EMERGING MARKETS-Asia FX gain as Treasury yields retreat, eyes on US data

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SIn South Korea, Taiwan shares up by around 2%

The Indonesian rupiah rose 0.1%

Chinese markets reopen on Friday

October 7 (Reuters)Emerging Asian currencies edged up on Thursday as Treasury yields retreated on signs of a deal to avoid a US federal debt default, calming markets ahead of data that could signal when the Federal Reserve could start to decline.

Falling oil prices also supported the currencies of major Asian oil importers such as South Korea. KRW = KFTC, which alongside the Thai baht THB = TH and Philippine peso PHP = dominated the region with gains between 0.2% and 0.4%. WHERE

Actions in South Korea .KS11 and Taiwan .TWII both climbed around 2%, providing some respite from a weeklong period of losses caused by inflation fears and supply disruptions.

Washington politicians appeared close to a temporary deal that would avoid a U.S. government shutdown and see an extension of the federal debt ceiling until December.

That left markets largely awaiting U.S. employment data on Friday to see when the Fed may start cutting back on asset purchases in the pandemic era, which could reduce the demand for higher yielding but riskier Asian assets.

“A very high number by all accounts could see the market anticipating Fed rate hikes, which will be positive for the dollar and keep Asian currencies down,” said Khoon Goh, head of Asia research. at ANZ.

In September, the Fed said it would likely start cutting back on its monthly bond purchases as early as November.

Chinese markets, a big directional driver for Asia, will reopen on Friday after a week-long public holiday, improving liquidity, although fears of broader real estate market problems stemming from the Evergrande 3333.HK the crisis could come back to the fore.

“Chinese market sentiment will also be a crucial driver, and the restart of southward flows could lift Hong Kong stocks and wider Asian sentiment,” said Wei-Liang Chang, currency and credit strategist at DBS. .

Local media reported earlier this week that the heavily leveraged Chinese real estate company is selling a stake in its property management arm. 6666.HK to raise funds as it faces one of the country’s largest debt restructurings with more than $ 300 billion in liabilities.

Elsewhere, Indonesian stocks .JKSE plunged, while the rupee IDR =, which supports some of the most profitable debts in emerging markets, rose 0.1%.

The country’s foreign exchange reserves rose by around $ 2.1 billion in September to a record high of $ 146.9 billion, the central bank said. It was one of the currencies of Asia that suffered a lot during the taper tantrum of 2013.

Friday will also see a meeting of India’s central bank, where policymakers are broadly expected to keep the repo rate unchanged to support the resumption of growth.

STRONG POINTS:

** Indonesian 10-year benchmark rate increases by 2 basis points to 6.33%

** Thai consumer confidence increases in September thanks to easing of coronavirus brakes

Asian Stock Indices and Currencies at 0647 GMT

COUNTRY

FX

RIC

FX

DAILY %

FX

YTD %

INDEX

STOCKS

DAILY %

STOCKS

YTD %

Japan

JPY =

+0.04

-7.29

.N225

0.54

0.85

China

CNY = CFXS

+0.36

+1.25

.SSEC

0.90

2.74

India

INR = IN

+0.23

-2.32

.NSEI

1.10

27.59

Indonesia

IDR =

+0.14

-1.34

.JKSE

-0.11

7.21

Malaysia

MYR =

+0.07

-3.83

.KLSE

0.01

-4.15

Philippines

PHP =

+0.24

-5.31

.PSI

-1.50

-2.64

South Korea

KRW = KFTC

+0.16

-8.75

.KS11

1.76

2.99

Singapore

SGD =

+0.08

-2.69

.STI

0.89

9.41

Taiwan

TWD = TP

+0.03

+1.86

.TWII

1.96

13.45

Thailand

THB = TH

+0.41

-11.28

.SETI

0.91

12.76

(Reporting by Nikhil Kurian Nainan in Bengaluru; editing by Richard Pullin and Sriraj Kalluvila)

(([email protected]; Twitter: @NikhilKurianN))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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