EMERGING MARKETS – Asian Currencies Lose as Recession Risks and Geopolitics Weigh

Band Harshita Swaminathan

April 1 (Reuters)Most Asian currencies weakened on Friday as a combination of recessionary risks from brief U.S. Treasury yield curve inversions and Russia-Ukraine peace talks making little progress boosted selling. risky assets.

Thai baht THB=TH fell 0.3% to trade at 33.35 to the dollar, ending a three-day winning streak, while the Singapore dollar CAD= and malaysian ringgit MYR= lost about 0.1% each.

The gap between two years US2YT=RR and 10 years US10YT=RR Yields on US Treasuries remained extremely thin as the yield curve briefly inverted twice in the space of a few hours, further fueling fears of a recession in the world’s largest economy.

“The likelihood of an inverted yield curve and inferred recession risks continue to infiltrate the global macro narrative,” Mizuho Bank analyst Vishnu Varathan said in a note.

Bond yields in Asia rose slightly, with benchmark 10-year yields in Singapore SG10YT=RR and Indonesia ID10YT=RR ticking 34 basis points and 6 basis points respectively.

Talks between Russia and Ukraine are also expected to resume later on Friday as Ukraine braces for further attacks. Russian President Vladimir Putin has also asked Europe to pay in rubles for its gas imports, threatening to cut off supplies.

Among the currencies, the Philippine peso PHP= remained buoyant, gaining 0.2%, in its second consecutive session of gains, while the Indonesian rupiah RDI= advanced by 0.1%.

“Recent comments on policy normalization by BSP Governor Diokno as well as a bearish turn in oil appear to support PHP sentiments,” Maybank analysts said in a note.

Media quoted the head of the central bank of the Philippines as saying that the central bank plans to begin policy normalization in the second half of the year and that interest rates could reach 2.75% by 2023.

Philippine stocks, however, fell 1.3%.

Oil prices also fell after the announcement that the United States would release 1 million barrels of oil a day, the largest release ever from strategic reserves, to stifle soaring prices. WHERE

Meanwhile, consumer price growth in Indonesia beat market expectations and hit a two-year high in March, but remained within the central bank’s target range.

“Any further signs of price pressure could see (Bank of Indonesia) start raising rates sooner rather than later,” Maybank analysts added.

The US dollar =USD also found support ahead of a jobs report, which is expected to show falling unemployment, further bolstering the case for a more aggressive rate hike at the Federal Reserve’s next policy meeting in May.

Among equities, the Shanghai markets .SSEC jumped 0.6%, is expected to end the week up 1.9% despite a COVID lockdown there.

Other stocks were mixed, with markets in Kuala Lumpur .KLSE up 0.3% while those in Jakarta .JKSE 0.1% drop.

STRONG POINTS:

** GT Capital Industrials GTCAP.PSSM investments SM.PS and JG Summit JGS.PS the main losers in the Philippine index, down 2.1% to 2.7% each

** Japanese Yen JPY= fixed for a weekly loss of 0.4%

**Singapore opens to fully vaccinated travelers today, no quarantine required, COVID travel pass

Asian stock indices and currencies at 02:13 GMT

THE COUNTRY

FXRIC

DAILY FX %

FX YTD%

INDEX

DAILY STOCKS %

INVENTORY YTD %

Japan

JPY=

-0.75

-6.12

.N225

-0.40

-3.75

China

CNY=CFXS

-0.20

+0.05

.SSEC

0.62

-10.09

India

RNI=IN

+0.00

-1.92

.NSEI

0.20

0.84

Indonesia

RDI=

+0.08

-0.75

.JKSE

-0.13

7.31

Malaysia

MYR=

-0.12

-1.05

.KLSE

0.32

1.59

Philippines

PHP=

+0.20

-1.19

.PSI

-1.24

-0.12

South Korea

KRW=KFTC

-0.30

-2.21

.KS11

-0.64

-7.98

Singapore

CAD=

-0.07

-0.50

.STI

0.05

9.17

Taiwan

TWD=TP

-0.29

-3.54

.TWII

-0.70

-3.56

Thailand

THB=TH

-0.33

+0.09

.SETI

-0.04

2.23

(Reporting by Harshita Swaminathan; Editing by Lincoln Feast.)

(([email protected]))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

About Joel Simmons

Check Also

UK recession: what does it mean for me and will it impact jobs?

The UK is in the early stages of what could be a major economic crisis …