Narrower Trade Surplus Dents KRW, Most Regional PMIs Remain Robust

Market closures in mainland China, Japan, Thailand, and Vietnam sucked liquidity from Asia EM space as this week's trading went underway. Manufacturing PMI surveys from across the region & local Covid-19 developments took focus in holiday-thinned trade.

• CNH was biased lower vs. the greenback amid tight liquidity conditions, with USD/CNH moving further away from two-month lows printed last week. There was no PBOC fix today, with the next one coming up Thursday, when onshore Chinese markets re-open.
• KRW sold off after South Korea's trade surplus shrank to $388mn in Apr from $4.132bn recorded in Mar, in a considerable miss of the $3.105bn consensus forecast, on the back of a beat in imports growth. Expansion in the local m'fing sector moderated, but remained robust. South Korea's 13-month ban on short-selling stocks has expired today.
• INR as the surge of new Covid cases continued to cripple India. PM Modi suffered a major setback in India's latest state elections, as voters signalled their frustration with the gov't's handling of the pandemic.
  
• IDR and MYR declined broadly, even as crude palm oil futures surged in Kuala Lumpur. The ringgit was undermined by concerns over the local Covid-19 situation, which prompted PM Muhyiddin to scrap his planned visit to Singapore for talks on gradual re-opening of bilateral travel. Indonesia's CPI marginally missed forecasts, while M'fing PMIs in both countries remained in expansion.
• PHP was rangebound, even as the Philippines was the only country in the region whose Markit M'fing PMI slipped into contraction in Apr. The disappointing data came on the heels of stricter lockdown restrictions implemented in the capital region.
• Little to write home for SGD & TWD, with both posting marginal losses vs. USD. Taiwan's M'fing PMI printed at the strongest level in more than a decade.