EM Asia Pressured Ahead Of FOMC

Most Asia EM FX declines as markets await the FOMC decision later today.

• CNH: Offshore yuan weaker, but off worst levels. Asian Development Bank (ADB) released a report today that forecasted China's GDP to surge this year despite persistent uncertainties over the pandemic. A story in the FT said that China is set to report its first population decline since the People's Republic was founded in 1949. This could have significant implications for China's economy
• SGD: Singapore dollar weakened slightly, market looks ahead to the Q1 unemployment rate which is scheduled to hit today, but has no fixed time. The rate is expected to have dropped to 3.0% from 3.3% previously.
• TWD: Taiwan dollar bucks the trend, strengthening further after two consecutive closes below 28.00. A strong electronics export sector and prospect of less intervention from the central bank has given TWD bulls confidence.
• KRW: Won is weaker, reversing yesterday's post-GDP strength. In a worrying sign South Korea reported 775 daily new coronavirus cases in the past 24 hours, the highest in four days and nearing 800, and the proportion of untraceable infections hit the highest point ever amid concerns of another wave of the pandemic. Weakness was tempered by strong consumer confidence figures.
• MYR: Ringgit is weaker, Malaysia left existing curbs on interstate travel in place, extended the CMCO in Kuala Lumpur, Selangor, Sarawak, Johor and Penang through May 17 and decided to raise the level of restrictions in Sabah to CMCO from the lowest RMCO from Apr 29. Sabah's Local Gov't and Housing Min said that inter-district travel will still be allowed, based on a system of zones.
• IDR: Rupiah has fallen, little to pen on notable domestic developments, headline flow has been sparse. Kompas cited State Sec Pratikno as noting that the new Investment Ministry will not replace the Indonesia Investment Coordinating Board and Bahlil Lahadia will remain at the helm of the agency.
• PHP: Peso is on heavier footing. The Presidential Palace said that determining the next quarantine status of the NCR+ bubble will be a "difficult decision" for Pres Duterte. He is scheduled to deliver an address on the matter today, following yesterday's deliberations of the Philippine Covid-19 task force.
• THB: Baht is weaker, Thailand's main Covid-19 task force chaired by PM Prayuth meets today to consider stricter measures to arrest the spread of new Covid-19 infections. Tuesday saw the Cabinet give a nod to a temporary transfer of certain prerogatives to the PM to allow him to make swift decisions on new restrictions, as the nation scrambles to contain the deadly virus.