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Stocks in China, Hong Kong fall on weak imports figures
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US inflation data expected at 1230 GMT
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Malaysia set to report GDP data on Friday
By Mehr Bedi May 10 (Reuters) - Asian currencies and equities traded in narrow ranges on Wednesday, ahead of a critical report on U.S. inflation later in the day that will give clues on the direction of future interest rates. U.S. consumer price data for April is expected at 1230 GMT, with economists widely expecting headline CPI to hold steady at an annual 5% growth and core CPI to moderate very slightly to 5.5%, though anything stickier could confound bets that interest rates will fall. The Indonesian rupiah and South Korean won weakened 0.2% and 0.1%, respectively, while the Philippine peso added 0.2%. The Malaysian ringgit weakened by 0.1%, while stocks were 0.3% lower, with investors awaiting annual gross domestic product (GDP) data on Friday. Economists, according to a Reuters Poll, estimate the South Asian economy's growth slowed in the first quarter, hit by tepid consumption and declining exports. "In terms of monetary policy, our forecast is for no further policy rate hikes, though we note the risk of another 25 basis points increase, to 3.25%, as (the central bank) still views the policy stance as 'slightly accommodative'," said Brian Tan, an analyst at Barclays. Meanwhile, the Philippines revised downwards its fourth-quarter GDP growth to 7.1% from the previously reported 7.2%, the statistics agency said on Wednesday. Equities in China and Hong Kong slid after April's weak import figures reinforced signs of feeble domestic demand despite the lifting of COVID-19 curbs. An apparent crackdown on due diligence firms also unnerved investors. The Shanghai SE Composite index fell 1.3%, while the Hong Kong benchmark index was off 0.5%. "We think markets remain concerned around the durability of the recovery momentum and the latest data points have added to those concerns," Duncan Tan, Rates Strategist at DBS Group Research said. Some market strategists also noted that investors were watching the developments in Washington, which is grappling with the possibility of a government default as early as June 1 if Congress fails to resolve the U.S. debt ceiling deadlock. A failure to raise the limit would cause a huge hit to the U.S. economy and weaken the dollar as the world's reserve currency, Treasury Secretary Janet Yellen warned on Monday. With investors in a wait-and-watch mode, UOB Group analysts said, "We can expect further consolidation in USD/Asia within the familiar trading ranges of late."
HIGHLIGHTS:
India inflation is expected to hit an 18-month low in April,
according to Reuters Poll Southeast Asian leaders, at the ASEAN summit in Indonesia,
called for an immediate end to hostilities in military-ruled
Myanmar South Korea's current account balance in March ended a
two-month run of deficit to post a surplus COUNTRY FX RIC FX FX INDE STOCKS STOCKS
DAILY % YTD % X DAILY YTD %
%
Japan -0.10 -3.13 <.N2 -0.41 12.07
25>
China <CNY=CFXS -0.14 -0.43 <.SS -1.33 7.24
> EC>
India +0.02 +0.86 <.NS 0.03 0.92
EI>
Indonesi -0.20 +5.49 <.JK 0.44 -0.60
a SE>
Malaysia -0.09 -1.15 <.KL -0.31 -4.50
SE>
Philippi +0.16 -0.04 <.PS 0.39 1.25
nes I>
S. Korea <KRW=KFTC -0.07 -4.55 <.KS -0.54 11.63
> 11>
Singapor +0.00 +0.94 <.ST 0.03 -0.23
e I>
Taiwan -0.09 -0.07 <.TW -0.55 10.64
II>
Thailand -0.10 +2.52 <.SE 0.37 -5.88
TI>
(Reporting by Mehr Bedi in Bengaluru; Editing by Christopher
Cushing and Savio D'Souza)
