EMERGING MARKETS – China Data, Fed Focus on Cautious Asia

In contrast, the Malaysian ringgit MYR= and Singapore dollar CAD= made meager gains.

Chinese stocks .SSEC hit a nearly two-month high and the yuan CNY=CFXS firmed 0.3% even though factory production data suggested the economy was in decline. Assets have rebounded in recent days after rising COVID-19 cases bogged them down earlier this month.

Emerging currencies rallied last Friday as the dollar lost ground after weaker US inflation data boosted expectations that the Fed could ease its pace of monetary policy tightening.

But some of those gains appear to be dissipating.

The green backed rose on Tuesday after Fed Vice Chairman Lael Brainard echoed comments from Fed Governor Christopher Waller over the weekend that rates needed to keep rising to fight inflation, albeit potentially at a slower pace.

“The market appeared to be dampening a bit after last week‘s CPI frenzy as FX flows were weaker and skewed towards taking profits from the dollar-strapped team,” said Stephen Innes, managing partner of SPI Asset Management, in a note.

In Southeast Asia, the central bank of the Philippines is set to deliver a huge 75 basis point (bps) rate hike, and Bank Indonesia (BI) is set to deliver a third consecutive 50 bps hike, according to Reuters polls.

Tuesday’s data also showed Indonesia’s trade surplus widened unexpectedly in October.

“The still thick trade balance confirms our view that Indonesia will not easily return to a negative current account balance. This should help BI not to be too hawkish,” said Fakhrul Fulvian, an economist at Trimegah Securities.

The Indian Rupee RNI=IN slightly lower after the country’s annual retail price inflation eased in October, prompting bets on lower interest rate hikes.

Actions in Malaysia .KLSE fell for the second day in a row and lost 0.6%, while Taiwanese stocks .TWII jumped for the third day and climbed more than 2.5%.

STRONG POINTS

** WRAPUP 2-G20 Summit opens in Bali with call for unity as war in Ukraine tops agenda

** FTSE Bursa Malaysia Kl index major losers include Hartalega Holdings HTHB.KL down 3.26%, Dialog Group DIAL.KL down 1.92%, Digi.Com DSOM.KL down 1.54%

**Singapore STI top winners include Mapletree Pan Asia Commercial Trust MACT.IF up 2.34%, Wilmar International WLIL.SI up 1.72%, Frasers Logistics & Commercial Trust FRAE.SI up 1.68%

Asian stock indices and currencies at 06:23 GMT

COUNTRY

FXRIC

DAILY FX %

FX YTD%

INDEX

DAILY STOCKS %

INVENTORY YTD %

Japan

JPY=

-0.38

-18.05

.N225

0.10

-2.78

China

CNY=CFXS

+0.28

-9.88

.SSEC

1h30

-14.18

India

RNI=IN

-0.20

-8.71

.NSEI

-0.17

5.44

Indonesia

RDI=

-0.33

-8.46

.JKSE

-0.02

6.63

Malaysia

MYR=

+0.16

-9.18

.KLSE

-0.62

-7.19

Philippines

PHP=

-0.19

-11.06

.PSI

0.55

-10.29

South Korea

KRW=KFTC

+0.55

-9.84

.KS11

0.08

-16.82

Singapore

CAD=

+0.02

-1.68

.STI

0.54

4.96

Taiwan

TWD=TP

+0.27

-10.77

.TWII

2.62

-20.16

Thailand

THB=TH

-0.06

-6.47

.SETI

0.25

-1.82

Graphic: world exchange rates https://tmsnrt.rs/2RBWI5E

Asian scholarshipshttps://tmsnrt.rs/2zpUAr4

(Reporting by Navya Mittal; Editing by Savio D’Souza)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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