Cautious Tone, THB & PHP Unwind Some Recent Outperformance

Asian FX has been more cautious compared to the majors, where currencies (led by the A$) have firmed against the USD. The positive equity impulse and lower US Tsy yield backdrop hasn't done much to aid sentiment either (although yields are away from lows). Tomorrow, we have the BSP decision in the Philippines (+25bps expected), while the CBC in Taiwan is expected to keep rates unchanged. Singapore Feb inflation is also due.

• USD/CNH has spent most of the session drifting higher, albeit within recent ranges. We were last close to 6.8900, around 0.15% above NY closing levels. The CNY fixing was closer to neutral, while onshore equities are lagging the rest of the region. Northbound outflows have been seen so far today, the first after 7 straight sessions of inflows.
• 1 month USD/KRW has firmed, back near 1305/06, despite the better equity tone. Foreign investor flows have lagged the recent rebound in the Kospi, while USD/KRW and local equities correlation has been weaker in recent weeks compared to 2022.
• TWD has outperformed modestly, with spot USD/TWD back to the 30.50/55 level. The Taiex in +1.6% higher. The CBC is expected to keep rates steady at 1.75% tomorrow.
• The SGD NEER (per Goldman Sachs estimates) printed a fresh cycle yesterday before moderating gains, we are a touch firmer this morning. We currently sit ~0.6% below the top of the policy band. USD/SGD softened yesterday, printing its lowest level since mid-February. The pair broke below its 20-Day EMA on Monday and extended losses through Tuesday's session. This leaves USD/SGD at $1.3360/70, in line with yesterday's closing levels. Tomorrow's February CPI print headlines the week data-wise. The market expects headline and core pressures to remain elevated.
• USD/THB is down from earlier highs (34.56), last near 34.42, still around 0.25% weaker in baht terms for the session. A prominent sell-side name noted solid USD/THB buying throughout the NY session on Tuesday. This could reflect some nerves around the election (likely on the 14th of May), although outflows from Thai bonds were chunky at the start of the week. Equity outflows also continue, -$136.4mn week to date.
• USD/PHP has firmed in the latter part of trading, last near 54.69, back close to levels at the end of Monday. Recent support is evident sub 54.30. The BSP is expected to hike 25bps tomorrow.