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Rashmi Ashok

EMERGING MARKETS-Rupiah stumbles, Indian rupee soars; stocks track weekly gains

03 Jul 2020

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh * Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA * Indonesian rupiah slips to lowest since May 29 * India's rupee hits 3-month peak at 74.60 per dollar * Asian stocks, ex-Japan, set for weekly gains By Rashmi Ashok July 3 The Indonesian rupiah slipped nearly 2% on Friday on worries about inflationary risks from its central bank buying low-yielding bonds, while the Indian rupee hit a three-month high on expected inflows and non-intervention by the central bank. The rupiah headed for a loss of more than 2.6% against the dollar this week, its biggest weekly fall since the near 8% plunge it recorded in mid-March during a severe dollar funding shortage in Asian markets. Investors turned cautious after Bank Indonesia (BI)on Monday agreed to 'share the burden' with the government and buy bonds with even zero yields to help finance a fiscal deficit bloated by spending to tackle the coronavirus outbreak. When an emerging economy is purchasing a bond with its own currency instead of the U.S. dollar, it creates inflation... the central bank is creating this money from nowhere, said Margaret Yang, strategist at DailyFX. "The U.S. Federal Reserve is doing exactly the same thing, but the situation there is different because the dollar is a world currency, so that money supply is not just sitting within the United States but also circulating to the rest of the world." BI Deputy Governor Dody Budi Waluyo said on Friday the pressure on the rupiah during the week was due to domestic factors such as fear of a second wave of COVID-19 infections. The Indian rupee extended Thursday's gains to climb to 74.6, its highest since March 27, as investors bet on further declines in the dollar amid expectations of further inflows, with support from the central bank's non-intervention in the spot market. The central bank, which has been aggressively buying dollars in recent weeks, stayed away on Thursday, triggering a massive rally in the rupee. Except Japan, all Asian stocks were headed for weekly gains, led by a 5% rise for Chinese shares. The gains came after data that the U.S. economy created jobs at a record pace in June, while a private survey showed that China's services sector expanded at the fastest clip in over a decade in June as consumer demand recovered. In the coming week, focus will be on Bank Negara Malaysia's policy meeting where the central bank is expected to cut interest rates to a historic low to stem the economic fallout from the pandemic, according to a Reuters poll found. HIGHLIGHTS: ** Top gainers on the Singapore STI include CapitaLand Commercial Trust up 2.29% and Jardine Cycle & Carriage Ltd up 2.24% ** Among top gainers on the Jakarta stock index were Bank Harda Internasional up 34.95% and Kedawung Setia Industrial up 20.81% ** Thailand's 3-year benchmark yield was up 1 basis points at 0.6%​​ while Malaysia's 3-year benchmark yield was down 0.9 basis points at 2.191%​​ Asia stock indexes and currencies at 0702 GMT COUNTRY FX RIC FX FX YTD INDEX STOCK STOCKS DAILY % S YTD % % DAILY % Japan -0.01 +1.04 0.72 -5.71 China <CNY=CFX +0.03 -1.43 1.89 3.24 S> India +0.16 -4.69 0.61 -12.76 Indones -1.68 -4.60 0.54 -20.73 ia Malaysi -0.02 -4.55 0.52 -2.80 a Philipp +0.48 +2.40 0.13 -18.46 ines S.Korea <KRW=KFT +0.12 -3.52 0.80 -2.06 C> Singapo +0.04 -3.55 0.80 -17.53 re Taiwan +0.47 +2.23 0.88 -0.73 Thailan +0.10 -3.70 0.04 -12.99 d (Reporting by Rashmi Ashok in Bengaluru; Editing by Sriraj Kalluvila)

