asia strategy mar-16 - mizuho bank › ... › pdf › asia_strategy_mar16.pdf · 2017-04-13 ·...

Asia FX Strategy ― Mar ‘16: February ―

No, we are not confused. We mean to say, EM/Asia will endure “February” in the months ahead. Specifically, swings between January’s “risk off” and “risk on” i n March. USD and risk appetite rebound in March, in stark contrast to the rout in January, is mostly a function of stretched “risk-off” and long USD positions caught by dovish policy surprise and less bearish Oil. But with these sentiments likely to swing rather wildly, AXJ gains are hollow and prone to abrupt payback given that fundamentals remain soft. And parallel and brutal USD shifts will dictate FX market swings to a large extent taking cues from dynamic FOMC expectation shifts. Twitchy Oil market expectations, policy divergence/negative interest rates, wobbly China stabilization and event risks such as “Brexit” will add body to volatile markets in 3-6 months before more durable pick-up in AXJ.

31 Mar 2016

Mizuho Bank, Ltd. Singapore Treasury Division

Vishnu Varathan Senior Economist [email protected] Chang Wei Liang FX Strategist [email protected]

- 1 -

Executive Summary

• USD hammered by Fed’s dovish dot plot, but steady US improvement should support. Aggressive ECB easing could cap EUR strength in the interim.

• AXJ: USD capitulation exaggerates AXJ bounce whereas “risk on” appears to be hollow given lingering uncertainties making for “fickle Feb” moves.

• CNY: Diminished volatility reveal hesitation to over-react to exaggerated USD

moves; but underlying stability reinforce, with modest gains likely further out.

• INR: Strategic FX reserve build-up by the RBI is set to back-stop any episodes of “risk off”; but could under-perform AXJ if oil p ocks up.

• SGD: Solid gains reflect surge in high-beta, heavy S$NEER components such

as MYR. MAS hold may boost upside, but watch for overarching USD shifts.

• MYR: Relief gains on dovish Fed and oil rebound, but weak commodity exports and central bank leadership transition could pose headwinds

• IDR: Better sentiment on “big-bang” reforms, but structural commodity

weakness likely to prevent further growth traction

• THB: Revival of equity inflows on fiscal stimulus support, but lack of external demand pick-up and smaller trade surplus might undermine THB outlook

• PHP: Election uncertainty continues to cloud near-term outlook.

• VND: Volatility reined in by market-based reference; but modest gains still exposed to USD funding and inflation pick-up risks on hawkish Fed triggers.

• AUD: Surge outpacing ore price bounce reveals near-term vulnerabilities from RBA jawboning, FOMC/China risks; but modest traction further out.

• KRW: Selling pressures could revive as BoK retain easing bias

• MAS hold positions SGD for out-performance early-April. But USD rebound

risks could overwhelm later in Q2. Vulnerabilities in commodity/high-beta FX while INR may under-perform AXJ bounce later if oil firms up.

31 Mar 16 Jun 16 Sep 16 Dec 16 Mar 17 Jun 17

USD/JPY 112 113 110 108 104 103

EUR/USD 1.14 1.10 1.14 1.15 1.16 1.17

USD/CNY 6.46 6.52 6.42 6.36 6.30 6.28

USD/INR 66.3 68.8 66.5 64.5 64.0 63.5

USD/KRW 1138 1180 1150 1140 1120 1100

USD/SGD 1.35 1.40 1.38 1.35 1.33 1.32

USD/IDR 13255 13600 13300 13000 12850 12500

USD/MYR 3.90 4.10 4.05 3.95 3.90 3.87

USD/PHP 46.0 47.0 46.4 45.7 44.8 43.9

USD/THB 35.2 36.0 35.4 34.9 34.7 34.5

USD/VND 22288 22600 22500 22300 22300 22400

AUD/USD 0.77 0.72 0.73 0.75 0.77 0.78

- 2 -

Global FX: The Dollar - Down but not out

Fed reduces rate projections in significant shift

Sources: FOMC, Mizuho Bank Singapore Treasury

Rates gap persist between markets and the Fed

Sources: Reuters, Mizuho Bank Singapore Treasury

EUR rallied with higher EURIBOR future post-meeting

Sources: IMF, Mizuho Bank Singapore Treasury

Abenomics in doubt as 10Y yields turned negative

Sources: CEIC, Mizuho Bank Singapore Treasury

• Given the Fed’s increased concerns on headwinds from softer global growth and financial

market volatility, the March FOMC meeting saw members revising down their rates projections yet again, leading to a broad sell-off in the USD.

• However, we stress that these are non-committal and data dependent. Should the rebound in risk assets endures and we see a sustained rise in US core PCE inflation, the USD could recoup losses as the Fed re-assesses its inflation outlook heading into June.

• Market pricing of short-end rates now look overly dovish relative to Fed projections and rising inflation pressures, and we think risks are perhaps lying to the upside now.

• ECB also announced aggressive easing measures, cutting its deposit rate and main refinancing rate by 10bps and 5bps respectively, accelerating asset purchases to EUR 80bn per month, widening the pool of eligible assets to corporate bonds, and scheduling new 4Y Targeted LTROs tied to lending to Eurozone corporates and households.

• However, EUR/USD ironically bounced higher after Drahi stated that he does not anticipate any need for further rate cuts, catching many by surprise with the market expecting deeper rate cuts.

• The anticipated sharp expansion of the ECB’s balance sheet, after TLTROs are allotted starting June 2016, should cap EUR/USD from extended gains in the near term.

• Meanwhile, BoJ kept policy unchanged in March but Kuroda stated that there is a lot of room to bring negative rates down to -0.5%.

• With BoJ likely to revise growth and inflation forecasts lower in April, and with the JPY staying relatively strong despite negative rates, we think further rate cuts are probable.

• USD/JPY could face some downside pressures as markets doubt BoJ’s ability to stoke further JPY weakness, but we think better risk sentiment should support for now.

