ASIA FX: USD/Asia Pairs Mostly Ticking Higher With Firmer US Yields
Feb-26 05:46
Asia currencies are mostly holding lower against the USD. In NEA, CNH has edged down, while KRW is away from best levels against the USD. USD/IDR is threatening an upside test of 16400, while THB has also softened ahead of the BoT later.
- USD/CNH has risen back to 7.2600, but remains sub yesterday's highs above 7.2700. Local equities are tracking higher, albeit with a lower beta compared to Hong Kong moves. US Tsy yields have recovered some ground after the US House passed a budget measure, which could see tax cuts extended. Yen is around the weakest performer in the G10 space.
- USD/KRW dipped sub 1430 early, but now tracks back in the 1433/34 region. Local equities are higher but broader USD gains, including against higher beta FX, is likely a constraint.
- USD/IDR got close to 16400 in early dealings, but sits slightly lower now. We continue to see offshore outflows from local equities, while 5yr CDS levels are also tracking higher.
- USD/THB is continuing to recover ground ahead of the BoT decision later. We were last in the 33.75/80 region, off around 0.25% in baht terms so far today. The sell-side consensus for the BoT decision later is no change, although some forecasters are projecting a 25bps cut. Market pricing has the policy rate 2.00% in 3 month time and around 1.75% in a year's time. • Hence a cut may not drive a huge THB reaction. US-TH government bond yields are just up from recent lows, close to +211bps. Local equities remain very weak, albeit modestly higher today.
- USD/PHP is steady, last near 57.90. The BSP stated yesterday it would manage volatility in PHP spot and forwards (including through swaps). This steady trend leaves PHP a modest outperformer so far today.
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Historical bullets
ASIA STOCKS: China Up Before Lunar New Year Break.
Jan-27 05:15
- Following the news last week of new measures to encourage equity investment, and mixed economic data, most China markets continued to rally ahead of the Lunar New Year holiday.
- Hang Seng lead the way again up +0.95%, CSI 300 +0.13%, Shanghai +0.30% and Shenzhen was the outlier down -0.60%. Taiwan had a good day up +0.9%
- Malaysia’s FTSE KLCI had a tough finish to the end of last week and continued in a similar trend today down -0.34%.
- Korea’s KOSPI had the dual impact of news that the president is being charged and the impact that DeepSeek is having on tech markets, yet the KOSPI was up +0.85%.
- India’s NIFTY 50 is opening up weak, down -0.97%.
- With Jakarta out, Singapore and Thailand were both marginally weaker, down -0.20%
GOLD: Gold Trends Down in Asia As Tariff Risk Heightens.
Jan-27 04:56
- Gold has had a stellar start to 2025 and last week delivered the best weekly gains thus far.
- Gold gained +2.4% last week driven by a ‘safe-haven’ bid in the face of mounting tariff risks.
- This week has started no differently with news that President Trump intends to levy up to 25% tariffs on Colombia following the turning away of a flight from the US, deporting illegal immigrants.
- Gold closed Friday at US$2,770.58 and has given some of that back in early trading, down to $2,767.00 at the open and falling throughout the day to $2,758.28.
- Over the weekend Ghana’s released it’s trade surplus details, rising US$5bn, driven by a 50% increase in gold exports to $11.6bn.
ASIA STOCKS: Asia Stocks: Light Flows Across Holiday Period
Jan-27 04:52
Taiwan enjoyed strong inflows with Korea as outflows elsewhere.
- South Korea: Recorded inflows of +$240m Friday, bringing the 5-day total to --$506m. 2024 to date flows remain are -$218m. The 5-day average is -$101m, the 20-day average is -$10m and the 100-day average of -$149m.
- Taiwan: Had inflows of +$537m as of January 22nd, with total inflows of +$2264m over the past 5 days. YTD flows are negative at -$1261m. The 5-day average is -$71m, the 20-day average of -$71m and the 100-day average of -$111m.
- India: Saw outflows of -$354m as of the 23rd, with a total outflow of -$2283m over the previous 5 days. YTD outflows stand at -$6814m. The 5-day average is -$457m, the 20-day average of -$379m and the 100-day average of -$108m.
- Indonesia: Posted outflows of -$35m , bringing the 5-day total to -$57m. YTD flows are negative at -$223b. The 5-day average is -$11m, the 20-day average is -$8m the 100-day average of -$2m.
- Thailand: Recorded inflows of +$38m as of Friday, totaling -$23m over the past 5 days. YTD flows are negative at -$246m. The 5-day average is -$5m, the 20-day average of -$12m the 100-day average of -$10m.
- Malaysia: Experienced outflows of -$69m Friday, contributing to a 5-day outflow of -$158m. YTD flows stand at -$587m. The 5-day average is -$32m, the 20-day average of -$29m the 100-day average of -$22m.
- Philippines: Saw outflows of -$19m yesterday, with net outflows of -$34m over the past 5 days. YTD flows are negative at -$115m. The 5-day average is -$7m, the 20-day average of -$6m the 100-day average of -$2m.
