Mixed Trends Despite Further China Stimulus Talk

USD/Asia pairs have been mixed today. USD/CNH hasn't been able to build downside despite further talk of stimulus measures/rebound in May lending figures. SEA FX has seen some weakness, most notably THB and MYR as onshore markets have returned from holiday's yesterday. Tomorrow the focus will be on China May trade figures, while Taiwan trade figures are also out.

• USD/CNH has tried to go lower on a number of occasions today but hasn't seen much follow through. The pair was last at 7.1180/90, having seen a range of 7.1306 on the topside and 7.1063 on the downside. Property stimulus talk is again present, but this has done more for HK equities, rather than China equities, at least at an aggregate level. A meeting between US and China foreign ministry officials also suggests some thawing in tensions but there wasn't much market impact.
• USD/KRW 1 month has generally traded with a negative bias, although onshore markets have been closed today. The pair was last around the 1296/97 region. Better HK sentiment has aided the won, while the A$ post the RBA hike has also likely helped. Further prospects of China stimulus, per onshore media reports will also be a factor. The 1 month NDF is now sub its 100-day MA.
• USD/INR is dealing ~0.1% softer printing at 82.55/60 the pair has pared some of Monday’s losses as broader USD trends dominate. The pair remains in a technical up-trend, bulls look to target a break of the 83 handle. The RBI intervened in the FX market earlier in the year when we came close to the handle. Foreign Investors bought a net of $78.1mn of Indian equities on June 2, this was the 26th straight day of equity inflows. On the wires yesterday S&P Global Services PMI for May printed at 61.2 ticking lower from the prior read of 62.0 which was the cycle high of the index. Composite PMI held steady at 61.6.
• USD/MYR deals at 4.5950/80 the pair is ~0.4% higher today, onshore markets were closed yesterday for the observance of a national holiday. The ringgit has unwound some of Friday's gains as broader USD trends dominate flows. Palm Oil futures are pressured this morning, re-opening after being closed on Monday. The contract is down ~1.6% unwinding some of the gains seen late last week as we recovered off cycle lows. Malaysia PM and Finance Minister Ibrahim noted that the fiscal deficit must be reduced but not too drastically. Also saying that Malaysia's stance on raising interest rates is thorough and prudent.
• The SGD NEER (per Goldman Sachs estimates) is marginally firmer this morning, we remain well within recent ranges. We now sit ~0.8% below the upper end of the band. On the wires this morning the S&P Global Singapore May PMI ticked lower to 54.5 from 55.3. There was no estimate for the print and we remain comfortably within expansionary territory. USD/SGD prints at $1.3490/95, the pair fell below the $1.35 handle yesterday and has consolidated in a narrow range below it this morning. The pair sits between the 200-Day EMA ($1.3511) and the 20-Day EMA ($1.3459).
• Thailand markets have returned today, with USD/THB spiking back towards recent highs, the pair last in the 34.75/80 region. This is 0.6% weaker in baht terms versus closing levels from last Friday. This weakness is a little at odds with broader USD index trends in recent sessions. Recent highs come in close to 34.90, while the simple 200-day MA comes in at 35.20. On the downside the 50-day MA is back near 34.28. Headline CPI inflation for May came in well below forecasts at 0.5% y/y from 2.7% in April due to fuel and food prices and negative base effects. Inflation shot up in May 2022 to 7.1% y/y from 4.6%. Core CPI was more stable at 1.6% y/y down from 1.7%.