0.0

0.5

1.0

1.5

2.0

2.5

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3.5

4.0

4.5

Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 Mar 16

Fed Funds Rate Projections for 2017-FOMC Central Tendency

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2.00

Apr

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Jan

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Market vs FOMC Expectations -Fed Funds Rate (%)

Market-implied Fed Funds Rate FOMC Median FFR Projection

*As of 31 Mar 16

1.00

1.02

1.04

1.06

1.08

1.10

1.12

1.14

1.16

1.18

1.20

-0.5

-0.4

-0.3

-0.2

-0.1

0

0.1

0.2

0.3

Jun 15 Aug 15 Oct 15 Dec 15 Feb 16 Apr 16 Jun 16

3M EURIBOR Future vs EUR/USD

EURIBOR 3M Dec 2016 Future ECB 10 March meeting

EUR/USD (rhs)

100

105

110

115

120

125

130

-0.2

-0.1

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

Mar 14 Jun 14 Sep 14 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 Mar 16

Japan - USD/JPY and JGB 10Y yield

JGB 10Y Yield (%) USD/JPY (rhs)

- 3 -

AXJ: Between January & March

• AXJ 1 whipsawed in Q1 as the risk rollercoaster swung from “risk off” in January to “risk

on” in March. And of the question is whether the outlook for AXJ is “risk-off January” or “risk-on March”, we take the view of “ February”.

• In other words, we expect market to remain volatile both ways as uncertainties linger. And “risk-on/“risk off” swings are liable to be exaggerated by negative interest rates and consequent opportunistic, but “light-footed” hunt for yields .

• For one, the dynamic calibration of FOMC expectations will probably be the most prominent driver of directional AXJ trades via USD and risk appetite triggers.

• In addition, as Lunar New Year distortions fade, China data could be another source of volatility as markets make sense of the dissonance between lingering weakness in production data (dragged by inventory overhang) and investment pick-up.

• The on-going oil production cap efforts remain liable to equivocating members such as Iran and Libya, and thus, oil prices swings are yet another risk to overall sentiments.

• Finally, negative interest rates may impact via banking stocks. Overall, the recent bounce in AXJ looks uncomfortably hollow given lingering risks. Fed rate hike expectations being priced in by mid-2016 could result in another parallel shift up for USD/AXJ.

• China shocks could reveal a larger correction in AUD, KRW and SGD while oil shocks resonate more deeply in the MYR and to some extent IDR; the latter could catch down.

• SGD could jump temporarily in early-April of the MAS holds back on easing; but in any case AXJ are expected to strengthen more durably (but modestly) into late-2016.

1 AXJ: Asia ex-Japan Currencies

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5 China Fears & Oil (Geo-political) Risks & Collide! (Equities % Chg in local currency & USD terms; YTD to 25th Jan 2016 )

LC-terms FX Impact

USD-terms

Sources: Bloomberg, Mizuho Bank

Oil plunged on Saudi-Iran tensions - interpreted as impe ding OPEC cuts. Gold surge (>4%) and JPY (~2%) rise on "risk off". EUR gains checked by ECB stimulus; and BoJ reins in JPY. China concerns driven by lingering CNY devaluation risks and buckling shares precipitating as adverse feedback between outflows and "hard landing". - Equities (local currency terms): Bearish equity i mpact resonates via exports-linkages and commodity exposures. Nikkei hard-hit by external (China!) ris ks despite JPY safe-haven!- FX: Commodity Currencies RUB (-9.8%); ZAR (-6.0%); NZD (-5.6%); AUD (4.5%); & CAD (3.2%) hardest hit, with AUD and NZD off lows on China stimulus hopes.

Risk aversion triggered by China (dismal data, stock slump & CNY devaluation fears) & Oil (Geo-politics) ruled the roost with ensuing global equity market c arnage.

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30 China Fears & Oil Reversal alongside USD Capitualtion ! (Equities % Chg in local currency & USD terms; YTD to 20th/21st Mar 2016 )

LC-terms

FX Impact

USD-terms


Reversal of Oil : Plunge to US$27 lows (late-Jan) has snapped back above US$40. Hopes of some kind of production cap agreement may be required to keep th is pahse of upside intact.China: Reined-in CNY devaluation risks and backstop in tum bling shares lull Asia/EM bears. - Equities (local currency terms): Still a mixed ba g and perhaps not out of the woods given; JPY stren gth dragging Nikkei and soggy China equities holding back some other As ian !- FX: Gold (+18.3%) and Commodity currencies, led by Oil proxies such as BRL (+9.4%), RUB (+7.7%), CAD (+6.4%), MYR (+5.9%) and NOK (+5.7%) leading YTD while AUD is up 4.4% as ore prices stabilize higher too.

1) China risks diminished, maybe dormant; but not "deleted".2) Consequent Commodity bottoming3) Policy Shifts - in terms of Negative Rates and "Dot Plot" Reductio n - impact Equities & FX (USD Capitulation!).4) Event Risks - like "Brexit"

- 4 -

CNY: Post-NPC Lethargy

• There were many aspects of this NPC2 that were worth highlighting; but two novelties stood out in terms of gently, but firmly guiding expectations.

• First, defying the usual practice of a point forecast (speculated to be around 6.5%) for growth, Beijing outlined 6.5-7.0% growth target range. This essentially removes downside tolerance from a policy view-point.

• Second, in another unprecedented policy gesture (of omission) Beijing dropped trade

targets. This tangibly concedes wider global demand deficit issues out of Beijing’s control and highlights willingness to trade-off hollow quantitative exports target for quality.

• The big policy picture squares with firing up fiscal (and monetary) stimulus to boost

growth amid external headwinds without resorting to competitive devaluation.

• Illustrating this, the PBoC has leaned against the (bullish USD) winds with firmer CNY fixing as required. CFETS3 release of CNY NEER values also emphasizes CNY stability.

• Equally, the fixation is not just about underpinning the CNY, but sending a broader

message about containing volatility (against USD); which is why CNY NEER has slipped in the latest bout of USD slippage.

• Upshot: CNY is set to be a lower-beta (less sensitive) currency, appearing to be more

lethargic than other Asian FX which have rebounded more amid USD slump. CNY is set for more durable gain towards 6.30 into early-2017 as growth and sentiments stabilize. For now, watch for bounces to 6.50 though excessive CNY-CNH gap will be reined in.

2 NPC: Annual National People’s Congress where policy-makers provide guidance on the country’s economic plans – amongst broader policy initiatives. 3 China Foreign Exchange Trading System (CFETS) under the PBoC

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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

China: Chronic shortfall of trade targets since 201 1 with first post-Lehman contraction in 2015; and 2016 (Jan-Feb) has only wo rsened! (% Chg YoY)

Exports Growth

Imports Growth

NPC Trade growth Target^

Total Trade Growth ^ Assumes 10-15% (12.5% mid-point) target for 2005-2008 & 10% for 2009-2010.

