Saturday, December 10

Asia stocks, FX extend losses; Philippines, Indonesia c.banks hike rates

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Most Asian stocks and currencies

extended losses on Thursday, as stronger-than-expected US

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retail sales data overnight strengthened the dollar, while

Central banks in the Philippines and Indonesia hiked interest

rates in line with expectations.

US 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.

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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

analysts wrote.

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

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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 shed 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

0.3% each.

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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.


** US 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




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

Indonesia -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

nes 6

S. Korea -1.05 -11.2 -1.06 -17.68


Singapore -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)



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