.
Most currencies flat, equities decline
Singapore stocks eye best day since early Feb
S.Korea Feb inflation stronger than expected
By John Biju
March 6 (Reuters) –Most Asian currencies were flat on Wednesday, ahead of a testimony from the U.S. Federal Reserve Chair Jerome Powell while equities remained under pressure a day after the Chinese parliamentary session did not provide any stimulus measures.
Most currencies were largely unchanged while the Indonesian rupiah IDR= climbed 0.3%.
Market participants remained cautious ahead of congressional testimony from Fed Chair Jerome Powell which will be closely assessed for any clues on when rate cuts will happen in the United States.
Ken Cheung, chief Asia FX strategist at Mizuho Bank said that any remark deviating from the view of “no rush to cut rates” will introduce FX volatility.
Investors are also on the lookout for U.S. jobs data for February due on Friday for further policy clues.
Most equities remained under pressure with shares in Malaysia .KLSE and South Korea .KS11 falling 0.3% each while those in the Philippines .PSI declined 0.4%.
In contrast, shares in Singapore .STI rose more than 1% heading towards their best day since Feb. 16, and Taiwan stocks .TWII extended gains to a third session to hit another record high.
China’s parliament in its annual session on Tuesday set a widely expected growth target of 5% for 2024 and did not provide any stimulus measures as markets were hoping for.
“I think there is a bit of disappointment and we could be in a stage where markets are paring back because of that,” Wei Liang Chang, macro strategist (FX and Credit) at DBS Bank said.
Equities in China .SSEC edged 0.1% higher while the yuan CNY=CFXS was trading flat.
Inflation in South Korea accelerated in February and came in above expectations. Inflation data from the Philippines on Tuesday also surprised to the upside.
The data “introduce a little bit of caution for Asian policymakers in terms of rate cuts”, Chang said.
“They are all waiting to assess if inflation is indeed fully quelled or there could be still some persistent price pressures that will require rates remain at a high level for the time being,” he added.
“That would mean that Asian currencies could see some support from policy rates being held for a more extended period of time.”
Focus is also on a monetary policy decision by the Bank Negara Malaysia (BNM) on Thursday where it is expected to stand pat on rates and hold there until at least 2026, according to a Reuters poll.
HIGHLIGHTS:
** As China’s Xi summons ‘new productive forces’, old questions linger for economy
** Chinese investors rush abroad, hitting outbound investment limit
** Indian bond markets eye smaller below-$5 bln inflow from Bloomberg inclusion
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Asia stock indexes and currencies at 0415 GMT |
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|
COUNTRY |
FX RIC |
FX DAILY % |
FX YTD % |
INDEX |
STOCKS DAILY % |
STOCKS YTD % |
|
Japan |
JPY= |
+0.07 |
-5.92 |
.N225 |
-0.05 |
19.76 |
|
China |
CNY=CFXS |
-0.03 |
-1.41 |
.SSEC |
0.12 |
2.57 |
|
India |
INR=IN |
+0.01 |
+0.39 |
.NSEI |
-0.11 |
2.76 |
|
Indonesia |
IDR= |
+0.25 |
-2.10 |
.JKSE |
0.34 |
-0.01 |
|
Malaysia |
MYR= |
+0.08 |
-2.94 |
.KLSE |
-0.31 |
5.33 |
|
Philippines |
PHP= |
+0.16 |
-0.86 |
.PSI |
-0.41 |
6.63 |
|
S.Korea |
KRW=KFTC |
-0.13 |
-3.61 |
.KS11 |
-0.31 |
-0.53 |
|
Singapore |
SGD= |
+0.01 |
-1.73 |
.STI |
1.13 |
-3.03 |
|
Taiwan |
TWD=TP |
-0.14 |
-2.76 |
.TWII |
0.44 |
8.60 |
|
Thailand |
THB=TH |
+0.06 |
-4.50 |
.SETI |
0.93 |
-3.11 |
Reporting by John Biju in Bengaluru; Editing by Stephen Coates