USD/CNH Breaks Lower, KRW, TWD & IDR Rally, INR Lags

USD/Asia pairs are mostly lower, with USD/CNH dipping sharply towards 7.1700 before stabilizing somewhat. This continued the trend move down from late last week. Gains have been strong for KRW, TWD and IDR elsewhere. INR is steady, underperforming softer USD trends. Still, to come today is Taiwan export orders. Tomorrow focus will be on South Korea's first 20-days of trade data for November, while Q3 Indonesia current account figures are also out.

• USD/CNH continues to track lower, the pair last near 7.1820. Earlier lows were at 7.1701, levels last seen back in early August. The August 5 low at 7.1553 is not that far away, while the 200-day EMA comes in slightly higher near 7.1615. This continues the correction lower from late last week. A lower USD/CNY fix and the better equity tone to HK markets (+1.8% for the HSI) has helped, while onshore equities are back in the green. Optimism around property funding support is helping, although the CSI 300 real estate index is around flat at this stage. USD/CNH is now more in line with the recent weakness in US-CH government bond yield differentials as well. Earlier the 1yr and 5yr LPRs were held steady.
• USD/HKD sits just up from recent lows, last near 7.7920 (earlier lows were at 7.7915). For the pair, we haven't been at these levels since late last year. Late Dec lows were near 7.7870, while earlier that month we got near 7.7615. On the top side, the 20-day EMA is back near 7.8115. Further HKD gains are very much in line with broader USD weakness and the continued trend down in US-HK short end yield differentials. The 3 month spread is now back to -8.5bps, fresh lows to Jan of this year.• Hibor continues to track higher, the 3 month fixing at 5.46% today, which is fresh highs back to 2001. The 1 month was fixed at 5.21%.
• USD/TWD has continued to track lower, last at 31.66, a TWD gain of 0.60% so far in Monday trade. Lower USD/CNH levels are aiding sentiment. The broader equity backdrop has been positive for TWD, although onshore markets are flat today. Still, Signs of an end to Fed tightening, improved tech/chip outlook is fueling gains. Last week saw +$4.16bn of net equity inflows, the best since early February.
• The Rupee has opened dealing little changed in a flat start to the weeks trade. INR is underperforming the rest of the USD/Asia space as the greenback ticks lower on Monday. India is expected to maintain its curbs on overseas rice sales (BBG). This is expected to keep grain close to its highest price levels since the food crisis of 2008. India is the world's top rice exporter. The local data docket is empty this week.
• The Ringgit has opened dealing firmer on Monday as broad based USD flows dominate in early trade on Monday. USD/MYR sits at 4.6700/40 ~0.2% below Friday's closing levels. We have fortnightly Foreign Reserves on Wednesday and October CPI rounds off the docket on Friday. CPI is expected to hold steady at 1.9% Y/Y.
• USD/SGD has fallen ~0.2% and sits at its lowest level since early August. The strongest Yuan fix by the PBOC since August is marginally weighing on the greenback. The pair sits at $1.3405/10. Due on Wednesday is the final read of Q3 GDP, the highlight of the week's docket is Thursday's October CPI print with an uptick in headline CPI to 4.5% Y/Y expected. October Industrial Production rounds off the docket on Friday.
• USD/IDR is sharply lower in the first part of Monday trade. The pair last near 15405, +0.60% higher (in IDR terms). This puts us back to late September levels. We have broken down through the 100-day EMA (15455), while the 200-day is further south at 15307.8. Interestingly, this recent run lower in USD/IDR is outperforming the pull back in US real yields to some extent, which steadied in the latter half of last week. Still, we nearly back to YTD lows for 5yr CDS, in a sign of positive local asset sentiment. Local equities are back near 7000, fresh highs back to late September. Palm oil prices have also risen off recent lows.