USD/PHP Rallies To Fresh Highs Back To 2022, Firmer USD Elsewhere

USD/Asia pairs are higher across the board, as the broader USD recovery continues. US yields have firmed further, while regional equity markets are mostly weaker, except for onshore China markets, although this hasn't benefited the yuan. USD/PHP has risen to fresh highs back to 2022, up 0.70%. Tomorrow, we get Thailand Industrial production, along with Taiwan GDP revisions for Q1.

• USD/CNY spot moved to fresh highs for the year above 7.2480, albeit just. The USD/CNY fix was set above 7.1100, but only 5pips above yesterday's outcome. The pace of yuan depreciation still looks very modest. USD/CNH is around 7.2660, marginally higher for the session. Onshore equities are firmer today, but an offset is coming from yields which are still wedged at low levels.
• 1 month USD/KRW is off earlier highs near 1365. The pair last close to 1362, little changed for the session, despite generally firmer USD tones (spot is 0.40% weaker, but this largely reflects catch up from Tuesday USD gains). Onshore equities are off more than 1.3% as a strike by workers at Samsung Electronics weighs.
• USD/PHP downside has proven to be short lived. The pair has rebounded firmly today and is back to 58.38/40, around 0.70% weaker in PHP terms. We are above earlier May highs in the pair (58.28) and at fresh highs back to 2022. As we noted yesterday recent dovish rhetoric from the BSP/local rates outlook may have lent the market towards buying dips in the pair. Post the Tuesday rise in US yields has also aided broader USD sentiment. The recovery in oil prices is another headwind for PHP, although correlations don't appear that strong through May (in terms of higher oil prices driving USD/PHP higher). Month end may also be playing a role given continued trade deficits, while local equities are also weaker, back sub the 200-day MA.
• Since onshore markets returned at the start of the week (after being close Thurs/Fri last week), spot USD/IDR has tracked higher. Spot is back towards earlier May highs, last 16160/65, down a further 0.45% in IDR terms so far today. Like elsewhere in the region, cross asset moves are a headwind for the currency, particularly in terms of US yields. Recent peak and troughs in USD/IDR have lined up with shifts in US yield momentum.• Local equities are also softening into month end, while offshore investors have net sellers of local equities in May to date (-$700.9mn). Net bond inflows have been in excess of $900mn, but momentum has slowed through the second half of May.