Upcoming Q1 GDP and March activity data from China

Asian FX will be largely driven by domestic economic data releases, given a light US economic calendar. China’s Q1 GDP and March activity numbers, and trade and inflation data of other Asian economies would help provide a clearer recovery pace of China and re-validate the weak exports thesis for the region in 2023 after the release of China’s strong March exports numbers.

FX views: Improved sentiment and returning capital inflows helped KRW and IDR last week, both currencies strengthened 1.4% against the dollar. In contrast, PHP was weighted by weak exports and underperformed compared with its regional currencies, weakening 1.5% against the dollar, followed by THB’s 0.5% depreciation against the dollar.

Week in review: March exports data from Taiwan, India and Philippines pointed to continued weakness in global demand, while China’s March exports gave market a positive surprise. There are reasons for the China’s strong exports in March, but it unlikely derails the thesis of weak exports of Asia this year. Consumer inflation in China, Taiwan and India continued to moderate last month.

Central bank monitor: BOK on 11th April kept its benchmark seven-day repo rate unchanged for a second straight month at 3.5% as expected. On 14th April, MAS decided to maintain its tight monetary policy stance as the balance of risks for inflation turn more two-sided and downside risks to growth materialise

Week ahead: This week’s Asian calendar features 1Q GDP and March activity data from China, exports figures from Taiwan, South Korea, Indonesia, Malaysia and Singapore, as well as rate decision from PBOC and BI.

IMF CUT GLOBAL GROWTH OUTLOOK AMID RISING FINANCIAL RISKS

Sources: Bloomberg, MUFG GMR