*
Baht up 0.8%, peso strengthens 0.7%
*
Equities in the region mixed
*
China keeps benchmark lending rates unchanged
By Himanshi Akhand Feb 20 (Reuters) - The Philippine peso and the Thai baht led gains among emerging Asian currencies on Monday, while regional equities were mixed as expectations that the Federal Reserve could keep interest rates higher for longer kept risk appetite in check. The baht appreciated 0.8% after weakening 2.4% last week. Data on Friday showed that Thailand's economy unexpectedly contracted in the final quarter of 2022. The peso strengthened 0.7% after declining 1.9% last week. U.S. markets will be closed for a public holiday on Monday. Khoon Goh, head of Asia research at ANZ, said modest liquidity was likely to keep trading within a fairly narrow range as a result. The dollar edged higher, helped by a strong run of economic data out of the United States that raised bets for the Federal Reserve to stay on its policy tightening path for longer than initially expected. Data pointing to sticky inflation, robust retail sales growth and a still-tight labour market, have led markets to revisit their rate expectations. Markets are now expecting the Fed funds rate to peak just under 5.3% by July. Hawkish comments from Fed officials signalling that interest rates will need to go higher in order to tame inflation have also supported the U.S. dollar. The South Korean won , the Indonesian rupiah and the Malaysian ringgit added between 0.1% and 0.4%. The Fed is due to issue minutes of its last meeting later this week. "Markets will be looking out for any signs that Fed is getting more comfortable with the trajectory of inflation," Goh said, adding that further commentary or insights into Fed officials' thinking around disinflation will be closely watched. Meanwhile, China kept its benchmark lending rates unchanged for a sixth straight month in February, as expected, with the world's second-largest economy showing more signs of recovery from a pandemic-induced slump. The yuan was largely flat, while stocks in Shanghai rose 1%.
Analysts at Maybank said they continued to expect that
China's central bank would cut one-year and five-year loan prime
rates by 20 basis points (bps) each this year, with the first 10
bps cut forecast around March or April.
"This will help frontload credit support to give additional
impetus to the early stages of economic recovery," the analysts
said.
Equities in the region were mixed. Stocks in Bangkok rose 0.2%, while those in Manila and Singapore fell 0.5% and 0.3%, respectively.
HIGHLIGHTS
** Malaysia's exports rose 1.6% from a year earlier in
January, slower than expected, government data showed on Monday
** Indonesia posted a $4.7 billion surplus in its balance of
payments for the last quarter of 2022, due to a high current
account surplus
** Thai banks' non-performing loans stood at 2.73% of total
lending at the end of December 2022, helped by debt
restructuring, the central bank said
Asia stock indexes and currencies
at 0427 GMT
COUNTRY FX RIC FX FX INDE STOCKS STOCKS
DAILY % YTD % X DAILY YTD %
%
Japan +0.01 -2.26 <.N2 -0.02 2.22
25>
China <CNY=CFXS +0.01 +0.51 <.SS 0.99 5.39
> EC>
India +0.20 +0.07 <.NS 0.12 -0.77
EI>
Indonesi +0.24 +2.65 <.JK -0.29 0.37
a SE>
Malaysia +0.07 -0.61 <.KL -0.37 -1.61
SE>
Philippi +0.73 +1.03 <.PS -0.45 2.78
nes I>
S.Korea <KRW=KFTC +0.41 -2.29 <.KS 0.35 9.99
> 11>
Singapor +0.04 +0.31 <.ST -0.33 2.03
e I>
Taiwan +0.13 +1.11 <.TW 0.46 9.99
II>
Thailand +0.74 +0.74 <.SE 0.22 -0.80
TI>
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Graphic: World FX rates Asian stock markets ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Himanshi Akhand in Bengaluru; Editing by Jamie Freed)