2016 data only compares Jan-Feb to corresponding period previous year. While the NPC abandoned trade growth target for 2016 , it indiacted desite to improve over 2015.

Source:s CEIC, Mizuho Bank

5.90

6.00

6.10

6.20

6.30

6.40

6.50

6.60

6.70

5.90

6.00

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6.60

6.70

Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16

CNY-CNH gap has been closed; with CNY bouncing on w eaker USD; but not as volatile as most other AXJ.

USD/CNYLower BandUpper BandUSD CNY FixUSD/CNH Sources: Reuters, Mizuho Bank

Stronger CNY

11-Aug: 1.9% reference devaluation followed by a few sessions of self-reinforcing sell-off as fixing shifted to market-based mechanism. CNY sell-off quelled by PBoC intervention/clarification

88

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Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16

Trade-weighted CNY is still consistent with start-2 015 levels -give and take 2% flexibility, and crucially consist ent with 3-4%

per annum compounded appreciation since 2010. (Index end-2014=100)

CNY NEER

4% appreciation p.a.(start-2010)2% appreciation p.a.(start-2010)CNH NEER

Sources: CFETS (PBoC), Bloomberg, Mizuho Bank

One-off devaluation ==> measured "catch-down" for trade-weighted CNY. Consistent with broader stability at reasonable valuation .

- 5 -

INR: Buffered, Not Bullish

• Continued reserve accumulation, defying falling reserves amid capital outflows elsewhere in Asia, means that INR may be one of the best buffered “high-yield” currency. But equally INR is a far cry from being immune to bouts of market volatility .

• In fact, we think INR is susceptible to slippage near-term, potentially testing 70 on

Fed/market risks. Subsequent INR recovery to sub-63 that we expect 12 months out is notably a more restrained rebound compared to other AXJ peers.

• To be sure, it is not as if we have turned emphatically negative on India or the INR. Fact

is, India remains a relative bright spot and that will continue to support INR. • Nonetheless, the strength accruing to INR from weaker oil appears to be exhausted as

oil imports look to bottom and low-hanging fiscal gains from oil are drained.

• And if stabilizing oil prices drift higher in late-2016, improvement in “twin deficits” will be chipped away, all else being equal; though fiscal slippage is mitigated.

• What’s more, INR gains derived from higher real interest rates (due to lower

inflation) will be dampened if inflation is bumped up along with oil amid further easing.

• Finally, further loss of political capital for the BJP and/or stall in reforms risks denting sentiments and taking some wind out of equities and the INR.

• All said, RBI is a stabilizing factor, tempering moves in the INR with grounded inflation-

targetting policy; and the longer-term view positions INR for stronger 2-3year gains.

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RBI has built up FX reserves; much stronger positio n than during "taper tantrum" (USD bn)

FX Reserves (LHS) Gold (LHS)Others (LHS) Imports cover (RHS, ratio)

Sources: CEIC, Mizuho Bank

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0

1

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(2,000)

(1,500)

(1,000)

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500

1,000

1,500

2,000 Equity inflows help accumulate FX reserves; but

inflows remain "light-footed".

Smoothed (4wkma, USDmn, LHS) Equity flows

INR % Chg (Wk/Wk, 4wkma, RHS)

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06 07 08 09 10 11 12 13 14 15 16

If food inflation pick-up comes through coinciding with further fade in fuel dis-inflation, policy space could diss ipate and real

rates could drop (WPI/CPI % y/y)

Headline WPI (LHS)

CPI (LHS)

Fuel (RHS)

Food (RHS)Sources: CEIC, Mizuho Bank

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If C/A Deficit re-widens the "cushion" for BOP from Capital Account may fade, tempering INR gains

(4Qma, % of GDP)

C/A Deficit (% of GDP)

Capital Inflows (% of GDP)

Sources: Bloomberg, CEIC, Mizuho Bank

The Capital Account (Surplus) to C/A (deficit) remains positive for the INR - capital inflows comfortably finance the C/A gap - but boost could fade if C/A deficit re-widens on firmer Oil. Regardsless though, INR is far less vulnerable now compared to 2013 "taper tantrums".

- 6 -

SGD: Don’t Flat-ter Me!

• Two factors have flattered SGD rebound in March. First, USD capitulation

accentuated by high-beta S$NEER components (MYR and AUD) as well as JPY.

• Fact is, though SGD has depreciated against these currencies, barring large S$NEER drop, SGD generally out-performs if “heavy” components, such as MYR, do.

• Second, separate to the trade-weight effects, SGD has also out-performed as bets of

further MAS easing have diminished alongside turbulence in global financial markets.

• Point being, despite downwardly revised Q4 GDP and worse-than-expected NODX and IP suggesting further growth deceleration, the MAS is unlikely to ease for three reasons.

• First, the MAS has already eased policy pre-emptively in October in anticipation of

global headwinds – and demand deterioration since does not warrant fresh easing. Second, while inflation may be lower for longer, it is bottoming nonetheless.

• Finally, an expansionary budget announced on 24th March further diminishes the case

for MAS easing as fiscal policy helps to provide buffer against external headwinds.

• The most viable easing option of an even flatter S$NEER slope is overkill, given that it borders on relinquishing S$NEER appreciation bias; typically a “crisis resort”.

• If we are right about MAS hold, there could be modest S$NEER jump towards topside of

the band; and around current levels could entail USD/SGD softening 1 big-figure.

• But broader USD moves will be more consequential and we expect USD/SGD to turn up above 1.40 by mid-2016 before more durably targeting sub-1.35 in Q1 next year.

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1.46Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16

While China and broader risks are not completely di spelled, market stabilization and expansionary fiscal plan argue for Status Quo. A so fter USD has hoisted S$NEER.

USD/SGD, inverted; +/-2% bands)

SGD (Actual) SGD (Mid Pt)


Stronger SGD

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10Details of S$NEER Shift from Pre-Oct Meeting (13-Oct-15) to

Latest (30-Mar-16) (% Chg in SGD vs. basket currencies)

SGD gains vs. GBP, CNY, EUR, USD and most Asia FX between pre-Oct MAS meeting and now more than offset depreciation vs. JPY, AUD & MYR. Consequently, trade-weighted S$NEER is now 2.5% stronger; comprising; i) S$NEER surging 2% with reference to the policy mid-band (from 1.2% below on 13th Oct to 0.1% above as of 28th Mar); ii) 0.5% "policy drift" in S$NEER mid-point .