EMERGING MARKETS-Rupiah stumbles, Indian rupee soars; stocks track weekly gains

03 Jul 2020

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh * Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA * Indonesian rupiah slips to lowest since May 29 * India's rupee hits 3-month peak at 74.60 per dollar * Asian stocks, ex-Japan, set for weekly gains By Rashmi Ashok July 3 The Indonesian rupiah slipped nearly 2% on Friday on worries about inflationary risks from its central bank buying low-yielding bonds, while the Indian rupee hit a three-month high on expected inflows and non-intervention by the central bank. The rupiah headed for a loss of more than 2.6% against the dollar this week, its biggest weekly fall since the near 8% plunge it recorded in mid-March during a severe dollar funding shortage in Asian markets. Investors turned cautious after Bank Indonesia (BI)on Monday agreed to 'share the burden' with the government and buy bonds with even zero yields to help finance a fiscal deficit bloated by spending to tackle the coronavirus outbreak. When an emerging economy is purchasing a bond with its own currency instead of the U.S. dollar, it creates inflation... the central bank is creating this money from nowhere, said Margaret Yang, strategist at DailyFX. "The U.S. Federal Reserve is doing exactly the same thing, but the situation there is different because the dollar is a world currency, so that money supply is not just sitting within the United States but also circulating to the rest of the world." BI Deputy Governor Dody Budi Waluyo said on Friday the pressure on the rupiah during the week was due to domestic factors such as fear of a second wave of COVID-19 infections. The Indian rupee extended Thursday's gains to climb to 74.6, its highest since March 27, as investors bet on further declines in the dollar amid expectations of further inflows, with support from the central bank's non-intervention in the spot market. The central bank, which has been aggressively buying dollars in recent weeks, stayed away on Thursday, triggering a massive rally in the rupee. Except Japan, all Asian stocks were headed for weekly gains, led by a 5% rise for Chinese shares. The gains came after data that the U.S. economy created jobs at a record pace in June, while a private survey showed that China's services sector expanded at the fastest clip in over a decade in June as consumer demand recovered. In the coming week, focus will be on Bank Negara Malaysia's policy meeting where the central bank is expected to cut interest rates to a historic low to stem the economic fallout from the pandemic, according to a Reuters poll found. HIGHLIGHTS: ** Top gainers on the Singapore STI include CapitaLand Commercial Trust up 2.29% and Jardine Cycle & Carriage Ltd up 2.24% ** Among top gainers on the Jakarta stock index were Bank Harda Internasional up 34.95% and Kedawung Setia Industrial up 20.81% ** Thailand's 3-year benchmark yield was up 1 basis points at 0.6%​​ while Malaysia's 3-year benchmark yield was down 0.9 basis points at 2.191%​​ Asia stock indexes and currencies at 0702 GMT COUNTRY FX RIC FX FX YTD INDEX STOCK STOCKS DAILY % S YTD % % DAILY % Japan -0.01 +1.04 0.72 -5.71 China <CNY=CFX +0.03 -1.43 1.89 3.24 S> India +0.16 -4.69 0.61 -12.76 Indones -1.68 -4.60 0.54 -20.73 ia Malaysi -0.02 -4.55 0.52 -2.80 a Philipp +0.48 +2.40 0.13 -18.46 ines S.Korea <KRW=KFT +0.12 -3.52 0.80 -2.06 C> Singapo +0.04 -3.55 0.80 -17.53 re Taiwan +0.47 +2.23 0.88 -0.73 Thailan +0.10 -3.70 0.04 -12.99 d (Reporting by Rashmi Ashok in Bengaluru; Editing by Sriraj Kalluvila)

EMERGING MARKETS-Rupiah tumbles on debt monetization concerns, spike in virus cases

03 Jul 2020

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh * Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA * Indonesian rupiah hits lowest since May 29 * BI plans purchase of low-yield bonds * Focus next week: Malaysia's c.bank policy meet on Tuesday By Rashmi Ashok July 3 The Indonesian rupiah fell nearly 2% on Friday and was set for its biggest weekly drop since March as worries about its central bank buying low-yielding government bonds persisted, while broader Asian stocks were boosted by robust U.S. jobs data. The rupiah is heading for a loss of more than 2.6% this week, its biggest weekly fall since the near 8% plunge it recorded in mid-March during a severe dollar funding shortage in Asian markets. Investors became concerned after Bank Indonesia (BI) on Monday agreed to 'share the burden' with the government and buy bonds with even zero yields to help finance a fiscal deficit bloated by spending to tackle the coronavirus. "We expect concerns over the planned burden-sharing arrangement to hurt market sentiment in the near term with rupiah likely facing marginal depreciation with Bank Indonesia capping any sharp weakening trend," analysts at ING said in a note. BI Deputy Governor Dody Budi Waluyo said on Friday the pressure on the rupiah during the week was due to domestic factors such as fear of a second wave of COVID-19 infections, adding that recent indicators showed the economy could avoid a recession despite weak growth in the second quarter. Indonesia reported a record jump in daily new coronavirus infections on Thursday, and its capital Jakarta delayed a full exit from a partial lockdown due to the spike in cases. The Thai baht eased slightly and was poised for a four-day losing streak. Inflation data for June is expected later in the session and seen slightly less negative owing to relaxation of movement restrictions. Most Asian shares rose, led by Chinese stocks, and buoyed by an upbeat session on Wall Street on the back of data that showed the U.S. economy created jobs at a record pace in June as more restaurants and bars reopened. Among data releases in the coming week, the highlight will be Malaysia's central bank meeting on July 7. Some analysts expect Bank Negara Malaysia will cut rates again, after cutting them in May to 2%, the lowest since 2009. HIGHLIGHTS: ** Singapore's 10-year benchmark yield fell 1.1 basis points to 0.881%​​ while the 5-year benchmark yield eased by the same margin to 0.504%​​ ** Top gainers on the Singapore STI include Thai Beverage PCL up 2.22% and CapitaLand Commercial Trust up 1.71% ** Top gainers on FTSE Bursa Malaysia Kl Index include Sime Darby Bhd up 2.39% and Press Metal Aluminium Holdings Bhd up 2.38% Asia stock indexes and currencies at 0341 GMT COUNTRY FX RIC FX FX YTD INDEX STOCK STOCKS DAILY % S YTD % % DAILY % Japan -0.02 +1.03 0.34 -6.07 China <CNY=CFX +0.01 -1.45 0.95 2.29 S> India +0.00 -4.84 0.00 -13.29 Indones -1.75 -4.67 0.43 -20.82 ia Malaysi -0.02 -4.55 0.41 -2.91 a Philipp +0.30 +2.22 -0.27 -18.79 ines S.Korea <KRW=KFT -0.08 -3.71 0.56 -2.30 C> Singapo -0.01 -3.60 0.53 -17.76 re Taiwan +0.48 +2.24 0.82 -0.80 Thailan -0.10 -3.89 -0.01 -13.03 d (Reporting by Rashmi Ashok in Bengaluru; Editing by Simon Cameron-Moore)

