Most Asian stocks and currencies
extended losses on Thursday, as stronger-than-expected U.S.
retail sales data overnight strengthened the dollar, while
central banks in the Philippines and Indonesia hiked interest
rates in line with expectations.
U.S. retail sales increased more than expected in October,
indicating consumer spending picked up early in the fourth
quarter – a factor which could possibly influence the Federal
Reserve and its future pace of policy tightening.
The South Korean won fell as much as 1.5% and was
on track for its biggest drop in a month. Thailand’s baht
and Malaysia’s ringgit lost nearly 0.2%, each.
“The tug of war between inflation and recession fears
continues… It appears that global growth prospects are set for
a more dramatic slowdown into 2023 as many central banks
prioritize combating inflation over supporting growth,” OCBC
The Philippine central bank delivered a jumbo 75 basis point
(bp) hike and indicated to maintain its hawkish stance to combat
inflation. The peso reversed its course to gain 0.1%.
“BSP (Bangko Sentral ng Pilipinas) hiked rates as expected
with the central bank increasing policy rates by 75bp. With
inflation expected to remain elevated well-into 2023, the BSP
opted to push ahead with its hawkish tilt, offloading another
hefty rate hike while holding back on conducting an emergency
rate hike ” said Nicholas Mapa, senior economist at ING.
“We expect BSP to stay hawkish going into 2023, likely
matching any move by the Fed from hereon.”
Indonesia’s rupiah remained unchanged sheding nearly
0.5% amid broader market weakness, and was on track for its
sharpest daily fall in over a month despite BI delivering a
third consecutive 50-basis-point (bp) rate hike.
Most regional stock markets were mixed, with South Korea
stocks falling 1%, while Stocks in Manila and
Indonesia jumped 0.4% and 0.2%, respectively. Malaysia’s
benchmark index and Thai equities eased over
The declines were despite the Bank of Thailand forecasting
the economy to reach pre-pandemic levels towards the end of 2022
or in early 2023. Also, a Reuters poll separately predicted the
economy grew at its fastest pace in more than a year last
Another Reuters poll found short bets on major Asian
currencies had shrunk on hopes that region’s economic outlook
would benefit from easing COVID-19 curbs in China and that the
Fed would temper its rate hikes.
** U.S. Vice President Harris, Philippine President Marcos
to discuss Taiwan – diplomat
** Indonesian 10-year benchmark yields are up 0.8 basis
points at 7.011%
** Singapore’s 10-year benchmark yield is down 7.3 basis
points at 3.161%
Asia stock indexes and currencies
at 0722 GMT
COUNTRY FX RIC FX FX INDEX STOCKS STOCKS
DAILY % YTD % DAILY YTD %
Japan +0.03 -17.5 -0.35 -2.99
China -0.30 -10.7 -0.15 -14.41
India -0.32 -8.86 -0.11 5.97
Indonesi -0.51 -9.12 0.28 6.87
Malaysia -0.13 -8.40 -0.29 -7.87
Philippi +0.04 -11.1 0.18 -10.09
S.Korea -1.05 -11.2 -1.06 -17.68
Singapor -0.17 -1.68 0.40 4.98
Taiwan -0.11 -11.1 -0.01 -20.22
Thailand -0.17 -6.85 -0.46 -2.72
(Reporting by Navya Mittal; Editing by Rashmi Aich)