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Sharp pullback in external demand, especially plung e in container throughput could avert free-fall; fiscal buffes to help.

(% 3m y/y)

IPIP ex-Biomed

Container ThroughputReal NODX


- 7 -

MYR: Oil boost and Fed relief

Rebound in oil alongside better sentiment lifted MYR


Reduced bill holdings suggest limits for more pare backs


Trade surplus slips as exports contract sharply in Jan


Exports remain lacklustre on weak electronics demand


• The MYR has been bolstered by a sharp rebound in oil prices, with markets judging that the market could become more balanced as US shale output growth appears to be finally reversing.

• A retrenchment in the USD and a broad-based rally in commodity prices have also supported the Ringgit, given its status as a commodity currency due to Malaysia’s large commodity export base.

• However, we see some headwinds for the MYR ahead, and would maintain a cautious outlook still.

• Firstly, the retirement of the highly regarded BNM Governor Zeti in April could elevate investor doubts over the central bank’s independence and commitment to policy continuity, and the the ability of her successor to tackle market stresses.

• Secondly, exports have relapsed into a sharp contraction in January, suggesting that sharp MYR depreciation has not been successfully in stimuluating competitiveness and external demand.

• The apparent dovishness of the Fed, give lower rate projections, might also be reversed on fast improving risk sentiment and an upward trend in US core inflation.

• As such, we think USD/MYR could be supported towards the 4.10 level in the interim as portfolio inflows taper out and still weak fundamentals reassert.

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Apr 13 Oct 13 Apr 14 Oct 14 Apr 15 Oct 15 Apr 16

Oil vs USD/MYR

Tapis Oil Price (lhs, USD) USD/MYR (rhs, inverted)

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Feb 14 May 14 Aug 14 Nov 14 Feb 15 May 15 Aug 15 Nov 15 Feb 16

USD bnMalaysia - Non-resident holdings of Govt debt

Non-resident holdings - Govt Bonds

Non-resident holdings - Short-term Bills

USD/MYR (rhs, inv)

-60

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Jan 14 Apr 14 Jul 14 Oct 14 Jan 15 Apr 15 Jul 15 Oct 15 Jan 16

USD bn% 3m/3m saar

Malaysia - Trade Developments

Trade Bal (rhs, USDbn, 3m saar) Exports 3m/3m saar

Imports 3m/3m saar

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Sep 11 Mar 12 Sep 12 Mar 13 Sep 13 Mar 14 Sep 14 Mar 15 Sep 15

Malaysia - Exports by Products (q/q saar)

Food and Crude Materials Mineral Fuels and Chemicals

Electronics Other Manufactures

Exports q/q saar

- 8 -

IDR: Bolstered by reforms and commodities IDR has outperformed with other commodity FX


IDR remains supported by favourable equity inflows


Non-energy exports appear to have rebounded


Lower inflation affords space for further BI rate cuts


• The IDR reboundest strongly alongside with the MYR and AUD, bolstered by a rebound in commodity prices, a renewed search for yield given a dovish Fed, and better sentiment towards the Indonesian economy.

• Increased expectations of Chinese fiscal stimulus has resulted in a broad lift in commodity prices, which in turn are supporting commodity-linked currencies such as IDR, MYR and AUD.

• Risk sentiment has also improved, and we expect portfolio inflows into Indonesian equities and bonds to have lifted the IDR quite a bit in March.

• The introduction of “big-bang” reform measures in February, including the removal of 35 industrial sectors from the “negative investment list” that restricts foreign ownership, have also been welcomed by foreign investors as a significant policy move.

• Meanwhile, cooling inflation and a stabilization of of capital outflows have also afforded space for BI to cut its policy rate by 25bps to 6.75%, which is supportive for equities.

• Non-oil and gas exports are also starting to pick up, and we think this could be helping in stabilizing the trade deficit and supporting sentiment towards the IDR.

• Still, we remain watchful of commodity prices as commodity demand is facing structural challenges, and can potentially flip sentiment to a more fragile state as well.

• We maintain a relatively bullish USD/IDR view, expecting a rebound towards 13600 in June on expectations of better US data tone and renewed commodity weakness.

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MYR AUD SGD IDR KRW THB PHP VND CNY INR

Asian FX performance vs USD

2016 YTD 2015

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Jan 15 Mar 15 May 15 Jul 15 Sep 15 Nov 15 Jan 16 Mar 16

Indonesia - JKSE vs USD/IDR

Jakarta Stock Exchange Composite USD/IDR (rhs, inverted)

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Indonesia - Non-Oil and Gas Trade

Non-O&G Trade Balance (rhs, USD bn 3m saar)

Non-O&G Exports (3m/3m saar)

Non-O&G Imports (3m/3m saar)

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Indonesia - Inflation (y/y)

CPI y/y Core CPI y/y Inflation Target Band

- 9 -

THB: External demand challenges Expanding trade surplus has supported THB in the past


But rising capital goods imports could whittle C/A


Disinflation entrenches on subdued domestic demand


Real exports continue to contract, albeit at slower pace


• While Thai growth is expected to improve this year on increased fiscal disbursements, we think the sluggish recovery in external demand continues to pose challenges.

• Thailand’s exports are still contracting on both a value and volume basis, suggesting that the external demand malaise has not abated. Imports are also likely to pick up on increased fiscal-related spend, on top of a rebound in oil prices.

• As such, we expect Thailand’s substantial trade surplus to whittle off, which could undermine one of the key supporting pillars of THB strength.

• On the domestic side, the private investment index has rebounded to a near 3Y high, suggesting that fiscal spending is filtering down into the economy.

• Tourist arrivals have also stayed relatively resilent, providing a support of growth in contrast to the drag from manufacturing.

• As such, despite persistent low inflation, we think BoT could opt to keep interest rates unchanged, particularly as financial stability concerns loom large.

• This also suggests that THB weakness could be much more modest relative to other Emerging Asian currencies, unless we see another bout of political tensions flaring up.

• We expect USD/THB to climb towards the 36.0 level by June 2016, as a reduction in the trade surplus and potential uplift in USD sentiment support.