EMERGING MARKETS-Rupiah tumbles on debt monetization concerns, spike in virus cases

03 Jul 2020

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh * Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA * Indonesian rupiah hits lowest since May 29 * BI plans purchase of low-yield bonds * Focus next week: Malaysia's c.bank policy meet on Tuesday By Rashmi Ashok July 3 The Indonesian rupiah fell nearly 2% on Friday and was set for its biggest weekly drop since March as worries about its central bank buying low-yielding government bonds persisted, while broader Asian stocks were boosted by robust U.S. jobs data. The rupiah is heading for a loss of more than 2.6% this week, its biggest weekly fall since the near 8% plunge it recorded in mid-March during a severe dollar funding shortage in Asian markets. Investors became concerned after Bank Indonesia (BI) on Monday agreed to 'share the burden' with the government and buy bonds with even zero yields to help finance a fiscal deficit bloated by spending to tackle the coronavirus. "We expect concerns over the planned burden-sharing arrangement to hurt market sentiment in the near term with rupiah likely facing marginal depreciation with Bank Indonesia capping any sharp weakening trend," analysts at ING said in a note. BI Deputy Governor Dody Budi Waluyo said on Friday the pressure on the rupiah during the week was due to domestic factors such as fear of a second wave of COVID-19 infections, adding that recent indicators showed the economy could avoid a recession despite weak growth in the second quarter. Indonesia reported a record jump in daily new coronavirus infections on Thursday, and its capital Jakarta delayed a full exit from a partial lockdown due to the spike in cases. The Thai baht eased slightly and was poised for a four-day losing streak. Inflation data for June is expected later in the session and seen slightly less negative owing to relaxation of movement restrictions. Most Asian shares rose, led by Chinese stocks, and buoyed by an upbeat session on Wall Street on the back of data that showed the U.S. economy created jobs at a record pace in June as more restaurants and bars reopened. Among data releases in the coming week, the highlight will be Malaysia's central bank meeting on July 7. Some analysts expect Bank Negara Malaysia will cut rates again, after cutting them in May to 2%, the lowest since 2009. HIGHLIGHTS: ** Singapore's 10-year benchmark yield fell 1.1 basis points to 0.881%​​ while the 5-year benchmark yield eased by the same margin to 0.504%​​ ** Top gainers on the Singapore STI include Thai Beverage PCL up 2.22% and CapitaLand Commercial Trust up 1.71% ** Top gainers on FTSE Bursa Malaysia Kl Index include Sime Darby Bhd up 2.39% and Press Metal Aluminium Holdings Bhd up 2.38% Asia stock indexes and currencies at 0341 GMT COUNTRY FX RIC FX FX YTD INDEX STOCK STOCKS DAILY % S YTD % % DAILY % Japan -0.02 +1.03 0.34 -6.07 China <CNY=CFX +0.01 -1.45 0.95 2.29 S> India +0.00 -4.84 0.00 -13.29 Indones -1.75 -4.67 0.43 -20.82 ia Malaysi -0.02 -4.55 0.41 -2.91 a Philipp +0.30 +2.22 -0.27 -18.79 ines S.Korea <KRW=KFT -0.08 -3.71 0.56 -2.30 C> Singapo -0.01 -3.60 0.53 -17.76 re Taiwan +0.48 +2.24 0.82 -0.80 Thailan -0.10 -3.89 -0.01 -13.03 d (Reporting by Rashmi Ashok in Bengaluru; Editing by Simon Cameron-Moore)

