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Indonesian rupiah at more than 2-month high
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Stocks in Thailand lead losses
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U.S inflation reading in spotlight
By Navya Mittal April 12 (Reuters) - Southeast Asian currencies gained some momentum on Wednesday led by the Indonesian rupiah, ahead of a closely-watched U.S inflation print set to influence the Federal Reserve's rate hike stance.
The Indonesian rupiah , one of the best performing currencies this year, led the gains appreciating 0.2%. Its counterparts in Malaysia, Philippines and Thailand rose marginally. After last week's solid U.S jobs data, the market's focus has shifted to the inflation report due later on Wednesday that will provide clues on the path of the Fed's monetary policy tightening.
Markets are currently pricing in a nearly 74% chance of a 25 basis point hike at the end of the Fed monetary policy meeting in May, while also betting on rate cuts before year-end. The International Monetary Fund on Tuesday downgraded its global growth outlook for this year and warned that lurking financial system vulnerabilities could erupt into a new crisis and slam global growth this year, but urged member countries to keep tightening monetary policy to fight persistently high inflation.
Short-term U.S. dollar rallies should be met with scepticism in light of the broader macroeconomic landscape, TD Securities analysts wrote in a note.
In Southeast Asia, the rupiah hit a more than two-month high after an Indonesia court overturned a lower court's controversial order to delay the 2024 national elections by two years. The move eased political uncertainty in the world's third-largest democracy.
"The Fed reaching its terminal rate is helping Indonesia as it benefits from portfolio inflows given its high yield and rather resilient growth. Inflation is easing in Indonesia, boosting real rates," said Trinh Nguyen, senior Asia economist at Natixis.
Indonesia's benchmark 10-year yield fell by 1.4 basis points to 6.66% after the government raised 16.05 trillion rupiah ($1.08 billion) in a regular debt auction, lower than its indicative target of 17 trillion rupiah. Shares across the region tracked Wall Street lower, with stocks in Manila and Thailand leading the losses. Equities in Singapore fell 0.4% ahead of it monetary policy meeting. According to a Reuters poll, the country's economy is likely to expand at a slower pace in the first quarter, with expectations that the central bank will make no changes to monetary policy.
Highlights
** Sri Lanka central bank says sovereign lenders yet to
outline debt talks plans
** Singapore's 10-year benchmark yield rises to 2.774%
** IMF trims India's growth forecast to 5.9% for current
fiscal year Asia stock indexes and currencies
at 0408 GMT
COUNTRY FX RIC FX FX INDE STOCKS STOCKS
DAILY % YTD % X DAILY YTD %
%
Japan -0.16 -2.06 <.N2 0.57 9.20
25>
China <CNY=CFXS -0.02 +0.19 <.SS 0.47 7.77
> EC>
India +0.07 +0.80 <.NS 0.05 -2.07
EI>
Indonesi +0.18 +4.78 <.JK -0.26 -0.83
a SE>
Malaysia +0.07 -0.29 <.KL -0.23 -4.20
SE>
Philippi +0.09 +1.22 <.PS -0.47 -1.79
nes I>
S.Korea <KRW=KFTC -0.18 -4.54 <.KS 0.17 14.12
> 11>
Singapor +0.05 +0.60 <.ST -0.39 1.04
e I>
Taiwan -0.07 +0.70 <.TW 0.07 12.64
II>
Thailand +0.01 +0.96 <.SE -0.80 -5.05
TI>
($1 = 14,847.0000 rupiah) <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Graphic: World FX rates Asian stock markets ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Navya Mittal in Bengaluru; Editing by Jamie Freed)
