SGD, KRW Outperform As Local Monetary Authorities Stick To Global Tightening Trend

Thursday's Asia session was all about regional central banks as the BoK and MAS took tightening steps, while China State Council's rhetoric fuelled expectations of imminent PBOC easing.

• CNH: Spot USD/CNH wobbled just shy of neutral levels amid growing expectations of an imminent RRR cut. China's State Council called for RRR reduction "at an appropriate time," echoing rhetoric which had typically presaged prompt PBOC action.
• KRW: South Korean won held firm as the BoK raised the 7-Day Repo Rate by 25bp despite holding its meeting during an interregnum, with its Governor-in-waiting yet to attend his confirmation hearing. Economists were almost evenly divided, with one camp expecting a 25bp hike and the other looking for no change. The decision was unanimous as policymakers saw the need to curb inflation.
• SGD: Singapore dollar was the best performer in the region after the MAS tightened policy by tweaking the parameters of the S$NEER policy band. The Monetary Authority slightly raised the slope of the currency band and re-centred it higher, with the latter move expected by just half of the analysts surveyed by Bloomberg. The width of the S$NEER band was left unchanged but, truth be told, this is the least frequently used setting. The MAS cited inflation concerns, ignoring below-forecast GDP data released alongside its statement.
• IDR: Spot USD/IDR held a tight range as domestic headline flow failed to offer much of real note.
• MYR: Spot USD/MYR faltered in the wake of overnight greenback sales.
• Markets were shut in the Philippines, Thailand and India.