EMERGING MARKETS-Rupiah stumbles; Philippines leads Asian share gains on vaccine hopes

02 Jul 2020

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh * Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA * Indonesian rupiah hits one-month low, down for 6th session * Baht eases 0.6% to two-week low, larger budget gap on cards * Philippines climbs nearly 3%; restrictions eased in capital By Rashmi Ashok July 2 Indonesian stocks and currency moved in opposite directions on Thursday as rate cut bets rose, while the Philippines led a rally in broader Asian shares on hopes of a coronavirus vaccine. The rupiah fell 0.8% to hit a month's low and was on track for a sixth-straight session of losses, while shares rose 0.8%. Data on Wednesday showed Indonesia's inflation rate in June slowed to narrowly miss the central bank's target range. Given the benign inflation outlook, ANZ Research analysts expect Bank Indonesia to cut rates in the third quarter, the fourth time this year. However, rupiah depreciation poses a challenge. The central bank agreed on Monday to buy low-yielding bonds to help the government fund a ballooning fiscal deficit amid surging new coronavirus cases and investors have been growing uneasy over this 'debt monetization'. "We expect the rupiah to face depreciation pressure in the coming days with the central bank stepping up its triple intervention while sentiment remains fragile," analysts at ING wrote in a note. 'Triple intervention' refers to BI's intervention in the domestic non-deliverable forwards market, the spot foreign exchange market and the bond market to stabilise the rupiah. The Thai baht eased 0.6% and was tracking towards its biggest drop since June 12 after the country's parliament began debate on a budget bill that projects a larger deficit for the 2021 fiscal year, as the government tries to prop up a flagging economy. "Robust current account surplus was one factor anchoring baht positivity earlier and this is at threat now," analysts at Maybank wrote. Broader Asian equities rallied on hopes for a COVID-19 vaccine, after an early-stage trial indicated Pfizer and Germany's BioNTech vaccine candidate was well tolerated and showed promise. Philippine stocks rose most, climbing 2.8% to hit a three-week high. The market saw a breakout today, joining Asian peers over positive results in early trials for Pfizer's experimental coronavirus vaccine, said Jennifer Lomboy, fixed-income fund manager at First Metro Asset Management in Manila. Foreign selling has dried up after weeks of sustained daily selling of more than $20 million, with foreigners net buyers for the second day in a row, she added. Plans to further ease curbs in capital city Manila also helped. https://bit.ly/2BVtU5a "Investors may have also been reacting to comments from government officials who seem to be supportive of a quick removal of mobility restrictions to jump start the economy," said Nicholas Mapa, ING's senior economist for Philippines. HIGHLIGHTS: ** Malaysia's 10-year benchmark yield slips as much as 5.8 basis points to 2.949%​​ ** In the Philippines, top index gainers were First Gen Corp adding 8% and Bank of the Philippine Islands rising 4.9% ** Top gainers on the Jakarta stock index included Bank Oke Indonesia up 33.73% and Global Teleshop up 32.19% Asia stock indexes and currencies at 0659 GMT COUNTRY FX RIC FX FX YTD INDEX STOCKS STOCKS DAILY % DAILY % YTD % % Japan -0.03 +1.04 0.11 -6.39 China <CNY=CFX +0.10 -1.45 2.11 1.30 S> India +0.13 -5.44 1.19 -13.26 Indones -0.77 -2.94 0.66 -21.47 ia Malaysi +0.02 -4.53 0.53 -4.18 a Philipp +0.11 +1.79 2.49 -18.57 ines S.Korea <KRW=KFT +0.28 -3.63 1.36 -2.83 C> Singapo +0.05 -3.48 0.36 -18.72 re Taiwan +0.51 +2.19 0.87 -1.60 Thailan -0.48 -3.80 1.19 -13.56 d (Reporting by Rashmi Ashok in Bengaluru; Editing by Sriraj Kalluvila)

EMERGING MARKETS-Rupiah stumbles; Philippines leads Asian share gains on vaccine hopes

