Geopolitical Headlines Under Scrutiny

Participants continued to assess the fallout from Russia's attack on Ukraine. The news that the West would not be imposing some of the harshest sanctions against Moscow provided some reprieve to the EM space, while regional oil-tied FX were aided by rising energy prices.

• CNH: Spot USD/CNH has gone offered, paying little attention to a slightly softer than expected PBOC fix. The central bank boosted its short-term liquidity injection to net CNY290bn, the most since Sep 2020, amid tighter liquidity conditions into the month-end and market turmoil related to the Russian invasion.
• KRW: Spot USD/KRW remained rangebound, with participants on the lookout for further fallout from the geopolitical situation. South Korean FinMin said Seoul will join export controls on Russia and is currently debating the details. Elsewhere, PM Kim noted that the wave of Omicron infections is expected to peak in mid-March with daily cases around 250,000.
• Major palm oil exporters' currencies IDR and MYR firmed as the ongoing invasion on Ukraine has poured fuel on energy prices. The ringgit may have drawn some support from Health Min Sadikin's comment that officials are monitoring the situation to lift quarantine requirement.
• THB: The baht wavered, kept afloat on the back of the reprieve provided to risk assets by the announcement that the West will hold off on removing Russia's access to the SWIFT payments system.
• Philippine markets were shut in observance of a public holiday.