CNH Rallies On Potentially More Housing Market Support

USD/Asia pairs are lower across the board. A continued softer dollar backdrop against the majors has helped, while headlines of potentially more housing support in China has been another positive. Regional equity sentiment is mixed but hasn't weighed on risk appetite in the FX space. Still to come today is India's trade balance for April. Tomorrow, we have the BSP decision as the main focus point. No change is expected. Also out is South Korean money supply.

• USD/CNH sits close to session lows around 7.2230. We are around 0.20% stronger in CNH terms. Spot USD/CNY is also lower last just under 7.2250. Sentiment has been aided by headlines around potentially further China property support (per BBG). China is contemplating a significant proposal to address its struggling property market by having local governments purchase millions of unsold homes, with the aim of converting them into affordable housing. Local equity indices are down in terms of the aggregate but real estate indices are higher. Earlier, as expected the 1yr MLF was held steady at 2.50%.
• 1 month USD/KRW is lower, last around 1339, but remains within recent ranges for May so far. We are +0.35% stronger in KRW terms versus end NY levels on Tuesday. The 50-day EMA is around 1356.55 on the downside. A reminder that onshore markets are closed today.
• Spot TWD is around 0.50% firmer, last near 32.25/30, while the 1 month USD/TWD NDF is back to 32.165. We are trending back towards the 50-day EMA (32.14), which is a support zone which held in early May. Equity sentiment is positive amid recent tech gains (the Taiex is up 0.90% today). Offshore investors have added over $1bn to local shares this week.
• USD/THB had fallen to 36.50, but sits slightly higher in recent dealings. This is fresh lows back to mid April for the pair. Consumer confidence edged down in April, while the finance minister will meet with the BoT tomorrow to discuss different opinions on interest rates (per BBG).
• USD/PHP is back to 57.60/65, around 0.40%stronger, but the 1 month NDF has seen a more modest PHP gain. Tomorrow, we have the BSP decision but no change is expected.
• Spot USD/IDR is back towards 16080, around +0.20% firmer in IDR terms so far. April trade figures printed. Export and import growth were weaker than forecast, albeit still in positive y/y territory. The trade surplus eased back to $3559mn, from $4578mn in March.