Some Catch Up With Weaker USD Sentiment

USD/Asia NDF levels are away from lows seen on Friday, but the general tone is for a weaker USD in spot markets. Positive regional equity market sentiment is helping, which some offset is coming from a rebounding USD against the majors. Tomorrow, Taiwan trade figures for October are due, along with Malaysia IP and Philippines unemployment figures.

• USD/CNH is up for the session, last just above 7.2180, which is around +0.45% above previous closing levels. Still, earlier moves into the 7.2400/7.2500 region were faded by the market. The CNY fixing was very close to market expectations, ending a run of stronger than expected outcomes going back to August. October trade figures were disappointing, but the market is focused more on the prospect of re-opening plans (even as the health authorities continue to push back against any significant changes).
• Upticks in USD/KRW have generally been faded by the market. The 1 month NDF got above 1413 in early trade but is now back to 1402.00, close to NY lows from late last week. Note the simple 50-day MA comes in 1408.23, which we haven't been below in a meaningful way since early June of this year. The Kospi is tracking higher, near +1% to 2370.
• USD/IDR is back below 15700, last at 15692, slightly up on lows for the session. The Q3 GDP report was better than expected, +1.8% q/q. Bank Indonesia reported that the nation's foreign reserves fell to $130.2bn last month, the lowest level since Apr 2020, due to the payment of the government's external debt and interventions to stabilise the rupiah.
• Spot USD/THB trades -0.20 at 37.37 at typing, catching up with Friday's greenback sell-off. Bears look for a clean break of the 50-DMA at 37.345, which would open up Oct 6 low of 37.125. Bulls set their sights on Oct 20 high of THB38.465. Both core and headline CPI inflation in Thailand were as expected for October. The CPI moderated to 6% y/y from 6.4% the previous month due to lower food and oil prices. This should be reassuring to the Bank of Thailand, who began its tightening cycle only in August with a 25bp hike.
• Spot USD/PHP changes hands -0.060 at 58.505, with bears looking for a renewed test of the 50-DMA (57.992) and bulls keeping an eye on the all-time high of 59.000. FinSec Diokno noted that "addressing high inflation is the number one priority of the economic team," while the government said it has earmarked around PHP206.5bn for subsidies and cash assistance in 2023. Runaway inflation and peer pressure are cornering Bangko Sentral ng Pilipinas into turning more aggressive when it comes to monetary rightening, with Governor Medalla vowing to replicate the Fed's recent 75bp rate hike at the BSP's next rate review.