02 Jul 2020

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh * Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA * Indonesian rupiah hits one-month low, down for 6th session * Baht eases 0.6% to two-week low, larger budget gap on cards * Philippines climbs nearly 3%; restrictions eased in capital By Rashmi Ashok July 2 Indonesian stocks and currency moved in opposite directions on Thursday as rate cut bets rose, while the Philippines led a rally in broader Asian shares on hopes of a coronavirus vaccine. The rupiah fell 0.8% to hit a month's low and was on track for a sixth-straight session of losses, while shares rose 0.8%. Data on Wednesday showed Indonesia's inflation rate in June slowed to narrowly miss the central bank's target range. Given the benign inflation outlook, ANZ Research analysts expect Bank Indonesia to cut rates in the third quarter, the fourth time this year. However, rupiah depreciation poses a challenge. The central bank agreed on Monday to buy low-yielding bonds to help the government fund a ballooning fiscal deficit amid surging new coronavirus cases and investors have been growing uneasy over this 'debt monetization'. "We expect the rupiah to face depreciation pressure in the coming days with the central bank stepping up its triple intervention while sentiment remains fragile," analysts at ING wrote in a note. 'Triple intervention' refers to BI's intervention in the domestic non-deliverable forwards market, the spot foreign exchange market and the bond market to stabilise the rupiah. The Thai baht eased 0.6% and was tracking towards its biggest drop since June 12 after the country's parliament began debate on a budget bill that projects a larger deficit for the 2021 fiscal year, as the government tries to prop up a flagging economy. "Robust current account surplus was one factor anchoring baht positivity earlier and this is at threat now," analysts at Maybank wrote. Broader Asian equities rallied on hopes for a COVID-19 vaccine, after an early-stage trial indicated Pfizer and Germany's BioNTech vaccine candidate was well tolerated and showed promise. Philippine stocks rose most, climbing 2.8% to hit a three-week high. The market saw a breakout today, joining Asian peers over positive results in early trials for Pfizer's experimental coronavirus vaccine, said Jennifer Lomboy, fixed-income fund manager at First Metro Asset Management in Manila. Foreign selling has dried up after weeks of sustained daily selling of more than $20 million, with foreigners net buyers for the second day in a row, she added. Plans to further ease curbs in capital city Manila also helped. https://bit.ly/2BVtU5a "Investors may have also been reacting to comments from government officials who seem to be supportive of a quick removal of mobility restrictions to jump start the economy," said Nicholas Mapa, ING's senior economist for Philippines. HIGHLIGHTS: ** Malaysia's 10-year benchmark yield slips as much as 5.8 basis points to 2.949%​​ ** In the Philippines, top index gainers were First Gen Corp adding 8% and Bank of the Philippine Islands rising 4.9% ** Top gainers on the Jakarta stock index included Bank Oke Indonesia up 33.73% and Global Teleshop up 32.19% Asia stock indexes and currencies at 0659 GMT COUNTRY FX RIC FX FX YTD INDEX STOCKS STOCKS DAILY % DAILY % YTD % % Japan -0.03 +1.04 0.11 -6.39 China <CNY=CFX +0.10 -1.45 2.11 1.30 S> India +0.13 -5.44 1.19 -13.26 Indones -0.77 -2.94 0.66 -21.47 ia Malaysi +0.02 -4.53 0.53 -4.18 a Philipp +0.11 +1.79 2.49 -18.57 ines S.Korea <KRW=KFT +0.28 -3.63 1.36 -2.83 C> Singapo +0.05 -3.48 0.36 -18.72 re Taiwan +0.51 +2.19 0.87 -1.60 Thailan -0.48 -3.80 1.19 -13.56 d (Reporting by Rashmi Ashok in Bengaluru; Editing by Sriraj Kalluvila)

