Asia FX Rallies, But Sits Away From Best Levels

USD/Asia pairs are lower across the board, albeit up from session lows. The best performers have been KRW, THB, IDR and MYR. USD/CNH tested early September lows sub 7.2400, but sits higher in latest dealings. Regional equity sentiment has been buoyant, while China's strong 1yr MLF liquidity injection was also notable amid mixed Oct activity figures. Still to come today is India Oct trade figures. Tomorrow, new China home prices are out, along with the BSP decision in the Philippines, no change expected.

• USD/CNH briefly touched lows sub 7.2390 (low at 7.2384), before moving back above 7.2470. This was fresh lows back to early Sep. We last tracked near 7.2450. Onshore equities are off earlier highs as the market continues to digest the early spike in 1yr MLF liquidity and whether it means less rate/RRR cuts going forward. October activity data was mixed, with retail sales better, but property headlines evident elsewhere.
• 1 month USD/KRW got to lows near 1295, but is tracking higher in recent dealings, last near 1298. Spot is still 2.20% firmer for the session. Offshore inflows into local equities have been present. The Kospi sits +2% higher, just off session highs.
• The Rupee has opened dealing on the front foot as participants digest yesterday's US CPI print and the softening in US Tsy Yields. USD/INR prints at 83.06/07 ~0.3% below Monday’s closing levels. On the wires this afternoon is the October Trade Balance, a deficit of $20.4bn is expected. The prior read was $19.37bn deficit.
• The Ringgit is firmer this morning as participants digest yesterday's US CPI print and the downtick in US Tsys Yields. USD/MYR is down ~1.2% last printing at 4.6585/4.6620. Looking ahead; the docket is empty until Friday's Q3 GDP print, a rise of 3.3% Y/Y is expected. Q3 Current Account Balance is also due.
• The SGD NEER (per Goldman Sachs estimates) printed a fresh cycle high this morning as participants digested yesterday's US CPI print before paring gains to sit a touch softer at typing. We are ~0.4% below the top of the band. USD/SGD fell ~1% yesterday, as US Yields fell after a soft CPI print, breaching the 200-Day EMA ($1.3547) and the $1.35 handle. In early trade today we sit close to post-US CPI lows at $1.3480/85.
• USD/THB has fallen sharply, getting to 35.45, before edging back to 35.50 this afternoon. We are above early Nov lows near 35.40. Thailand’s new government is going to persist with its digital wallet handout election promise despite criticisms and fears that it will boost inflation and go against fiscal rules. PM Srettha’s chief of staff Prommin has said that it is important to boost soft economic growth, according to Reuters.
• USD/IDR is up slightly from session lows, last near 15510. Earlier lows were at 15475. Indonesia’s October trade surplus widened moderately to $3480mn from $3405mn, the highest in six months, due to export growth improving more than imports.