USD/Asia Pairs Lower, INR Firms On Debt Index Inclusion

USD/Asia pairs are mostly lower in the first part of Friday trade. A more resilient regional equity backdrop has helped, while US yields haven't been able to hold earlier gains, which has been another positive. INR is modestly firmer as J.P. Morgan announced it will include the country's government bonds in its EM debt index from mid next year. 1 month USD/KRW continues to find selling interest above 1340.

• USD/CNH got to lows of 7.2957, after opening near 7.3140. Supports have come from an equity rebound, a record fixing support (relative to expectations) and reports of state bank USD selling and reduced CNH liquidity. We sit slightly higher now, last near 7.3075, with HK and China equities slightly away from best levels.
• 1 month USD/KRW is down from Thursday highs above 1342. The pair last sat at 1333/34, around 0.40% stronger in won terms versus NY closing levels. Resistance above 1340, which is also where the pair topped out in August, has again been apparent. Local equities are weaker, but at -0.35%, haven't fallen as much as implied by tech weakness elsewhere.
• USD/HKD has seen some support emerge in the past week. Spot sits back near 7.8190 in recent dealings. This is against early highs from yesterday just above 7.8260. We are above lows from earlier in the week though near 7.8140. We are below all key EMAs with the majority clustered near the 7.8280/90 region, while the 200-day sits just above 7.8300. US-HK rate differentials, at the short end have stabilized somewhat in recent sessions, with Wednesday's hawkish Fed outcome helping at the margins. The 3 month differential is around +22bps, we were near +100bps at the turn of the month. The 3 month Hibor fix was steady at 5.22% today, the 1 month at 5.23%.
• Rupee has firmed in early dealing, USD/INR is down ~0.2% and has breached its 20-Day EMA (82.96). The pair sits at 82.91/92. JPMorgan Chase & Co. will add Indian government bonds to its benchmark emerging-market index, a keenly awaited event that could drive billions of foreign inflows to the nation’s debt market.
• USD/MYR is consolidating recent gains in narrow ranges today, the pair has risen ~4.2% since the start of August and printed a fresh YTD high yesterday. In early dealing today the pair is marginally lower, last printing at 4.6860/90. CPI in August came in as expected at 2.0% Y/Y.
• The SGD NEER (per Goldman Sachs estimates) is little changed in early dealing on Friday, the measure sits well within recent ranges and is ~0.6% below the top of the band. Broader USD flows dominated yesterday as the hawkish hold from the Fed saw USD/SGD extend recent gains to print a fresh YTD high. Looking ahead; the next data of note is Monday's August CPI print. Headline CPI is forecast to tick lower to 3.9% Y/Y and core CPI is expected to ease to 3.5% Y/Y from 3.8%.
• USD/PHP sits modestly lower, last under 56.80. We remain within recent ranges. The PHP didn't receive much support earlier, when BSP Governor Remolona stated there was a good chance of a November rate hike. He did state FX wasn't the overriding concern in terms of warranting tighter policy. Focus remains supply side pressures.