EMERGING MARKETS-Rupiah stumbles as rate cut looms, baht eases on budget gap

02 Jul 2020

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh * Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA * Rupiah slips 0.6%, Indonesian stocks hit one-week high * Fed's accommodative stance may support inflows into Asia-analyst By Rashmi Ashok July 2 Indonesia's stocks and currency were driven in opposite directions on Thursday by rising bets for a rate cut, while the baht drifted lower on Thailand's plans for a bigger budget deficit to revive its coronavirus-battered economy. The rupiah fell 0.6% and was on track for its sixth straight losing session, after data on Wednesday showed Indonesia's inflation rate slowed further in June to hover slightly below the central bank's target range. ANZ Research analysts expect Bank Indonesia to cut rates in the third quarter - the fourth time this year - while those at ING say it will be "hard-pressed" to loosen policy in the near term given the depreciation pressure on the rupiah. The central bank agreed on Monday to buy low-yielding bonds to help the government fund a bloated fiscal deficit. "The currency has faced some weakness in recent days given the risk-off tone as COVID-19 cases spike in Indonesia and others parts of the globe with investors also growing uneasy over plans for the central bank to monetise debt," analysts at ING wrote in a note. "We expect the rupiah to face depreciation pressure in the coming days with the central bank stepping up its triple intervention while sentiment remains fragile." 'Triple intervention' refers to BI's intervention in the domestic non-deliverable forwards market, the spot foreign exchange market and the bond market to stabilise the rupiah. Indonesian stocks, however, rose 1% to a one-week high, buoyed by rate optimism and firmer regional share markets. The baht eased 0.3% after Thailand's parliament began debate on Wednesday on a budget bill that projects a larger deficit for the 2021 fiscal year starting Oct. 1, as the government tries to prop up its flagging economy. "We note that robust current account surplus was one factor anchoring baht positivity earlier and this is at threat now," analysts at Maybank wrote. Meanwhile, the U.S. Federal Reserve's dovish policy stance in latest minutes was seen supporting inflows to emerging Asia. "These discussions underscore that the Fed is keen to maintain accommodative policy for a prolonged period," said Wei Liang Chang, macro strategist at DBS Bank. "This should reassure markets, supporting portfolio flows into Asia. Nevertheless, episodic COVID-19 resurgence could keep Asian FX gains contained, as risks of a reintroduction of lockdowns are not absent." HIGHLIGHTS: ** Malaysia's 10-year benchmark yield fell 3.1 basis points to 2.95% while its 3-year yield eased 0.2 bp to 2.224%​​ ** Top gainers on the Jakarta stock index include Bank Oke Indonesia Tbk PT up 33.73% and Global Teleshop Tbk PT up 31.51% ** Top gainers on the Singapore STI include City Developments Ltd up 1.52% and Singapore Technologies Engineering Ltd up 1.52% Asia stock indexes and currencies at 0344 GMT COUNTRY FX RIC FX FX YTD INDEX STOCKS STOCKS DAILY % DAILY YTD % % % Japan -0.02 +1.05 0.65 -5.88 China <CNY=CFX +0.06 -1.49 1.13 0.33 S> India +0.00 -5.57 0.00 -14.29 Indones -0.63 -2.80 0.83 -21.34 ia Malaysi +0.02 -4.53 0.39 -4.31 a Philipp +0.08 +1.77 1.33 -19.49 ines S.Korea <KRW=KFT +0.26 -3.66 0.76 -3.41 C> Singapo +0.01 -3.52 0.33 -18.74 re Taiwan +0.46 +2.13 0.65 -1.81 Thailan -0.39 -3.70 0.41 -14.23 d (Reporting by Rashmi Ashok in Bengaluru; Editing by Jacqueline Wong)

