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Asian FX, stocks cheer U.S. data; Indonesia rates in focus

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Most Asian currencies and equities

were firmer on Thursday, with the mood buoyed by a rebound in

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U.S. consumer confidence and as markets awaited a likely rate

hike from Bank Indonesia.

The South Korean won rose 0.7% to trade at 1,277

to the dollar, its strongest since June, while the Singapore

dollar strengthened 0.3%.

Data from the United States showed December consumer

confidence at an eight-month high, rebounding more than

expected, as inflation pulled back and the labor market

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remained strong.

Wall Street indexes logged their biggest daily gains so far

this month on Wednesday, further helped by positive earnings

reports.

“Apparently, markets are no longer taking good (data)

news to be bad (policy) news,” said Mizuho Bank analyst Vishnu

Varathan. “That teeters on over-confidence of a ‘Goldilocks’

boost to U.S. consumer confidence that will lift the economy

(and markets), but not lead to hawkish outcomes.”

However, the U.S. data also showed fewer households planning

to make big-ticket purchases over the next six months,

indicating fears of a recession had not evaporated.

“For now, a low-volume environment and limited catalysts may

aid to provide a temporary breather for the risk environment,”

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said Yeap Jun Rong, a market analyst at IG.

The positive data also put pressure on the U.S. currency,

with the dollar index last seen around 103.94, 0.3%

lower, which also helped Asian currencies.

Indonesia’s rupiah was steady at 15,587 per dollar,

ahead of the central bank’s policy decision later in the day.

Bank Indonesia is expected to deliver a 25 basis point (bps)

hike to the 7-day reverse repo rate, after three consecutive 50

basis points hikes, a Reuters poll showed.

“Not only must Bank Indonesia remain vigilant to still

sticky underlying inflation…macro-stability risks from hawkish

Fed jolts remain a non-negligible risk and Bank Indonesia’s

biggest bugbear” Varathan said.

The Indonesian benchmark yield eased and was

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last seen at 6.920%, 0.9 bps lower. Malaysian and

Philippine yields were unchanged at 4.052% and

6.942%, respectively.

Indonesian stocks also fell 0.2%, while nearly all

other equity markets in the region trended higher.

Taiwan equities gained the most, rising 1.2% led by

semiconductor stocks, while South Korea’s stocks were

0.7% higher. Philippine and Singapore stocks also

gained 0.9% and 0.6%, respectively.

HIGHLIGHTS:

** India’s govt expected to focus on fiscal consolidation in

upcoming national budget, slowing growth to limit spending,

finds Reuters poll

** Thailand 2-year bond auction fetches average accepted

yield of 1.26533%

** Taiwan stock index pulled up by Taiwan Semiconductor

Manufacturing up 1.9%, MediaTek up 1.5%

Asia stock indexes and currencies at

0317 GMT

COUNTRY FX RIC FX FX YTD INDEX STOCKS STOCKS

DAILY % DAILY YTD %

% %

Japan +0.59 -12.61 0.40 -7.99

China +0.06 -8.91 0.46 -15.31

India 0.00 -10.24 0.00 4.87

Indonesia -0.03 -8.60 -0.16 3.47

Malaysia +0.09 -6.00 0.09 -6.62

Philippines +0.01 -7.42 0.77 -7.74

S.Korea +0.68 -6.91 0.82 -21.14

Singapore +0.27 +0.13 0.49 4.76

Taiwan +0.14 -9.71 1.19 -20.94

Thailand -0.01 -3.69 0.24 -2.64

(Reporting by Harshita Swaminathan; Editing by Jacqueline Wong)

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