Sunday, October 24

Thai baht set for best day in a week, Singapore stocks shed 1%


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The Thai baht rose on Friday and was on

track for its best session in a week, while Singaporean stocks

were headed for their worst day in nearly a month after the city

state reported its highest single-day rise in COVID-19 cases.

The baht has been Asia’s worst performing currency

in 2021, having weakened 11%. The Bank of Thailand’s decision

earlier this week to hold interest rates steady despite a

flagging economy is expected to help curb the baht’s

depreciation.

Other Asian currencies were mixed, as the dollar slipped off

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a one-year peak touched in the previous session but was still

headed for its best week since June.

Also weighing on sentiment were energy prices hitting record

highs overnight on reports that China was scrambling to secure

supplies for the winter. Most emerging Asian countries are net

importers of energy.

With a new surge of COVID-19 raging across Southeast Asia

and threatening the region’s economic recovery, investors will

focus next week on inflation readings from several countries

including Japan, Thailand and the Philippines.

Indonesia’s annual inflation rate in September rose to the

highest in four months.

“Chatters of stagflation concerns may gain some traction and

further undermine sentiments. KRW, INR may stay under

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pressure in the interim,” analysts at Maybank wrote in a note.

Stagflation, a portmanteau of’stagnant’ and’inflation’, is

a situation where economic growth slows or stagnates and both

Unemployment and inflation rates are high.

“Asian currencies will not have stable People’s Bank of

China’s USD/CNY fixes to lean on for support next week with

China on a holiday,” said Jeffrey Halley, a market analyst at

OANDA.

“Asia FX continues to trade to the weaker side versus the

US dollar as markets reprice the reality of Fed taper and

higher energy prices weigh on the region.”

Chinese markets are closed for a week from Friday for the

Golden Week holiday.

Inflation fears pushed Japan’s benchmark stock index

to its lowest in a month.

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Singapore shares shed up to 1.4%. The city state

reported 2,478 new COVID-19 cases on Thursday, the highest since

the beginning of the pandemic.

Indonesian equities shed 1% after officials said the

2021 budget would likely be smaller than previously anticipated.

Philippine stocks reversed early gains and were down

0.4%. Local media quoted https://www.channelnewsasia.com/asia/covid-19-philippine-economy-take-10-years-recover-pandemic-official-2213071

authorities as saying the economy would take more than a decade

to return to pre-pandemic growth.

HIGHLIGHTS:

** Malaysia’s 10-year benchmark yield is down 2.5 basis

points at 3.354%

** Singapore’s 5-year benchmark yield is down 1.9 basis

points at 0.925%​​

** Thailand’s 3-year benchmark yield is up 2 basis points at

0.68%

Asia stock indexes and currencies

at 0705 GMT

COUNTRY FX RIC FX FX INDE STOCKS STOCKS

DAILY% YTD% X DAILY YTD%

%

Japan +0.21 -7.02 <.n2>

India -0.03 -1.59 <.ns ei>

Indonesi -0.03 -1.92 <.jk a se>

Malaysia +0.12 -3.83 <.kl se>

Philippi +0.33 -5.59 <.ps nes i>

S.Korea 11>

Singapor -0.16 -2.83 <.st e i>

Taiwan -0.03 +2.18 <.tw ii>

Thailand +0.53 -11.0 <.se ti>

(Reporting by Arundhati Dutta in Bengaluru; Editing by

Subhranshu Sahu)

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