The report highlights a pivotal week for central bank policy meetings globally and across Asia, cautioning that firm US inflation and Middle East geopolitical risks continue to support the USD.
Key Takeaways
- 1.Central banks in Japan, the US, and across Asia are in focus for potential rate decisions and forward guidance, amid a 'higher-for-longer' global rates backdrop.
- 2.Asian currency outlook remains cautious due to sticky US inflation and geopolitical risks in the Middle East, while central banks (e.g., Indonesia, Philippines) are taking steps to tighten policy and defend currencies.
Table of Contents
- FX views
- USD/CNY: May macro data release next week is key to watch
- USD/TWD: CBC policy rate hold likely next week
- USD/INR: Shoring up the Indian Rupee
- USD/IDR: BI steps up FX defence, but USDIDR upside risks persist
- Week in review
- Capital Flows
- Government bond yield spreads: Increased for 2y and 10y
- Central bank monitor
- The week ahead
- Forecasts
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Authors
Lin Li, PhDMichael WanLloyd ChanKhang Sek Lee
Securities
USD/CNYUSD/IDR
Themes
Higher-for-longer interest ratesGeopolitical risk in the Middle East
Regions
Asia PacificMiddle EastChinaJapanIndia