-20

-10

0

10

20

30

40

Jan 12 Jul 12 Jan 13 Jul 13 Jan 14 Jul 14 Jan 15 Jul 15 Jan 16

USD bnThailand - Current Account (12m sum)

Services & Income Balance Trade Balance

Current Account 12m rolling sum

-10

-8

-6

-4

-2

0

2

4

6

8

10

12


%, 6m/6m saar

Thailand - Private Investment andCapital Goods Imports

Private Investment Index (6m/6m saar)

Real Imports of Capital Goods (6m/6m saar)

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0


% Thailand - Headline/Core CPI (y/y)

CPI y/y Core CPI y/y

Core Inflation Target Headline Inflation Target

29.0

30.0

31.0

32.0

33.0

34.0

35.0

36.0

37.0

38.0-10

-8

-6

-4

-2

0

2

4

6

Mar 14 Jun 14 Sep 14 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 Mar 16

%, 6m/6m saarThailand - Real Exports vs THB

Real Exports (6m/6m saar) USD/THB (rhs, inv, month avg)

- 10 -

PHP: Better sentiment buffers election uncertainty Equity inflows on better risk sentiment support


Export contraction slowing as manufacturing improves

Sources: CEIC, Mizuho Bank Singapore Treasury Presidential contest likely to go down to the wire


Offshore sentiment has improved sharply


• USD/PHP has softened in line with other USD/Asia crosses, helped by an improvement in risk appetite that has triggered equity inflows back into the Philippines.

• NDF premiums have eased but remain high relative to Q3 15. This indicates that foreign investors are perhaps rebuilding PHP long positions after a period of pare backs.

• Export headwinds also appear to have softened in intensity, with manufacturing exports showing a slower pace of contraction while the electronics segment continues to grow at a steady pace.

• Investor concerns over the upcoming Presidential elections were also assagued to an

extent with former US ambassador to the Philippines, John Maisto, stating that all the candidates appear to be embracing the same economic agenda of the Aquino administration.

• That said, we expect political uncertainty to linger with the leading Presidential

candidates being neck and neck with one another in polls, and this could continue to weigh on the PHP in the interim.

• Meanwhile, an electronic heist of the Bangladesh central bank that saw funds laundered

into the Philippines have raised questions over regulatory safeguards, which could result in increased barriers for remittances to the Philippines if not properly addressed.

• With our expectations of a USD rebound into Q2 and increased election related

uncertainy, we think USD/PHP could test higher towards the 47.0 level in Q2.

42.00

43.00

44.00

45.00

46.00

47.00

48.00

49.006000

6500

7000

7500

8000

8500

Apr 14 Jul 14 Oct 14 Jan 15 Apr 15 Jul 15 Oct 15 Jan 16 Apr 16

USD/PHP vs PSE Index

PSE Index USD/PHP (rhs, inv)

-20

-10

0

10

20


Philippines - Exports (y/y 3mma)

Agro Mineral

Electronics Non-electronics manufacturing

Others Exports y/y 3mma

0%

5%

10%

15%

20%

25%

30%

Grace Poe Jejomar Binay Mar Roxas Rodrigo Duterte

Philippines - Presidential CandidatePoll Results

Social Weather Station (7 March Survey) Pulse Asia (6 March Survey)

0.00

1.00

2.00

3.00

4.00

5.00

42

43

44

45

46

47

48

49

Apr 14 Oct 14 Apr 15 Oct 15 Apr 16

USD/PHP vs PHP 1Y NDF Implied Rate

USD/PHP PHP 1Y NDF-implied rate (rhs)

Overnight call rate (rhs, %)

- 11 -

VND: Dampening Volatility?

• Similarities between the VND and CNY are hard to miss. Notably, daily market-based4 reference rate resembles PBoC fixing and trade-weighted reference.

• And consequently, the trade-weighted moves have dampened VND volatility; rendering “risk on” March gains of ~1% YTD below the majority of the AXJ peers (save for even more modest CNY gains and mild HKD and INR slip).

• For all purposes VND stability appears to take precedence, with FX reserve accumulation on USD pullback, to better position to buffer against “risk off”.

• With a more “continuous” FX adjustment process the SBV shifting to more stable FX dynamics (in contrast to ever-present one-off devaluation risks before) is sensible.

• Broader VND stabilization is critical on three counts. First, fostering currency stability will incetivize investments to boost industry and enhance banking capital.

• Second, with the SBV expecting inflation to accelerate towards 5% by late-2016 (from 1.7% in March ~1% n Q1), scope for currency weakness and/or volatility is also diminished; especially in the interest of broader macro stability .

• Finally, dampening voilatility will also help anchor VND stability expectations; and in turn this could help alleviate USD funding pressures when Fed rate hike risks re-emerge.

• Nonetheless, if broad-based USD strength resumes, market forces will dent VND. In which case, risks of 1-2% temporary VND depreciation (not irreversible devlaution!), before stabilizing further out as China stabilizes (and CNY bounces alongside with EUR).

4 The SBV has indicated that the “market based” reference rate will be based against eight currencies – USD, EUR, CNY, JPY, TWD, KRW, THB and SGD – which account for 70-80% of Vietnam’s exports/imports.

20,500

21,000

21,500

22,000

22,500

23,000

20,500

21,000

21,500

22,000

22,500

23,000

Jan 13 Jul 13 Jan 14 Jul 14 Jan 15 Jul 15 Jan 16

Incremental adjustments in reference rate mitigate s risk of abrupt 1-2% devaluation, consequently reducing VND "risk premium"; but two-w ay volatility remains

VND (Monthly Avg) SBV Reference Rate

Sources: CEIC, Reuters Mizuho Bank Singapore Treasury Div.

Weaker VND

Three episodes of 1% devluation each in 2015:1) Jan (7th) from 21,246 to 21,458; 2) May (7th) to 21,673; 3) Aug (19) to 21,890

Annual devaluation of 1% each in Jun 2013 and Jun 2014.

12 Aug 2015: USD/VND trading bands doubled to +/-2% from +/-1%19 Aug 2015: USD/VND trading bands widened (again!) to +/-3%. And VND mid-point devlaued 1% to 21,890.

10.3

18.2

10.4

4.9

2.0

1.7

2.4

18.2

68.0

27.7

6.8 9.1 14

.7

4.9 7.

