USD/Asia Pairs Higher, THB Slumps, CNH Still Sidelined

USD/Asia pairs are pretty much higher across the board, although once again CNH is steady near 7.3400, largely ignoring broader USD trends. The weaker Caixin PMI did weigh on sentiment elsewhere though. Baht has been the weakest performer, down over 1%, unwinding some of its October outperformance. Tomorrow, we have South Korean CPI, along with the BNM decision in Malaysia (no change is expected), as the main watch points.

• USD/CNH has tracked recent ranges, last just under 7.3380. Equity sentiment struggled post the Caixin PMI miss, although we are away from lows. USD/CNY spot remains under 7.3200, in line with the CNY fixing cap. US authorities stated a Biden-Xi meeting would take place in November, although the China authorities stated that they had nothing to add to these reports (BBG).
• 1 month USD/KRW is higher for the session, last near 1356, around 0.40% weaker in won terms. A better equity backdrop, coupled with a surprise trade surplus has done little to lift sentiment for the won. The weaker China data has weighed, while higher beta FX has also generally been on the backfoot in terms of the majors.
• USD/HKD sits just near 7.8245, well within recent ranges. The pair hasn't spent much time above 7.8250 since mid-October though (with the 50-day EMA at 7.8255). The 200-day remains near 7.8290. On the downside, late October dips below 7.8200 were supported. This fits with a broadly stable US-HK short end yield differential backdrop over this period (see the chart below). The 3 month differential sits at +23bps as we head into the Fed meeting later. 1 month Hibor has drifted a touch lower, last fixed at 4.875%. The 3 month is steadier though, near 5.23% today.
• USD/THB sits back in 36.30/35 region, +1.0% higher for the session so far. We closed yesterday at 35.94, but recent dips sub the 36.00 level haven't been sustained in the pair. These levels also come close to the 50-day EMA support point at 36.01. Broader USD gains, particularly against the yen, post yesterday's onshore spot close has seen the baht play catch up to the downside in the first part of trade today. Earlier the Oct manufacturing PMI ticked down to 47.5 from 47.8.
• Like elsewhere in the region, USD/IDR has rebounded today. The pair last at 15950, just under recent reported intervention levels above 15960. In the past week the pair has largely drifted sideways, but dips have been supported as we head into the US FOMC meeting later. Oct CPI has just printed with headline close to expectations (2.56% y/y and m/m at 0.17%, core at 1.91%y/y). Pressures are just up off recent lows. Offshore developments, particularly in terms of the Fed and pressure on IDR, will likely have a greater say on any follow up BI tightening actions though. Earlier we had the Oct PMI print at 51.5, from 52.3 prior.
• The SGD NEER (per Goldman Sachs estimates) is marginally firmer in early trade this morning and sits a touch off the touch of recent ranges. The measure sits ~0.4% below the top of the band. USD/SGD has firmed back above the 20-Day EMA ($1.3685), the pair has see-sawed around the measure for the majority of recent trading as a $1.3650/1.3750 range persists. A reminder that the local docket is empty today. Tomorrow we have the Purchasing Managers Index and Electronic Sector Index, on Friday October S&P Global PMI and September Retail Sales cross.
• The Ringgit has been pressured in early dealing on Wednesday as onshore participants digest yesterday's session which saw US Tsy Yields tick higher, which has partially unwound in Asia, and the USD also firm. We sit at 4.7740/65 ~0.2% above yesterday's closing levels and well within the recent range. October S&P Global Mfg PMI crossed this morning, the measure held steady at 46.8. The Output and New Orders components fell to their lowest levels since Jan 23.
• The Rupee has opened dealing little changed from yesterday's closing levels in a muted start to Wednesday's session. USD/INR prints at 82.25/26, the pair continues to consolidate in a narrow range above the 20-Day EMA (83.2120). RBI Gov Das noted yesterday at a banking conference in Mumbai taht he expects Q2 GDP to surprise to the upside (BBG).