Emerging Markets: Philippine peso, equities steady after cenbank holds rates

LG

27/06/2024 09:23

(.)

        * 
      Most Asian currencies largely unchanged
    

        * 
      Philippine c.bank holds rates steady
    

        * 
      Philippine c.bank says rate cut in August is possible
    

        * 
      U.S. PCE inflation data in focus
    

  
    By Roshan Thomas
       June 27 (Reuters) - The Philippine peso and equities in
Manila maintained their modest gains after the central bank kept
its interest rate unchanged on Thursday as widely expected,
while shares in South Korea fell to mark their sharpest decline
in over two weeks.
    The Philippine peso  PHP= , which rose modestly before the
decision, was steady after the Bangko Sentral ng Pilipinas (BSP)
maintained its policy rate for a sixth straight meeting, as
expected in the Reuters poll.
    Equities in the country  .PSI  advanced slightly up to 1.2%
to touch their highest level in more than a week, and were on
track to log their fourth straight day of gains.
    The central bank, however, added that its next move could
likely be a rate cut as it expected inflation to slow after a
government order slashing tariffs on rice takes effect. 
    "We see the risk of further upside pressure on the PHP if
the central bank chooses to cut rates much ahead of the Fed,"
said Alan Lau, FX strategist at Maybank.
    Elsewhere, South Korean shares  .KS11  tumbled more than 1%,
rattled by disappointing forecasts from U.S. chipmaker Micron.
    Regional currencies showed limited movement, with the
Indonesian rupiah  IDR=  and the Malaysian ringgit  MYR= 
slightly weaker against the dollar  =USD , which remained near a
two-month peak ahead of the U.S. inflation data due on Friday.
    A robust inflation print would delay expectations of
interest rate cuts, bolstering the dollar and putting pressure
on emerging market assets.
    The data would likely be relatively benign, according to
Eugene Yuming Leow, a rates strategist at DBS. "This could
perhaps ease some of the headwinds for EM (emerging market)
assets."
    As the first half of 2024 draws to a close, most Southeast
Asian currencies are deep in the negative territory, with the
Thai baht  THB=TH  and the Indonesian rupiah emerging as the
worst performers.
    "Investors are constantly on the lookout for better returns
on their investments," said Ruben Carlo O. Asuncion, chief
economist at the Union Bank of Philippines. 
    "With the U.S. Fed projecting to potentially cut lesser than
expected for this year, one would expect investment value
slanting toward USD-denominated investments."
    Stocks in Taiwan  .TWII , which soared last week in tandem
with their U.S. peers riding on the Nvidia wave, fell as much as
1%. Chipmaking giant TSMC down more than 1%.
    In China, the Shanghai composite index  .SSEC  lost 0.8%,
while shares in Thailand  .SETI  lost 0.7%. In contrast,
equities in Indonesia  .JKSE  and Singapore  .STI  were up 0.8%
and 0.4% respectively.
              
    HIGHLIGHTS:    
    ** Indonesian 10-year benchmark yields tick higher to 7.124%
    ** Japan finance minister says concerned over weak yen
impact on economy
    ** Japanese yen languishes near a 38-year low; struggles on
weaker side of 160/dollar
    ** South Korea to extend won trading hours from Monday
    
 Asia stock                                                                    
 indexes and                                                                   
 currencies                                                                    
 at 0704 GMT                                                                   
 COUNTRY      FX          FX            FX          INDEX    STOCKS            STOCKS
                RIC         DAILY %       YTD %                DAILY %           YTD %
 Japan         JPY=       +0.24         -12.06       .N225   0.82              17.56
 China         CNY=CFXS   -0.03         -2.35        .SSEC   -0.85             -0.93
 India         INR=IN     +0.11         -0.32        .NSEI   0.47              10.36
 Indonesia     IDR=       -0.07         -6.20        .JKSE   0.67              -4.41
 Malaysia      MYR=       -0.15         -2.69        .KLSE   -0.41             8.92
 Philippines   PHP=       +0.15         -5.82        .PSI    1.23              -0.92
 S.Korea       KRW=KFTC   +0.21         -7.06        .KS11   -0.29             4.85
 Singapore     SGD=       +0.10         -2.79        .STI    0.36              3.19
 Taiwan        TWD=TP     +0.00         -5.58        .TWII   -0.35             27.75
 Thailand      THB=TH     +0.09         -7.37        .SETI   -0.63             -7.42
 

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Graphic: World FX rates     https://tmsnrt.rs/2RBWI5E
Asian stock markets    https://tmsnrt.rs/2zpUAr4
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Roshan Thomas in Bengaluru; Editing by Jamie
Freed and Janane Venkatraman)
 ((Roshan.Thomas@thomsonreuters.com))