3

4.8

4.1

79.5

0

20

40

60

80

100

Share of Exports and Imports (%) show the "eight countries" cover between 70-80% of Vietnam's trade

Exports Imports

Sources: IMF DOT Data, CEIC, Mizuho Bank

(10)

(8)

(6)

(4)

(2)

0

2

4

6

(10)

(8)

(6)

(4)

(2)

0

2

4

6

06 07 08 09 10 11 12 13 14 15 16

Modest uptick in Net Trade is a relief; but may not negate VND pressures if USD regains ground against EUR, JP Y,

CNY & other Asia FX ($bn; Qtrly)

C/A (LHS)

Net Exports (3m Rolling RHS)

Sources: CEIC, Mizuho Bank.

- 12 -

AUD: Ore-some?

• AUD surge to test 0.77 temporarily deflected sub-0.68 risks. Dovish FOMC set-up USD capitulation, with pick-up in iron/copper ore prices firing up AUD out-performance. But the “ore-some” AUD rally is not likely extend uninterrupted for three reasons.

• First, overly dovish FOMC bets are likely to be tempered dynamically, naturally limiting AUD upside. Especially if bounces in the USD once again drag commodity prices.

• Second, while China risks have not blown up, they have not blown over either. Until China’s investments pick-up more emphatically – we think late this year – ore prices remain vulnerable to inventory overhang and production slack.

• Consequently, bullish bets on AUD may not be “ore-some”, devolving into “high-beta” play, unwinding carry trades if softer ore prices undermine fundamental support.

• Finally, even if China risks remain under wraps, the RBA could become increasingly uncomfortable with excessive AUD upside. While a firm job market mitigates a rate cut response, jawboning the AUD emerges as a significant risk.

• But that said, AUD above 0.75 is merely premature, not unviable. In fact, we expect AUD to regain traction around 0.76-0.80 into early-2017 as China bottoms emphatically, reviving infrastructure-driven demand – and modest price support – for commodities.

• So looking past the AUD air-pockets lurking around (either side of) mid-2016, as the Fed gears up to hike again, we think AUD will begin firming later on China factors augmented by narrowing RBA easing window as dis-inflation from energy fades

• Thus, AUD slip back to 0.68 is not written off in the next 3-6 months, and elections risks are also watched going into the later part of the year.

• But AUD is well-positioned amongst commodity currencies, in particular underpinning AUD/NZD once event risks fade and China stabilizes; but perhaps shy of "ore-some”.

0.60

0.70

0.80

0.90

1.00

1.10

1.20

20

40

60

80

100

120

140

160

180

200

AUD traction is perhaps justifiably founded on bott oming iron ore prices; but AUD gains may be too much too soon well.

Iron Ore AUD


0.6

0.7

0.8

0.9

1.0

1.1

1.2

4000

5000

6000

7000

8000

9000

10000

As is suggested by AUD getting ahead of the support implied by Copper Ore prices; USD capitulation is not a one-way bet!

Copper AUD


61

62

63

64

65

66

673

4

5

6

7

8

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16

Participation is also improving alongside employmen t on the whole. This raises the hurdle to imminent RBA easin g.

Unemployment Rate (3mma LHS)

Participation Rate (3mma inverted scale, RHS)Sources: CEIC, Mizuho Bank . (2)

(1)

0

1

2

3

4

5

6

(2)

(1)

0

1

2

3

4

5

6

05 06 07 08 09 10 11 12 13 14 15 16

Fuel Drive Dis-inflation; essentially this stems fr om global oil price drop; a transient effect that should fade by late-2 016

(% YoY)

H/H Energy Automotive Fuel

Tpt-ex Fuel Total Housing ex-energyOthers Food, Alcohol & Tobacco

CPI Inflation ex-Fuel & Energy


- 13 -

KRW: BoK easing bias to weigh Sluggish growth amidst manufacturing slowdown


Easing bias remains as inflation pressures are modest


Slower Chinese demand has been key drag on exports


BoK holding back rate cuts on macroprudential concerns


• Korean exports continue to be buffeted by a slowdown in Chinese demand, with the impact exacerbated by China’s status as Korea’s largest trading partner.

• This has resulted in a drag on manufacturing production, although better than expected domestic demand has provided a degree of offset.

• With a challenging export outlook and relatively soft inflation pressures, markets are expecting the BoK to retain an easing bias, and this in turn has weighed on the won.

• However, the BoK has resisted further cuts given macroprudential considerations, with households debt levels surpassing its previous peak in 2009 as a share of GDP.

• With the KRW strengthening again in the wake of the Fed’s move to push out rate hikes, we believe BoK could intervene to smooth USD/KRW’s downdraft, especially as near term growth risks continue to loom large.

• Meanwhile, Korea’s unemployment rate in February soared to 4.1%, the highest level in 6 years. With labor market conditions deteriorating, and the risk of capital outflows fading on a dovish Fed, we think BoK might now be more amenable to a rate cut.

• While the USD has been hampered by the Fed’s dovish rate projections, we think USD/KRW could still be supported towards the 1180 level as relative growth differentials between US and Korea should continue to underpin rate divergence.

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Jul 13 Jan 14 Jul 14 Jan 15 Jul 15 Jan 16

Industrial Production 6m/6m saar

Industrial Production 6m/6m saar

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

Jan 12 Jul 12 Jan 13 Jul 13 Jan 14 Jul 14 Jan 15 Jul 15 Jan 16

Korea - Inflation (6m/6m saar)

CPI 6m/6m saar Core CPI 6m/6m saar Inflation Target Band

-20

-15

-10

-5

0

5

10


Korea - Exports by Destinations

US EU China Japan

Asia ex-JP/CN Others Exports y/y 3mma49%

50%

51%

52%

53%

54%

55%

56%

57%

58%

Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 Jan 15 Jan 16

Korea - Household Debt (% of GDP)

