USD/CNH Rebounds 1% From Intra-Day Lows

A sharp recovery in USD/CNH from early session lows has defined the Asian FX session. This has spilled over to the rest of the region, with only INR outperforming, although this largely reflects catch up after onshore markets were closed yesterday. In terms of focus tomorrow we get Q3 GDP for Taiwan, along with Singapore unemployment data.

• USD/CNH sunk to sub 7.1700 in early trade, but has spent much of the session rebounding, trading above 7.2400, a +1% turn around. Onshore spot has pushed back towards 7.2200 as well. Sentiment has now stabilized somewhat. The CNY fixing error was much lower today, but this is likely to reflect yesterday's sharp USD sell-off. China industrial profits continued to slow for September, while President Xi stated China was willing to find ways to get along with the US.
• The won couldn't build on yesterday's gains. The 1-month USD/KRW NDF is back to a 1420, +0.50% above NY closing levels, in line with CNH weakness. Earlier, Q3 GDP showed slowing q/q growth, but a resilient domestic demand backdrop. The BoK also stepped-up efforts to stabilize local credit markets by widening the collateral that it accepts.
• USD/SGD is above early session lows as well, last at 1.4050/55. The MAS expects inflation to stay high in 2023, even with growth forecast to slow further. Core inflation is forecast to average 3.5-4.5% next year (against a 4% avg for this year), while growth dips below trend.
• USD/INR is lower, after onshore markets re-opened today. The pair dipped towards 82.10 but is back at 82.30 now. Onshore equities are +0.50% in the first part of trading, while the 10yr yield has moved away from recent highs, back sub 7.60%, -6bps for the session.
• USD/IDR spot is slightly above yesterday's levels, last at 15573, + figs for the session. The USD/UST yield pullback should be favorable for IDR, but today's USD/CNH rebound may be offsetting. In the absence of notable data releases during the remainder of this week, focus turns to the latest batch of CPI figures, due next Tuesday.
• USD/PHP moves further away from the line in the sand, last at 58.33, -13 figs for the session. BSP Gov Medalla sought to water down messaging from his predecessor and current FinSec Diokno, who drew a line in the sand at PHP60, vowing that officials would defend that level. Medalla said that he saw "very little" difference between USD/PHP hitting PHP60.00 and PHP60.50, but the round figure "became a magic number" politically, which "can complicate central banking."