EMERGING MARKETS-Rupiah pressured as rate cut bets rise; stocks struggle

01 Jul 2020

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh * Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA * Indonesia June inflation narrowly misses cenbank target * Expect Indonesia to make 25bps rate cut in Q3- ANZ Research By Rashmi Ashok July 1 The Indonesian rupiah eased on Wednesday as prospects of a rate cut increased after inflation came in below the central bank's target range, while broader Asian stocks struggled to retain gains as rising coronavirus cases in the United States weighed. The rupiah fell 0.5% and was set for its fifth-consecutive drop. Data showed Indonesia's inflation rate slowed further in June to 1.96%, just below the central bank's target range of 2% to 4%, fuelling expectations of more easing. "Weak price pressures support the case for a further rate cut by Bank Indonesia in the third quarter, but the timing will also be dependent on rupiah stability," analysts at ANZ Research wrote. They added they expect a 25 basis point cut, which if occurs, will be the fourth this year. The currency is already under pressure after the central bank on Monday agreed to buy low-yielding bonds, including those with zero yield, to help the government finance a bloated fiscal deficit. Bank Indonesia's purchases may stabilise the bond market, but may undermine its main policy goal of rupiah stability if debt monetization risks take hold or credit rating risks surface, analysts at Mizuho wrote in a note. The Philippine peso slipped 0.2%, in part from a surprise 50 basis point rate cut last week that sapped appreciation in the currency and sent 10-year bonds yields diving half a percentage point at the start of the week to 2.8%. Still, a bond auction on Monday was oversubscribed, indicating investor willingness to buy the country's relatively higher yielding bonds despite the rate cut. Elsewhere, Asian stocks struggled to make headway as the biggest one-day surge in coronavirus cases in the United States since the start of the pandemic dented an initial boost from data showing China's factory activity grew at a faster pace in June. Adding to concerns, the first arrest was made in Hong Kong under China's sweeping national security law aimed at increasing its control on the financial hub. Singapore's stocks traded 0.7% higher while South Korean shares turned negative, after gaining over 1% earlier. Indonesian stocks also slipped. Chinese stocks were the top performers, adding about 1.4%. HIGHLIGHTS: ** Malaysia's 10-year benchmark yield fell 0.8 basis points to 3.049%​​, while 3-year benchmark yield eased 1.2 basis points to 2.254%​​ ** Top losers on the Jakarta stock index included Yanaprima Hastapersada Tbk PT, down 7%, and Indonesia Pondasi Raya Tbk PT, which was 6.9% lower ** Top gainers on the Singapore STI included Sembcorp Industries Ltd up 4% and SATS Ltd at 2.1% higher Asia stock indexes and currencies at 0722 GMT COUNTRY FX RIC FX FX YTD INDEX STOCKS STOCKS DAILY % DAILY YTD % % % Japan +0.27 +0.91 -0.75 -6.49 China <CNY=CFX -0.03 -1.47 1.38 -0.79 S> India -0.10 -5.55 0.93 -14.55 Indones -0.49 -2.60 -0.25 -22.33 ia Malaysi +0.00 -4.51 0.52 -5.03 a Philipp -0.18 +1.64 0.03 -20.54 ines S.Korea <KRW=KFT -0.03 -3.91 -0.08 -4.14 C> Singapo -0.01 -3.50 0.64 -19.12 re Taiwan +0.56 +2.07 0.71 -2.45 Thailan -0.19 -3.36 -0.12 -15.34 d (Reporting by Rashmi Ashok in Bengaluru; Editing by Sriraj Kalluvila)

EMERGING MARKETS-Rupiah pressured as rate cut bets rise; stocks struggle

01 Jul 2020

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh * Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA * Indonesia June inflation narrowly misses cenbank target * Expect Indonesia to make 25bps rate cut in Q3- ANZ Research By Rashmi Ashok July 1 The Indonesian rupiah eased on Wednesday as prospects of a rate cut increased after inflation came in below the central bank's target range, while broader Asian stocks struggled to retain gains as rising coronavirus cases in the United States weighed. The rupiah fell 0.5% and was set for its fifth-consecutive drop. Data showed Indonesia's inflation rate slowed further in June to 1.96%, just below the central bank's target range of 2% to 4%, fuelling expectations of more easing. "Weak price pressures support the case for a further rate cut by Bank Indonesia in the third quarter, but the timing will also be dependent on rupiah stability," analysts at ANZ Research wrote. They added they expect a 25 basis point cut, which if occurs, will be the fourth this year. The currency is already under pressure after the central bank on Monday agreed to buy low-yielding bonds, including those with zero yield, to help the government finance a bloated fiscal deficit. Bank Indonesia's purchases may stabilise the bond market, but may undermine its main policy goal of rupiah stability if debt monetization risks take hold or credit rating risks surface, analysts at Mizuho wrote in a note. The Philippine peso slipped 0.2%, in part from a surprise 50 basis point rate cut last week that sapped appreciation in the currency and sent 10-year bonds yields diving half a percentage point at the start of the week to 2.8%. Still, a bond auction on Monday was oversubscribed, indicating investor willingness to buy the country's relatively higher yielding bonds despite the rate cut. Elsewhere, Asian stocks struggled to make headway as the biggest one-day surge in coronavirus cases in the United States since the start of the pandemic dented an initial boost from data showing China's factory activity grew at a faster pace in June. Adding to concerns, the first arrest was made in Hong Kong under China's sweeping national security law aimed at increasing its control on the financial hub. Singapore's stocks traded 0.7% higher while South Korean shares turned negative, after gaining over 1% earlier. Indonesian stocks also slipped. Chinese stocks were the top performers, adding about 1.4%. HIGHLIGHTS: ** Malaysia's 10-year benchmark yield fell 0.8 basis points to 3.049%​​, while 3-year benchmark yield eased 1.2 basis points to 2.254%​​ ** Top losers on the Jakarta stock index included Yanaprima Hastapersada Tbk PT, down 7%, and Indonesia Pondasi Raya Tbk PT, which was 6.9% lower ** Top gainers on the Singapore STI included Sembcorp Industries Ltd up 4% and SATS Ltd at 2.1% higher Asia stock indexes and currencies at 0722 GMT COUNTRY FX RIC FX FX YTD INDEX STOCKS STOCKS DAILY % DAILY YTD % % % Japan +0.27 +0.91 -0.75 -6.49 China <CNY=CFX -0.03 -1.47 1.38 -0.79 S> India -0.10 -5.55 0.93 -14.55 Indones -0.49 -2.60 -0.25 -22.33 ia Malaysi +0.00 -4.51 0.52 -5.03 a Philipp -0.18 +1.64 0.03 -20.54 ines S.Korea <KRW=KFT -0.03 -3.91 -0.08 -4.14 C> Singapo -0.01 -3.50 0.64 -19.12 re Taiwan +0.56 +2.07 0.71 -2.45 Thailan -0.19 -3.36 -0.12 -15.34 d (Reporting by Rashmi Ashok in Bengaluru; Editing by Sriraj Kalluvila)