- 14 -

FX Positioning & Flows Figure 1. Non-commercial longs in EUR

Sources: CFTC, Bloomberg, Mizuho Bank Singapore Treasury

Figure 2. Non-commercial longs in JPY


Figure 3. Non-commercial longs in AUD


Figure 4. Non-commercial longs in USD


Figure 5. India - Foreign equity inflows

Sources: SEBI, Bloomberg, Mizuho Bank Singapore Treasury

Figure 6. Indonesia - Foreign equity inflows

Sources: JSE, Bloomberg, Mizuho Bank Singapore Treasury

Figure 7. Thailand - Foreign equity inflows

Sources: SET, Bloomberg, Mizuho Bank Singapore Treasury

Figure 8. Korea - Foreign equity inflows

Sources: Korea Exchange, Bloomberg, Mizuho Bank Singapore Treasury

1.00

1.05

1.10

1.15

1.20

1.25

1.30

1.35

1.40

1.45

1.50

-40

-35

-30

-25

-20

-15

-10

-5

0

5

10


Non-commercial longs (USD bn) EUR/USD (rhs)

90

95

100

105

110

115

120

125

130-25

-20

-15

-10

-5

0

5

10


Non-commercial longs (USD bn) USD/JPY (rhs, inverted)

0.68

0.73

0.78

0.83

0.88

0.93

0.98

-12

-10

-8

-6

-4

-2

0

2

4

6

8


Non-commercial longs (USD bn) AUD/USD (rhs)

70

75

80

85

90

95

100

105

-20

-10

0

10

20

30

40

50

60


Non-commercial longs (USD bn) DXY (rhs)

56

58

60

62

64

66

68

70-60

-40

-20

0

20

40

60


Foreign equity inflows (20dma, ann.) USD/INR (rhs, inverted)

9000

10000

11000

12000

13000

14000

15000-20

-15

-10

-5

0

5

10

15

20

25

30


Foreign equity inflows (20dma, ann.) USD/IDR (rhs, inverted)

30.0

31.0

32.0

33.0

34.0

35.0

36.0

37.0

38.0-25

-20

-15

-10

-5

0

5

10


Foreign equity inflows (20dma, ann.) USD/THB (rhs, inverted)

950

1000

1050

1100

1150

1200

1250-120

-90

-60

-30

0

30

60

90

120


US

D b

n

Foreign equity inflows (20dma, ann.) USD/KRW (rhs, inverted)

- 15 -

Currency Forecast Ranges USD Crosses

JPY Crosses

Jun 16 Sep 16 Dec 16 Mar 17 Jun 17

USD/JPY109 - 117

(113)

106 - 114

(110)

103 - 111

(108)

100 - 108

(104)

100 - 108

(103)

EUR/USD1.06 - 1.15

(1.10)

1.08 - 1.17

(1.14)

1.08 - 1.17

(1.15)

1.09 - 1.18

(1.16)

1.11 - 1.20

(1.17)

USD/CNY6.38 - 6.66

(6.52)

6.28 - 6.56

(6.42)

6.22 - 6.50

(6.36)

6.17 - 6.43

(6.30)

6.15 - 6.41

(6.28)

USD/INR66.2 - 71.2

(68.8)

64.2 - 68.8

(66.5)

62.3 - 66.7

(64.5)

61.8 - 66.2

(64.0)

61.3 - 65.7

(63.5)

USD/KRW1120 - 1240

(1,180)

1100 - 1190

(1,150)

1090 - 1180

(1,140)

1070 - 1160

(1,120)

1050 - 1140

(1,100)

USD/SGD1.38 - 1.45

(1.40)

1.37 - 1.43

(1.38)

1.36 - 1.41

(1.35)

1.29 - 1.37

(1.33)

1.28 - 1.36

(1.32)

USD/IDR12900 - 14200

(13,600)

12600 - 13900

(13,300)

12300 - 13600

(13,000)

12200 - 13400

(12,850)

11800 - 13100

(12,500)

USD/MYR3.90 - 4.41

(4.10)

3.86 - 4.24

(4.05)

3.77 - 4.13

(3.95)

3.72 - 4.08

(3.90)

3.69 - 4.05

(3.87)

USD/PHP45.9 - 48.1

(47.0)

45.3 - 47.5

(46.4)

44.7 - 46.7

(45.7)

43.8 - 45.8

(44.8)

42.9 - 44.9

(43.9)

USD/THB34.8 - 36.9

(36.0)

34.5 - 36.3

(35.4)

34.1 - 35.7

(34.9)

33.9 - 35.5

(34.7)

33.7 - 35.3

(34.5)

USD/VND22100 - 22700

(22,600)

22300 - 22600

(22,500)

22100 - 22500

(22,300)

22100 - 22400

(22,300)

22200 - 22500

(22,400)

AUD/USD0.67 - 0.74

(0.72)

0.68 - 0.74

(0.73)

0.68 - 0.75

(0.75)

0.72 - 0.76

(0.77)

0.73 - 0.78

(0.78)

Jun 16 Sep 16 Dec 16 Mar 17 Jun 17

USD/JPY109 - 117

(113)

106 - 114

(110)

103 - 111

(108)

100 - 108

(104)

100 - 108

(103)

EUR/JPY122 - 130

(124)

122 - 130

(125)

120 - 128

(124)

118 - 126

(121)

118 - 126

(121)

JPY/CNY5.39 - 6.01

(5.70)

5.59 - 6.08

(5.84)

5.64 - 6.14

(5.89)

5.80 - 6.31

(6.06)

5.84 - 6.35

(6.10)

JPY/INR0.55 - 0.64

(0.61)

0.58 - 0.63

(0.60)

0.57 - 0.62

(0.60)

0.59 - 0.64

(0.62)

0.59 - 0.64

(0.62)

JPY/KRW9.76 - 11.03

(10.39)

9.87 - 11.04

(10.45)

9.96 - 11.15

(10.56)

10.16 - 11.37

(10.77)

10.08 - 11.28

(10.68)

JPY/SGD1.18 - 1.28

(1.23)

1.21 - 1.29

(1.25)

1.21 - 1.29

(1.25)

1.24 - 1.32

(1.28)

1.24 - 1.32

(1.28)

JPY/IDR113 - 126

(119)

115 - 127

(121)

115 - 126

(120)

118 - 130

(124)

116 - 127

(121)

JPY/MYR3.43 - 3.78

(3.60)

3.53 - 3.84

(3.68)

3.50 - 3.81

(3.66)

3.59 - 3.91

(3.75)

3.60 - 3.92

(3.76)

JPY/PHP0.39 - 0.43

(0.41)

0.41 - 0.44

(0.42)

0.41 - 0.44

(0.42)

0.41 - 0.45

(0.43)

