*
April inflation data in China highlights sputtering demand
*
Benchmark in Indonesia top loser, hits over a month low
*
Thai baht falls ahead of upcoming general election
By Mehr Bedi May 11 (Reuters) - Asian currencies reversed gains, while equities in the region were mixed on Thursday, after readings showing weakness in China's post-COVID recovery took the spotlight from softer U.S. inflation data, and sparked concerns around global outlook.
The South Korean won and Indonesian rupiah started the day on a positive note but depreciated 0.1% each against a strengthening greenback. The firmer U.S. dollar followed the release of Chinese data showing consumer inflation almost flat-lined last month, after an unexpected decline in imports earlier in the week had already raised a red flag. The Shanghai SE Composite Index slipped 0.2%, while the Hong Kong benchmark index was off 0.4% while the yuan depreciated 0.1%. "The April (China) inflation prints highlight that general pricing power remains soft despite ongoing post-COVID rebound in economic activity," JP Morgan analysts said in a note. "Looking ahead, sustained growth recovery, broad-based improvement in labour market conditions and households' income and employment expectations will be needed to support pricing power for general goods and services," the analysts added about the world's second-largest importer of goods. U.S. Labor Department data overnight revealed consumer prices in April rose 4.9% from a year ago, compared with expectations of a 5% increase, potentially providing cover for the Federal Reserve to pause further interest rate hikes. Money markets are currently pricing in a 96.2% chance that the Fed will keep rates on hold at its next meeting in June, and expect rate cuts to begin in July through to the end of the year. Shares in the region were mixed tracking its Wall Street peers with equities in Jakarta leading losses.
Stocks in Indonesia fell 1.2%, with broad-based losses in energy, consumer goods, and financials as China is Indonesia's biggest trade partner and a major source of foreign investment.
Investors in Thailand took a cautious stance ahead of the country's general election on Sunday, with the Thai baht weakening 0.3%. Earlier this week, an announcement by Thai billionaire Thaksin Shinawatra — the country's first democratically elected prime minister to serve a full term — about plans to return to the country after 17 years caused a stir among voters with implications for the vote and the inevitable horse-trading afterwards to form a government, analysts say.
HIGHLIGHTS
China and U.S. debt woes may dominate G7 finance chiefs'
talks ECB's Centeno says interest rates near peak, could ease in
2024 South Korea to drop mandatory 7-day quarantine for COVID
patients from June COUNTRY FX RIC FX FX INDE STOCKS STOCKS
DAILY % YTD % X DAILY YTD %
%
Japan -0.01 -2.42 <.N2 0.02 11.62
25>
China <CNY=CFXS -0.13 -0.54 <.SS -0.30 7.12
> EC>
India -0.12 +0.78 <.NS -0.03 1.13
EI>
Indonesi -0.10 +5.63 <.JK -1.14 -1.70
a SE>
Malaysia +0.00 -1.26 <.KL 0.05 -4.62
SE>
Philippi -0.09 -0.14 <.PS 0.32 1.72
nes I>
S.Korea <KRW=KFTC -0.11 -4.66 <.KS -0.22 11.38
> 11>
Singapor -0.20 +0.93 <.ST -0.60 -0.87
e I>
Taiwan -0.03 -0.10 <.TW -0.81 9.74
II>
Thailand -0.49 +2.43 <.SE -0.10 -6.03
TI>
(Reporting by Mehr Bedi in Bengaluru; Editing by Kim Coghill and Uttaresh Venkateshwaran)
