Most USD/Asia Pairs Lower, CNH Steady As China's NPC Comes Into Focus

Most USD/Asia pairs are lower, albeit to varying degrees (IDR the main exception). We do sit mostly above earlier lows though. This fits with the majors against the USD, which have lost ground as the session progressed. Equities are firmer, particularly in Taiwan and South Korea, but trends are a little more mixed elsewhere. Looking ahead to tomorrow, China's NPC will be in focus. The China Caixin Services PMI for Feb also prints. South Korea GDP Q4 revisions are also on tap, along with the Thailand and Philippines CPIs. The Indian services PMI is also out.

• USD/CNH hasn't drifted too far away from the 7.2100 handle. The trend from China/HK equities has been relatively muted to start the week, as the market awaits the China NPC. No 'big bang' stimulus is expected, particularly for the property sector. Growth expectations sit close to 5%, but how this achieved via fiscal and monetary stimulus is likely to be a key focus point for markets.
• 1 month USD/KRW tried to go lower in early trade, but there was no follow through. We couldn't test meaningfully sub the 1326 level. The pair last tracked above 1328. Onshore equities have held strong gains for much of the session (+1.3%), but there has been limited spill over to KRW. Data was mixed with IP and the PMI in focus. IP y/y growth looks solid, while the PMI eased, but remains above the 50.0 expansion/contraction point.
• Spot USD/MYR slumped in early trade, hitting fresh lows under 4.7200, but we now sit higher, last near 4.7300. Comments from Malaysia's Financial Markets Committee (FMC), crossed late on Friday local time. The body noted that coordination between the government and central bank had encouraged repatriation inflows, particularly from state-owned firms, in terms of offshore earnings (BBG). Such a backdrop may be lending more support to MYR today.
• Thailand’s economy continues to underperform the region and the February S&P Global manufacturing PMI and business sentiment signal that the undesired situation continued into Q1. The government has been putting pressure on the Bank of Thailand (BoT) to cut rates to stimulate the lacklustre economy but the central bank has responded that structural problems are the cause, which monetary policy cannot impact. USD/THB sits above session lows, last near 35.84, around 0.30% stronger in baht terms. Recent moves above 36.00 have continued to draw selling interest.
• USD/IDR spot has drifted higher, the pair last near 15720. This is only a modest USD gain, but has generally bucked the trend seen elsewhere in the region. We did see firmer offshore buying into local bonds last Thursday but this hasn't shifted sentiment. Modest equity outflows continue.