0.41 - 0.44

(0.43)

JPY/THB0.29 - 0.33

(0.31)

0.31 - 0.33

(0.32)

0.31 - 0.34

(0.32)

0.32 - 0.35

(0.33)

0.32 - 0.35

(0.33)

JPY/VND184 - 207

(195)

197 - 212

(205)

199 - 214

(206)

206 - 222

(214)

210 - 225

(217)

AUD/JPY77 - 88

(82)

76 - 85

(80)

77 - 85

(81)

76 - 84

(80)

76 - 85

(80)

Sources： Reuters, Mizuho Bank Singapore Treasury Division forecasts

- 16 -

Growth & Inflation Tables Key Economic Forecasts

Central Bank Policy Outlook

FX Deposit and Forward-Implied Rates

GDP YoY CPI CA (% GDP) GDP YoY CPI C/A (% GDP) GDP YoY CPI C/A (% GDP) GDP YoY CPI C/A (% GDP)

United States 2.4 1.6 -2.3 2.4 0.1 -2.4 2.1 1.0 -2.5 2.4 1.7 -2.7

Eurozone 0.9 0.4 2.4 1.4 0.1 2.8 1.7 1.1 2.7 1.8 1.6 2.5

Japan 0.0 2.7 0.5 0.7 0.8 2.9 1.1 0.7 2.8 0.7 1.7 3.0

ASIA (ex-Japan) 6.0 4.2 1.7 6.2 2.6 2.2 7.0 3.7 1.8 7.2 3.6 2.1

ASEAN-6 4.5 4.4 2.2 5.2 3.2 2.4 5.3 4.1 2.2 5.6 4.6 2.1

China 7.3 2.0 2.1 6.9 1.4 2.8 7.0 2.0 2.8 7.0 2.3 2.6

India 7.1 10.4 -1.3 7.4 5.4 -1.2 7.6 6.3 -1.8 7.9 5.9 -1.9

Korea 3.3 1.3 6.3 2.6 0.7 7.0 3.2 1.5 6.5 3.4 2.4 6.6

Singapore 2.9 1.0 19.1 2.0 -0.5 19.7 2.0 0.0 19.0 3.4 1.5 19.5

Malaysia 6.0 3.2 4.6 5.0 2.1 3.0 4.8 3.3 2.6 5.0 2.8 2.6

Indonesia 5.0 6.4 -3.0 4.8 6.4 -2.1 5.0 4.5 -2.3 5.3 5.5 -2.4

Thailand 0.7 1.9 3.5 2.8 -0.9 8.9 3.3 0.4 5.1 4.0 2.1 4.8

Phil ippines 6.1 4.2 4.4 5.8 1.4 2.9 6.2 2.3 3.3 6.3 3.1 3.5

Vietnam 6.0 1.8 4.9 6.7 0.6 0.2 7.0 2.5 -0.5 7.3 3.5 -1.2

Australia 2.6 2.5 -3.0 2.3 1.5 -4.2 2.6 2.3 -3.5 3.0 2.7 -3.2

Country

2014 2015 2016 2017

Note: Asia (ex Japan) includes China, India, South Korea, Singapore, Hong Kong, Taiwan, Malaysia, Indonesia, Thailand, Philippines, Vietnam

Central Bank Policy OutlookCountry Central Bank 2015 Policy Rate

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

China PBoC 4.35 1-Yr Lending Rate 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00

India RBI 6.75 Repo Rate 6.75 6.50 6.50 6.50 6.50 6.50 6.50 6.75

Korea BoK 1.50 Base rate 1.50 1.50 1.50 1.50 1.50 1.75 1.75 1.75

Singapore MAS^* Reduced slope S$ NEER

Malaysia BNM 3.25 O/N Policy Rate 3.25 3.25 3.25 3.50 3.50 3.50 3.50 3.50

Indonesia BI 7.50 Benchmark Rate 6.75 6.50 6.50 6.50 6.50 6.50 6.50 6.50

Thailand BoT 1.50 1-Day repurchase rate 1.50 1.50 1.50 1.50 1.75 1.75 1.75 1.75

Phil ippines BSP 4.00 Reverse repurchase rate 4.00 4.00 4.00 4.00 4.25 4.25 4.25 4.25

Vietnam SBV 6.50 Refinancing Rate 6.50 6.00 5.50 5.50 5.50 5.50 5.50 5.50

Australia RBA 2.00 O/N Cash Rate 2.00 2.00 2.00 2.25 2.50 2.50 2.50 2.50

2016 2017

Maintain reduced

slope

Maintain reduced

slope

Maintain reduced

slope

"Slightly" Steepen to

restore Slope

Unl ike other regional central banks, the MAS conducts monetary pol icy via FX. Specifically i t adopts a trade-weighted appreciation of the SGD at a "modest and

gradual" (estimated to be 2% per annum) pace as the default pol icy. Now

* In an off-cycle meeting on 28th Jan, the MAS slightly reduced the gradient of the slope and has kept policy at the April meeting.

As of Spot

31 Mar 16 Deposit Fwd-Implied Deposit Fwd-Implied Deposit Fwd-Implied

USD 0.67 0.79 1.24

JPY 112 -0.28 -0.24 -0.29 -0.28 -0.16 -0.16

EUR 1.14 -0.38 -0.39 -0.28 -0.36 -0.04 -0.10

AUD 0.77 2.35 2.35 2.48 2.50 2.79 2.77

CNH 6.47 1.91 1.80 2.46 2.42 3.49 3.46

INR 66.2 8.15 7.68 8.20 7.61 8.40 7.56

KRW 1140 1.59 1.52 1.62 1.71 1.47 1.64

SGD 1.35 0.69 0.77 0.97 1.06 1.28 1.59

IDR 13300 5.95 2.59 6.33 5.81 8.00 7.94

MYR 3.90 3.30 3.60 3.64 3.74 3.83 3.43

PHP 46.0 2.41 2.73 2.41 2.80 2.93 3.18

THB 35.2 1.47 1.52 1.52 1.63 1.78 1.99

*Deposit rate is mid of bid/offer rates **Fwd-implied rates derived from FX forwards and USD deposit rates

3M 1Y1M

Sources：CEIC, Bloomberg, Reuters, International Monetary Fund (IMF), Mizuho Bank Singapore Treasury Division forecasts

- 17 -

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