PHP Firms Ahead Of BSP Decision, IDR Edges Down Post The Election

USD/Asia pairs are mixed in the first part of Thursday trade. PHP has been an outperformer ahead of the BSP decision later (no change expected). USD/KRW has tracked recent ranges, amid mixed equity trends. USD/IDR 1 month is higher post the election result, with Defence Minister Prabowo claiming victory. Tomorrow, we have South Korea trade prices and unemployment on tap, Singapore exports and Malaysian Q4 GDP.

• 1 month USD/KRW has gravitated higher but remains within recent ranges. The pair is last near 1331 after getting near 1328 in NY trade on Wednesday. Onshore equities have struggled to make fresh gains today, while offshore investors have sold $147.3mn of local shares so far.
• Taiwan markets have returned from the LNY break, surging by around 3% amid continued tech optimism. USD/TWD 1 month has drifted a little higher though, last a t31.36, in line with a generally firmer USD tone in recent weeks. Spot sits 0.20% weaker in TWD terms, near 31.41 in recent trade.
• Defence minister Prabowo has declared victory in Indonesia’s election. Polls leading up to the vote had him as the likely winner and that he would surpass the required 50% level, so the result is not a surprise. 1 month USD/IDR has drifted higher, last near 15635, weaker by around 0.3%, but well within recent ranges. Comments from an advisor suggested the new government will fine tune energy subsidies. Fiscal discipline will be a focus point for investors. On the data front, Indonesia’s January trade surplus narrowed to $2.0bn from $3.3bn as there was a sharp drop in exports growth of 8.1% y/y while imports rose moderately by 0.4%. The outcome was weaker than expected.
• Spot USD/PHP tracks at 55.97 as the BSP decision comes into view. Post US CPI highs in the pair came in around 56.33. On the downside recent dips sub 56.00 haven't proven sustainable. Note the 200-day EMA is near 55.91. We don't expect the BSP to shift policy rates or meaningful change their outlook around staying restrictive long enough to ensure inflation returns to target.
• Baht remains an underperformer within the EM Asia FX space, off 5.5% year to date, with MYR the next worst at -3.9%. USD/THB sits below earlier highs, last close to 36.11. Earlier we got to 36.18, which was fresh highs back to early Nov last year (Nov 1 high was 36.335). Local asset trends in terms of sideways equities price action are not helping THB. Portfolio flows are negative this week for equities (-$78.5mn) and just positive for Feb to date. Bond outflows have been more prominent (-$551.8mn).