Asian stocks, FX climb on US rate outlook ahead of payrolls data

Reuters

Asian stocks, FX climb on US rate outlook ahead of payrolls data

5. Jul. 2024 um 6:17 vorm. GMT

<html xmlns="http://www.w3.org/1999/xhtml"><head><title>EMERGING MARKETS-Asian stocks, FX climb on US rate outlook ahead of payrolls data</title></head><body>

South Korean stocks hit highest since Jan 2022

Taiwan stocks climb to record high

Inflation data from Taiwan, Thailand due later in the day

By Ayushman Ojha

July 5 (Reuters) -Most Asian currencies inched higher on Friday versus a weaker dollar, while stock markets were set for weekly gains as soft U.S. labour market data buoyed expectations of interest rate cuts by the Federal Reserve later this year.

The South Korean won KRW=KFTC strengthened 0.2% and the Singapore dollar SGD= inched 0.1% higher.

Both the Indonesian rupiah IDR= and the Taiwanese dollar edged up 0.1%.

The Philippine peso PHP= was largely flat after data showed the country's annual inflation eased in June for the first time in five months.

"Today's print gives us more confidence that the Bangko Sentral ng Pilipinas (BSP) will likely start easing from August," Barclays analysts said.

The peso would be a key factor to watch when gauging whether or not the BSP has the ability to ease rates ahead of the U.S. Fed, without spurring unwanted currency depreciation, analysts at ING said.

Market focus will shift to inflation prints from Taiwan and Thailand later in the day, though Bank of Thailand Chief Sethaput Suthiwartnarueput said there is no need to cut interest rates despite the country's slow economic recovery.

The government has been at loggerheads with the central bank for months over interest rates, with Thailand Prime Minister Srettha Thavisin calling for a rate cut to kick-start the economy.

The baht THB=TH was 0.1% higher, but has fallen 7.2% so far this year, while Thai stocks .SETI have lost nearly 8% in 2024.

Most equities in the region were trading higher amid the prospect of U.S. rate cuts for September. Investors now await payrolls data, due later in the day, to further assess the rate outlook.

Traders are now pricing in a 73% chance of a cut in September, up from about 66% a week earlier, according to the CME's FedWatch tool.

South Korean stocks .KS11 led the gains amid emerging Asian equities, rising as much as 1.7% to their highest levels since January 2022.

The benchmark index was lifted by upbeat performance in Samsung Electronics 005930.KS after the multi-national electronics company estimated a more than 15-fold rise in its second-quarter operating profit.

Stocks in Indonesia .JKSE gained 0.8% and were set for a 2.7% weekly rise, while Taiwan equities climbed 0.5% to scale a record high.

Manila shares .PSI were up 0.4% after the release of the inflation data, while Singapore stocks .STI fell nearly 1%, but poised for their best weekly gain since April 22.

Traders will be on the lookout next week for policy rate decisions in South Korea and Malaysia, as well as China's June inflation print and Singapore's first-quarter economic growth estimates.

HIGHLIGHTS:

** Japan household spending unexpectedly falls, clouds BOJ rate path

** China's central bank has hundreds of billions of yuan of bonds at its disposal to cool long rally

** Indonesia budget committee to give widest room possible to next government

Asia stock indexes and currencies at 0522 GMT
COUNTRY	FX RIC	FX DAILY %	FX YTD %	INDEX	STOCKS DAILY %	STOCKS YTD %
Japan	JPY=	+0.32	-12.24	.N225	-0.15	22.08
China	CNY=CFXS	+0.02	-2.34	.SSEC	-1.03	-1.60
India	INR=IN	+0.01	-0.33	.NSEI	-0.26	11.54
Indonesia	IDR=	+0.12	-5.58	.JKSE	0.42	-0.30
Malaysia	MYR=	+0.02	-2.46	.KLSE	-0.14	10.98
Philippines	PHP=	-0.04	-5.42	.PSI	0.43	1.32
S.Korea	KRW=KFTC	+0.17	-6.58	.KS11	0.97	7.42
Singapore	SGD=	+0.10	-2.31	.STI	-0.82	5.29
Taiwan	TWD=TP	+0.08	-5.29	.TWII	0.13	31.36
Thailand	THB=TH	+0.07	-6.59	.SETI	0.24	-7.89