Most USD/Asia Pairs Lower As Risk Appetite Starts The Week Tentatively Firmer

Most USD/Asia pairs are lower, with THB and MYR the standouts. Gains are more modest elsewhere, as overall sentiment remains cautious given Mideast risks and the Fed later this week. USD/CNH has drifted lower, but remains within recent ranges. Tomorrow, we have official PMIs for China, South Korean IP, Taiwan Q3 GDP and Thailand trade figures.

• USD/CNH has remained comfortably within recent ranges during today's session. We sit near 7.3280 currently, down slightly from opening levels near 7.3300. An earlier dip sub 7.3250 saw no follow through. Onshore equities are higher, albeit away from session bests. Focus is on the Financial Work Conference which kicks off today, with LGFVs and property the headline discussion points. Tomorrow, we have official PMI prints for October. Tentative signs of some improvement in US-China relations will be the other watch point.
• 1 month USD/KRW sits below opening levels (near 1354), last tracking close to 1351. An earlier dip sub 1350 was supported though. The won is benefiting from some outperformance by higher beta FX, as US equity futures are higher and oil prices lower to start the week. This reverses some of the trends seen at the end of last week. This keeps us firmly within recent ranges for USD/KRW. Local South Korean equities are outperforming modestly within EM Asia markets, the Kospi last +0.40% and holding above 2300. The index is only modestly above recent lows, but the correlation with the won has been strong with USD/KRW in recent months, -77% in levels terms for the past 3 months.
• The Rupee has opened dealing little changed from Fridays closing levels at 83.2550/2650 in a muted start to the weeks trade. On Friday USD/INR firmed above the 20-Day EMA, ranges remain narrow with little follow through on moves. Tomorrow the September Fiscal Deficit is released, Eight Infrastructure Survey also crosses. On Wednesday we have S&P Global Mfg PMI, and the Services and Composite components cross on Friday.
• Baht is the best performing Asian currency in Monday trade to date. USD/THB is down around 0.55%, last near 36.03 for spot (earlier lows were at 35.99). Some of this may reflect catch up to USD trends, although broader dollar indices aren't too different from where Thailand markets closed on Friday. In terms of technicals, we are very close to the 50-day EMA (36.01), which we traded meaningfully below since August of this year. The 100-day sits further south at 35.58, while the 20-day is at 36.32. Bond inflows were more positive at +$303mn last week, with signs the government is potentially tempering its fiscal support aiding sentiment in this space at the margin. Over the weekend, BoT Governor Sethaput Suthiwartnarueput stated the central bank will assess risks from the Middle East but the current stance of policy is appropriate (BBG).
• The Ringgit has opened dealing firmer on Monday, USD/MYR is ~0.4% lower. According to RBC, link here, authorities may have stepped in to reign in the currency’s weakness. The pair sits at 4.7540/65, the lowest level in ~2 weeks. S&P Global Mfg PMI for October is due on Wednesday. On Thursday the latest monetary policy decision from the BNM rounds off the week.
• The SGD NEER (per Goldman Sachs estimates) sits little changed this morning and remains well within recent ranges. The measure is ~0.5% below the top of the band. USD/SGD sits a touch below the $1.37 handle on Monday, ranges have been narrow in recent trade as the pair see-saws around $1.37. The MAS Chief Menon noted this morning that Singapore's monetary policy remains "appropriately tight" (BBG). There is a busy local docket this week. On the wires tomorrow we have September Money Supply, on Thursday the Purchasing Managers Index for October is due. S&P Global Mfg PMI for October and September Retail Sales round off the week on Friday.
• USD/IDR sits modestly off highs from the end of last week. Last near 15925, after getting to 15950 late in Friday trade. Earlier lows today were just under 15910, but had little follow through. This leaves us within recent ranges, as the market remains wary of intervention risks around 15960 and likely closer to 16000. This week we have CPI figures for October out on Wednesday. Little change is seen relative to September data in terms of these prints (core near 2%y/y, headline 2.6%).• Events outside Indonesia may dictate currency trends more forcefully, with markets watch Mideast developments closely. We ended last week with weaker sentiment, but the start of this week has had a more positive start to it in terms of US equity futures.