Articles
11 March 2022

Asia Morning Bites

Sentiment remains fragile as investors digest US inflation report and Fed hike prospects amidst ongoing conflict

Macro outlook

  • Global: Talks between Russia and Ukraine did not deliver anything concrete yesterday, nor was there any follow up on the UAE OPEC+ noise on crude production, yet despite this, markets only retraced some of their gains of the previous day. Front-month Brent crude futures sit at about $109/bbl now, and gold is back just below $2000/oz. EURUSD drifted back to just below 1.10 as US equities staged modest declines though there appears still to be some buying interest as futures markets remain positive. The EURUSD move might have gone further but the more hawkish than expected ECB meeting will have lent the single currency some support. Markets are now pricing in rate hikes in the Eurozone before the year-end. US Treasury yields continued to nose higher helped by the 7.9% YoY headline CPI release from the US yesterday. Asian FX saw some slight reversals from the previous day led by KRW, IDR and INR.

    A light macro calendar in the G-7 today with University of Michigan consumer sentiment data and inflation expectations data topping the bill.

  • Philippines: January trade figures are out today. Philippine exports and imports should sustain double-digit gains although import flows are expected to outpace outbound shipments. Imports may continue their recent trend of strong growth, resulting in a widening trade deficit. In the coming months, surging crude oil prices will likely bloat the oil import bill further, exerting additional depreciation pressure on the peso.

What to look out for: Geopolitical developments

  • Philippines trade balance (11 March)
  • US Michigan sentiment (11 March)
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