Weighed By Softer Equity Tone, Continued Yen Depreciation

USD/Asia pairs are mostly higher in the first part of Thursday trade. Part of this is catch up to USD strength post onshore closes yesterday, while weaker equity sentiment has also been evident for most parts of the region (except for HK/China markets), while yen has made fresh lows versus the USD. USD/CNH is lower, but follow through has been limited. KRW, PHP, IDR and THB spot losses have evident, although NDF trends have been steadier. Tomorrow, we have Singapore industrial production, but otherwise the data calendar is light.

• USD/CNH is back sub 7.2700, which has seen the CNH-CNY basis narrow. The USD/CNY fix was near recent levels, which may have disappointed some yuan bears hoping for a move higher. Spot USD/CNY is near 7.2470 though and remains very close to the upper limit of the daily trading range. US Secretary of State Blinken has commenced his trip to China, but nothing meaningful has emerged so far.
• Spot USD/KRW has rebounded over 0.50%, last near 1377. The 1 month NDF is a touch under 1375, so slightly below end NY levels from Wednesday. Earlier won sentiment was a little more positive amid much stronger than expected Q1 GDP growth (y/y growth is back above 3%). However, equity weakness amid tech softness coupled with on-going yen losses have been negative offsets.
• USD/IDR spot is back above 16200 in the first part of Thursday trade, around 0.35% weaker in IDR terms. Lows in the pair, after yesterday's BI 25bps rate hike, came in at 16145. Recent highs rest at 16288. The 1 month NDF was last around 16230, slightly lower for the session. BI left its macro outlook unchanged but it now expects that the Fed won't hike before Q4 and that there will only be 25bp before year end rather than 75bp. BI is unlikely to ease before the Fed given rupiah weakness. Broader risk sentiment has not helped BI's cause to stabilize IDR sentiment post yesterday's surprise hike. Weaker global equities, amidst a higher core yield backdrop, is typically not favorable rupiah backdrop.
• USD/PHP sits near session highs, the pair last in the 57.90/95 region, down nearly 0.70% for the session in PHP terms. This is fresh highs in the pair back to Nov 2022. Highs from 2022 came in around the 59.00 level. Renewed PHP weakness looks a little at odds with cross asset drivers, with broader USD trends a little more stable this week. Local equities have moved off recent lows (although offshore portfolio equity outflows persist, last at -$152mn for April to date), while the uptrend in oil prices has stabilized somewhat. Comments from Finance Secretary Recto (who also sits on the BSP board) have also crossed the wires (BBG). He stated that the policy rate will depend on the inflation, but played down risks of a near term rate hike. Earlier remarks by Recto (from Apr 19) stated if PHP fell to 59.00 versus the USD it would likely limited rate cuts going forward.
• USD/THB has rebounded back above 37.00, the pair in the 37.10/15 region. This is fresh highs back to Oct last year. Local commercial banks will cut rates by 25bps for some individuals and SMEs to ease the financial burden. Thailand PM Srettha made such a call earlier this week, which followed the steady hand from the BoT recently.