*
Indonesian rupiah hits lowest since Jan. 13
*
Malaysian ringgit extends losses to a third straight
session
*
Singapore stocks mark worst day since Jan. 10
By Tejaswi Marthi Feb 13 (Reuters) - Asia's emerging market currencies and stocks struggled to gain momentum on Monday, as investors were cautious ahead of a crucial U.S. inflation data that could re-shape the rhetoric for interest rate hikes globally.
Ahead of Tuesday's Consumer Price Index (CPI) report, revisions to the previous data set showed consumer prices rose in December instead of falling as previously estimated. That lifted core inflation on a three-month annualised basis to 4.3% from 3.1%. The dollar index climbed 0.1% to hit its highest level in one week on firming bets that the Fed will keep monetary policy tight for a longer period of time.
The Malaysian ringitt and the Indonesian rupiah depreciated 0.6% and 0.5%, respectively, each hitting their lowest levels in a month, while the Philippine peso slid 0.6%.
"Having traded lower since November 2022, the U.S. dollar index has overcome such pattern last week as previous dovish expectations are being challenged with fears of a short-lived disinflation story," said Yeap Jun Rong, market analyst at IG. Central banks around the world have decided to slowdown the aggressive pace of rate hikes as multiple sets of data pointed towards a cooling inflation. However, the expected uptick in the upcoming U.S. CPI data has cemented bets that the Fed would keep monetary policy tight for longer.
In its Feb. 16 policy meeting, the central bank of the Philippines (BSP) is expected to hike rates by 50 basis points (bps), said Vishnu Varathan, economics and strategy head at Mizuho Bank.
"Even though monetary policy works with a lag, BSP is not afforded the luxury of taking a step back on rate hikes given elevated and more worryingly rising, price pressures."
Bank Indonesia is also meeting later this week and the rupiah might benefit more from an open, data-dependent path than closing of all avenues for further rate hikes, Varathan added.
Most stocks in the region also extended declines, as investors hunkered down for the U.S. inflation data that could send jitters across interest rates globally, while accelerating or reversing the recent rise in bond yields. Equities in Singapore fell 0.8%, while equities in India and Malaysia fell 0.5% and 0.3%, respectively.
HIGHLIGHTS:
** Indonesian 10-year benchmark yields rise 8.3 bps to
6.727%
** China stocks rose as a strong rebound in January credit
demand lifted the market's sentiment, while Hong Kong shares
dropped on geopolitical tensions between Beijing and Washington
** India retail inflation likely rebounded to 5.9% in Jan -
Poll Asia stock indexes and currencies at 0639 GMT
COUNTRY FX RIC FX FX INDE STOCKS STOCKS
DAILY % YTD % X DAILY YTD %
%
Japan -0.60 -0.82 <.N2 -0.88 5.11
25>
China <CNY=CFXS -0.15 +1.09 <.SS 0.65 6.24
> EC>
India -0.24 +0.02 <.NS -0.48 -1.85
EI>
Indonesi -0.53 +2.33 <.JK 0.34 0.78
a SE>
Malaysia -0.57 +1.06 <.KL -0.31 -1.70
SE>
Philippi -0.59 +1.61 <.PS -0.55 4.15
nes I>
S.Korea <KRW=KFTC -0.95 -1.00 <.KS -0.69 9.67
> 11>
Singapor -0.15 +0.59 <.ST -0.84 2.49
e I>
Taiwan -0.36 +1.53 <.TW -0.27 9.95
II>
Thailand +0.03 +2.35 <.SE 0.08 -0.17
TI>
(Reporting by Tejaswi Marthi in Bengaluru; Editing by Rashmi
Aich)
