USD/CNH Rebounds, Mixed Trends In SEA

Most USD/Asia pairs are higher to start the week. USD/CNH has rebounded, although remains well below highs from last week. The market somewhat disappointed by lack of stimulus details. USD/KRW is also higher, but MYR has outperformed. USD/IDR is close to multi-week highs, while USD/INR stays sub 82.00 for now. Tomorrow, the China 1yr and 5yr LPRs are due, with both expected to be cut by 10bps. Malaysian trade figures and Taiwan export orders are also due tomorrow.

• USD/CNH has tracked higher today, getting to a high of 7.1553, but we sit slightly lower now, last near 7.1500. This is above highs from Friday's session, with markets a little disappointed in the lack of details around fresh stimulus measures from Friday's State Council meeting. Onshore equities are also down, the CSI 300 off nearly 1%. US Secretary of State Blinken is wrapping up his trip to China, it remains to be seen if has a meeting with President Xi Jinping before leaving.
• 1 month USD/KRW sits off session highs, last just under 1278. Earlier highs came in close to 1282, as CNH weakened and local equities fell. Sentiment has stabilized somewhat this afternoon though, although more so in the FX space. The pair remains within ranges, with dips below 1270 generating USD support.
• USD/INR is ~0.1% firmer as the Rupee softens in early trade. The pair last prints at 81.95/82.00. The pair has ticked higher in early dealing after printing its lowest level since mid-May on Friday as broader USD trends dominate. Total equity inflows for June sit at $1.525bn, Thursday saw the largest inflow of the month with foreign investors buying $399.28mn in Indian equities. Looking ahead, the data calendar is light with just Q1 BoP Current Account Balance on the wires which is due between today and month end.
• It's been a muted start to the week for the Ringgit on Monday, USD/MYR is little changed from Friday's closing levels in early dealing. On Friday USD/MYR finished ~0.2% lower, the pair couldn't sustain a move through the 4.60 handle and pared losses to finish the week at 4.6150. Palm Oil futures are ~0.5% firm on Monday, this comes after a 6.7% rise on Friday which was the largest daily increase since December. The rally was driven by a rally in Soybean Oil and signs of improving demand in India. Global Investors sold $4.9mn of local equities on Friday bringing the total last week to an outflow of $41mn. On the wires tomorrow we have May Trade Balance, a surplus of MYR13.40bn is expected. On Thursday June 1 Foreign Reserves cross, there is no estimate and the prior read was $112.7bn. Friday's May CPI print headlines the week, CPI is expected to tick lower to 3.0% Y/Y from 3.3%.
• The SGD NEER (per Goldman Sachs estimates) is little changed in early dealing, the measure remains well within recent ranges. We now sit ~0.6% below the upper end of the band. USD/SGD is ~0.1% firmer this morning, as broader greenback trends dominate flows. The pair last prints at $1.3390/1.3400. Looking ahead, Friday's May CPI print headlines the week's docket. Headline CPI is expected to fall to 5.4% Y/Y from 5.7%, and Core CPI is also expected to tick lower to 4.7% Y/Y from 5.0%.
• USD/IDR is approaching late May highs just above 15000. The pair was last at 14991, +0.40% higher in USD/IDR terms versus Friday's onshore closing levels. The simple 100-day MA is not far away, around 15020 in terms of upside resistance, which the 50-day MA is back closer to 14860 on the downside. The 1 month NDF is already above 15000 (last 15010), which is also close to end May highs. Cross asset headwinds are mixed. This week we have the BI decision on Thurs, no change is expected. BI continues to view the FX rate as undervalued, so this may be a renewed focus point, which is something the market is likely to be wary of with USD/IDR spot so close to recent highs.