, 566 untraded. (VGB) 0325 GMT [Dow Jones] USD/CNY flat at 8.2766, trading in narrow 8.2765-8.2767 range; pair could fall later as traders say there are more sale than buy orders in pipeline. USD/CNY 1-year NDF bid/offer discount narrows slightly to 1725/1650 from 1780/1700 late yesterday afternoon. EUR/CNY lower at 10.0060 from 10.0738; HKD/CNY falls to 1.0607 from 1.0609. No trades yet in JPY. (LYL) 0324 GMT [Dow Jones] Thai shares last up 1% at 656.30 on continued buying interest in blue chips; heavy foreign buying in recent sessions inspiring players to buy more shares, says Bualuang Securities strategist. Bank stocks in focus on hopes of improvement in 2Q earnings, due late-July; Siam Commercial Bank up 1.1% to THB47.50, Bangkok Bank also up 1.1% at THB94.50. Resistance pegged at 660.(SSU) (END) Dow Jones Newswires June 30, 2004 00:29 ET (04:29 GMT)