CNH Unmoved By NPC, Modestly Higher USD/Asia Levels Elsewhere

Some USD/Asia pairs are higher, amidst a weaker regional equity backdrop. However, follow through USD strength has been limited and we are away from best levels. CNH is close to unchanged, with NPC headlines broadly in line with market expectations. Tomorrow, we have South Korean CPI due, which is the main focus point for the session.

• USD/CNH hasn't drifted too far away from 7.2100 in another low vol session. China equities initially opened weaker, post early NPC headlines. However, we recovered into positive territory, albeit with fairly modest gains at this stage. A growth target of 5% was in line with market expectations for 2024, while the authorities vowed to keep the yuan basically stable. Government bond yields are lower, except for the 30yr tenor. Ultra long issuance, announced at the NPC (1 trillion yuan), may be a factor. Still, we are only 2bps higher.
• 1 month USD/KRW rose to 1332.75 amid local equity market losses, with tech sentiment coming under pressure amid a US government band on AMD chip exports to China. The Kospi sits off 0.70%, while the Kosdaq is down by 0.90%. Q4 GDP revisions were unchanged at 0.6% q/q.
• USD/IDR sits slightly higher, last near 15750. We sit just below recent highs just above this level. The pair remains is an uptrend versus lows from mid to late Feb sub 15600. Late Jan highs rest near 15850. The pair is above all key EMAs with the 20-day the nearest at 15672. Comments from President Elect Prabowo crossed earlier. The incoming President is very bullish on the growth outlook, stating growth can be at 8% within 4-5yrs. The fiscal deficit can rise to 2.8% from the current 2.5%, without breaching the 3% threshold. Comments from BI also crossed. The central bank sees a weaker USD in H2, which should pave the way for easier policy settings under BI's financial stability focused framework. This is in line with the rough sell-side consensus.
• Spot USD/PHP sits unchanged for the session in recent dealings, last near 55.97. We remain well within recent ranges, with key EMAs clustered near by. The 200-day is a little lower, back at 55.93. Late Feb highs printed near 56.32, which was reportedly driven by month USD demand. The earlier Feb CPI data hasn't shifted sentiment. It was firmer than expected, but core CPI continued to lose momentum in y/y terms.• After the print the BSP stated it is appropriate to keep policy settings unchanged (the next policy meeting is in early April), while noting base effects could keep inflation suppressed in Q1 but could re-accelerate in Q2 due to el nino effects.
• USD/THB sits a touch higher, last near 35.83, but the pair remains above recent lows. Feb inflation data was close to expectations, -0.77% y/y for headline, +0.43% y/y for core. The Commerce Ministry noted that March inflation may drop more (due to energy subsidies) before turning positive in May.