Content ID


EMERGING MARKETS-Asian stocks, FX firm after greenback takes a breather

* Philippine peso sees best day since July 29 * Asian stocks, currencies rose for a second straight session * All eyes on U.S. CPI data next week By Tejaswi Marthi Sept 9 (Reuters) - Asian stocks and currencies firmed for a second day on Friday, as the greenback paused for breath after a record-setting rally. The Singapore dollar was trading 0.5% higher and was set for its best day in nearly a month, while the Thai baht firmed 0.4% to hit its highest in two weeks. The Philippine peso and the Indonesian rupiah gained 0.4% each as well. Meanwhile, the U.S. Federal Reserve is aiming to further tighten its monetary policy stance, likely strengthening the dollar. Last night, Fed Chair Jerome Powell said the bank is "strongly committed" to controlling inflation. U.S. rate futures have priced in an 86% chance the Fed will raise rates by another 75 basis points at this month's meeting, which would increase the Fed funds rate to 3.0% to 3.25%. In addition to the larger rate hike in September, analysts at Bank of America estimate a further 25bps increase at the Fed's January meeting. "We do this based on Fed communications, where several FOMC (Federal Open Market Committee) participants have indicated a willingness to take the federal funds rate above 4.0% by early next year," the analysts wrote in a note. Investors will now look out for next week's inflation data from the U.S. for more cues on the Fed's path toward policy tightening. Analysts at ANZ expect U.S. core consumer price index (CPI) to rise 0.4% on a sequential basis, while headline CPI remains unchanged. Stocks in Asian region rallied for a second day, with Singapore up 0.7%, followed by a 0.5% climb in Thailand . Stocks in Malaysia and Philippines, too advanced. Although the ongoing recovery in risk sentiment is proving to be positive for Asia, China's slowing economy could weigh. China's consumer prices rose at a slower-than-expected pace in August amid heatwaves and COVID-19 flare-ups, suggesting that world's second-biggest economy, already depressed by property market weakness, further lost momentum last month. "While lower inflation provides Beijing with more space for monetary and fiscal easing, it reflects weak demand as a result of the new wave of the pandemic," Nomura analysts said. "Given the softer-than-expected inflation and continued growth headwinds, we expect a 25bp reserve requirement ratio (RRR) cut by the People's Bank of China (PBoC) in the fourth quarter, partly to offset the large amount of maturing medium-term lending facility (MLF) loans," analysts at Goldman Sachs said in a note. HIGHLIGHTS: ** Malaysia's industrial production in July rose 12.5% from a year earlier, but below the 15.2% estimated in a Reuters poll ** China stocks on Friday saw their biggest gain in a month, as modest inflation data and policy support hopes helped investors look past tightened COVID-19 measures ** India bans broken rice exports, imposes duty on other grades Asia stock indexes and currencies at 0627 GMT COUNTRY FX RIC FX FX INDE STOCKS STOCKS DAILY % YTD % X DAILY YTD % % Japan +0.84 -19.4 <.N2 0.53 -2.00 6 25> China <CNY=CFXS +0.32 -8.35 <.SS 0.82 -10.38 > EC> India +0.10 -6.66 <.NS 0.32 2.89 EI> Indonesi +0.32 -4.02 <.JK -0.07 9.81 a SE> Malaysia +0.09 -7.36 <.KL 0.15 -4.50 SE> Philippi +0.32 -10.3 <.PS 0.41 -7.04 nes 9 I> S.Korea <KRW=KFTC +0.25 -13.9 <.KS 0.33 -19.93 > 0 11> Singapor +0.48 -3.55 <.ST 0.71 4.23 e I> Taiwan +0.11 -10.3 <.TW 1.20 -19.95 7 II> Thailand +0.19 -8.24 <.SE 0.54 -0.53 TI> (Reporting by Tejaswi Marthi in Bengaluru)

© Copyright Thomson Reuters 2022. Click For Restrictions -

Read more about

Talk in Marketing