USD/CNH Can't Sustain 50-Day MA Break To The Downside

USD/Asia pairs are mostly lower, although North East Asia pairs have seen limited downside from earlier moves, particularly USD/CNH and USD/KRW. Some South East Asia currencies, notably THB and IDR have done a better job of holding gains. Equity sentiment is positive throughout the region, but we are away from best levels post the China PMI beats. Note tomorrow March South Korean trade figures are due, while Monday next week sees March PMIs print, along with Indonesian CPI.

• USD/CNH got to a low of 6.8438 not long after the PMIs printed, but we have steadily recovered since. Th pair was last around 6.8660. This is back above the simple 50-day MA, which comes in around 6.8580. China equities are only modestly higher, showing a much more muted reaction to the better PMI prints compared to the start of the month.
• 1 month USD/KRW fell but found buying interest ahead of 1286 (which also coincides with the simple 100-day MA). We last track near 1295, little changed from NY closing levels on Thursday. Onshore equities are higher, +0.9% for the Kospi. Earlier Feb IP data was mixed, weaker than expected in m/m terms, buy showing some improvement in y/y terms (-8.1%, -13% for Jan).
• USD/TWD is a touch lower, last near 30.43. The manufacturing PMI eased for March to 48.6 from 49.0 in Feb. Note Taiwan markets are closed for the first 3 days of next week.
• Spot USD/IDR gapped lower in the first part of trade, getting under 14960. We sit slightly higher now at 14970 still around 0.50% firmer in IDR terms for the session. This is fresh lows in the pair back to early Feb. YTD lows come in at 14837. We are back sub all key EMAs and MAs, as IDR continues to ride the improved risk tone in global markets. 5yr CDS is back sub 100bps (we were around 120bps in terms of recent highs). Crude palm oil prices sit around recent highs, last at MYR4065, which is close to the 200-day MA (MYR4075). Offshore holdings of local bonds have also risen. This week has seen just over $500mn in fresh inflows so far. In level terms, foreign holdings of local bonds are close to recent early Feb highs (811.71 trillion IDR, versus 816.20 on Feb 7).
• USD/PHP spot sits around 54.30, close to recent lows. A fresh break sub 54.20 would likely have the market targeting a move below 54.00, which is where YTD lows came in. Local equities are the worst performer in the region today, down over 1%. This hasn't impacted PHP sentiment negatively so far today. One factor which may be weighing on equities is further tightening expectations. BSP Governor Medalla stating yesterday it was too early for a pause.
• USD/THB is lower, but hasn't been able to break through downside support at 34.00. The pair last close to 34.10, still 0.40% firmer for the session.