EMERGING MARKETS-Philippine peso, Indonesian rupiah defensive as stocks rally

01 Jul 2020

(Repeats.) * Graphic: World FX rates http://tmsnrt.rs/2egbfVh * Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA * Indonesian rupiah down for fifth session, up 13% in Q2 * Philippine peso depreciates in wake of falling yields By Rashmi Ashok July 1 The Philippine peso and Indonesian rupiah underperformed Asian peers on Wednesday as falling local yields and pressure on the currencies from rate cuts dented their appeal, keeping them from enjoying broader gains fuelled by upbeat Chinese data. The peso eased 0.2% against the dollar, while stocks in the country slipped 1% and were on course for a third-straight week of losses. Philippine 10-year bonds saw yields dive half a percentage point at the start of the week to 2.8% and have clung to similar levels since, after the central bank unexpectedly cut interest rates by 50 basis points to a new low last week. While the rate cut - the fourth this year - sapped gains in the peso, demand for Philippines' bonds was still unaffected, with a fresh auction on Monday being oversubscribed. "Investors must come to terms with the lower yields in their global hunt, keeping in mind that such an environment is supportive of the fiscal financing needed to tackle the economic effects of COVID-19," said Han Tan, market analyst at FXTM. "Despite the recent yield drop, the Philippines still offers higher yields compared to South Korea, Thailand, and Taiwan on the 10-year benchmarks." In Indonesia, inflationary concerns lingered after the government on Monday said Bank Indonesia (BI) would buy low yielding bonds, including those with zero yield, to finance a ballooning fiscal deficit caused by spending to fight the pandemic. The rupiah fell 0.5%, declining for the fifth-straight session. Still, the currency was the top gainer in the region in the second quarter of 2020 by a wide margin, appreciating 13%. Bank Indonesia's purchases may stabilise the bond market, but may undermine its main policy goal of rupiah stability if debt monetization risks take hold or credit rating risks surface, analysts at Mizuho wrote in a note. Elsewhere, Asian equities clocked modest gains, finding support from a private survey that showed China's factory activity grew at a faster clip in June after the government lifted coronavirus lockdown measures. A positive session on Wall Street overnight and a survey showing U.S. consumer confidence rebounded in June as businesses reopened also helped, with Singapore, Taiwan and South Korean stocks adding around 1% each. HIGHLIGHTS: ** Singapore STI's top gainers included SATS and Venture Corp up 2.1% each. ** Top gainers on the Thailand's SETI include Thai OPP up 14.8% and Asia Precision rising 13.2% ** Thailand's 10-year government bond yields were up 5 basis points at 1.27%​​ while 3-year yields rose 2 basis points to 0.6%​​. Asia stock indexes and currencies at 0336 GMT COUNTRY FX RIC FX FX YTD INDEX STOCKS STOCKS DAILY % DAILY YTD % % % Japan +0.19 +0.83 -0.19 -5.96 China <CNY=CFX +0.01 -1.43 0.83 -1.34 S> India +0.00 -5.46 0.00 -15.34 Indones -0.49 -2.60 -0.24 -22.32 ia Malaysi +0.07 -4.44 0.03 -5.49 a Philipp -0.19 +1.64 -0.80 -21.21 ines S.Korea <KRW=KFT +0.10 -3.78 0.79 -3.31 C> Singapo -0.01 -3.51 0.74 -19.04 re Taiwan +0.67 +2.18 0.85 -2.31 Thailan -0.13 -3.30 0.53 -14.80 d (Reporting by Rashmi Ashok in Bengaluru Editing by Vidya Ranganathan and Sam Holmes)

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