*
Philippine peso among top gainers
*
Ringgit strengthens for fifth straight session
*
China Jan-Feb retail sales swing back to growth
By Navya Mittal March 15 (Reuters) - Asian currencies trended higher on Wednesday, with the Philippine peso among the top gainers, after a largely on target U.S. inflation print reinforced hope of less aggressive rate hikes, while China retail sales swung back to growth. The Philippine peso appreciated 0.4%, while Malaysian ringgit strengthened 0.2% making five straight days of gains, while Indonesian rupiah edged higher.
U.S. consumer price inflation cooled slightly in February, largely in line with market expectations, however, sticky rent prices kept inflation elevated, posing a dilemma for the Federal Reserve to either push ahead with rate hikes or announce a pause. Interest rate future pricing , however, implies an 80% chance of a 25 basis point (bp) U.S. rate hike, which is a lot more dovish than a week ago when markets priced a similar chance of a 50 bp hike. "Asian FX trends seem to be following a lot of global currency and fixed income volatility," said Glavin Chia, emerging markets strategist at Natwest Markets. "Into the Asian session we have seen more USD weakness, which has benefited regional currencies, though I wouldn't rule out continued, heightened volatility in the immediate term."
Stocks in the region traded higher on the back of tapering
expectations of rate hikes and economic data showing signs of
improvement in China, the region's top trading partner.
Benchmarks in Manila , Seoul , and Singapore gained over 1% each.
Equities in China advanced 0.9% as the country's
retail sales swung back to growth and factory activity expanded
for the first two months of this year. It also forecast
achieving its annual inflation target of 3% despite some
pressures. "We expect China's growth momentum to improve further in
coming months, driven mainly by the ongoing consumption recovery
and still-accommodative macro policy," said analysts at Goldman
Sachs in a note.
Meanwhile, benchmark bond yields in Indonesia fell by 3 basis points to 6.761%. The country's finance minister
said bond issuance would be front-loaded this year, predicting
global interest rates would continue to rise and stay high in
the second half of 2023. Investors in the region will also be watching out for any
spillover effects from the collapse of U.S. startup lender
Silicon Valley Bank. Highlights
** Thailand extends diesel tax cut to ease living costs
** Chinese consumers out of COVID gates with caution, rather
than zest
** Singapore Q4 final unemployment rate 2.0% Asia stock indexes and currencies
at 0405 GMT
COUNTRY FX RIC FX FX INDE STOCKS STOCKS
DAILY % YTD % X DAILY YTD %
%
Japan -0.05 -2.37 <.N2 0.19 6.05
25>
China <CNY=CFXS -0.04 +0.26 <.SS 0.67 5.76
> EC>
India +0.18 +0.46 <.NS 0.90 -5.02
EI>
Indonesi +0.10 +1.30 <.JK 0.14 -2.91
a SE>
Malaysia +0.27 -1.57 <.KL 0.77 -6.08
SE>
Philippi +0.39 +1.54 <.PS 1.08 -1.58
nes I>
S.Korea <KRW=KFTC +0.88 -2.71 <.KS 1.42 6.52
> 11>
Singapor +0.23 -0.15 <.ST 1.14 -2.64
e I>
Taiwan +0.11 +0.40 <.TW 0.73 9.44
II>
Thailand +0.13 +0.25 <.SE 2.25 -6.62
TI>
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Graphic: World FX rates Asian stock markets ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Navya Mittal in Bengaluru; Editing by Simon Cameron-Moore)
