HK Equity Losses Curbs CNH Gains, THB & PHP Hit Multi Month Highs

USD/Asia pairs are mixed. CNH has been steady, with HK equities down sharply helping to curb gains against the USD. THB and PHP have both gained ground, hitting fresh multi month highs for both currencies. TWD is also firmer, threatening a test of 100-day EMA support. USD/HKD is below the mid-point of the peg band. The early focus next Monday will be on 1yr (3.45% currently) and 5yr (4.20% currently) LPR decisions from China, although no change is expected. Thailand Q3 GDP is also out Monday.

• USD/CNH has tracked a tight range today. The pair last near 7.2500, little changed for the session (range has been 7.2441 to 7.2551). weaker HK equities, due to Alibaba weakness, as the company has canceled plans to spin off its cloud business due to US export retractions has weighed. Comments crossed earlier today from Xi around steps to attract foreign investment flows into China and make it easier to do business in China (BBG).
• Spot USD/HKD is through the mid-point of the HKMA peg band. The pair last near 7.7965, fresh lows back to the start of August (lows at 7.7926). Beyond that, December lows from last year rest near 7.7600. On the topside, recent highs come in at 7.8107, while the 20-day EMA is around 7.8130.• We continue to see downside in relative yield spreads, aiding HKD sentiment. The US-HK 3 month spread is now back to -4bps, also near early August lows.
• USD/TWD spot sits sub 31.90 in latest dealings, fresh lows back to mid September for the pair. We are close to 100-day EMA (near 31.87), a support level we haven't breached since the first half of 2023. The TWD has benefited from a sharp rise in offshore equity inflows this past week, nearly $3.5bn. Inflows have been supported by lower US real yields, which has aided tech related equity sentiment more broadly. Sentiment has also been aided post yesterday's Xi-Biden leaders summit, where the China leader dialled back concerns around China military action against Taiwan.
• The SGD NEER (per Goldman Sachs estimates) has ticked lower this morning, the measure printed a fresh cycle high yesterday as US Tsy Yields ticked lower. We are ~0.3% below the top of the band. On Thursday USD/SGD printed its lowest level since early August as the aforementioned downtick in US Tsy Yields weighed. The pair is holding below the $1.35 handle this morning last printing at $1.3480/85. A reminder that early in today's session October Export data crossed. Non-Oil Domestic Export rose 3.4% M/M, a touch firmer than the estimated 2.0%. Electronic Exports fell 5.6% Y/Y.
• The Ringgit has opened dealing a touch above yesterday's closing levels, ranges remain narrow in a steady start to Friday's dealing. Thursday's fall in US Tsy Yields is marginally weighing on USD/MYR. USD/MYR prints at 4.6840/60, ~0.1% lower today.
• The Rupee has opened dealing little changed from yesterday's closing levels in a steady start to Friday's dealing. USD/INR sits at 82.27/28. The RBI has asked Indian banks to increase buffers for some consumer loans as it looks to limit a rise in risky debt (BBG). Risk weights on consumer credit will be raised by 25 percentage points to 125%, the RBI said in a statement Thursday. The decision excludes mortgages, loans for education and cars, and debt backed by gold. RBI's Das noted that unsecured loans are rising almost twice as fast as overall credit.
• USD/THB has fallen sharply in the first part of Friday trade, the pair down nearly 1.0% to 35.10/15. This is lows in the pair back to early September. We sit slightly higher now 35.17. A break sub 35.00 could see late August lows at 34.835 targeted. Baht looks to be broadly following dollar trends, in line with the pullback in US yields. However, baht has outperformed over the past week (THB +2%, BBDXY -1.25%). The sharp pull back in oil prices is likely being seen as a positive for THB. The Citi THB terms of trade index is at multi month highs, albeit still in negative territory.
• USD/PHP has broken down to fresh lows back to early August. The pair last near 55.64. We are sub all key EMAS, with the 200-day nearest to current spot levels at 55.94. Today's spot move has also pierced the simple 200-day MA (55.69). Note early August lows were sub the 55.00 level. Yesterdays on hold BSP outcome hasn't impact PHP sentiment negatively. The softer tone to US yields, coupled with lower oil prices, remain clear PHP positives.