Stocks in Thailand lead peers, set for best day since 2020

      Peso among best-performing currencies so far this year

      China Jan-Feb retail sales swing back to growth

    By Navya Mittal
       March 15 (Reuters) - Southeast Asian currencies and
stocks rose on Wednesday, with the Philippine peso leading
gains, after largely in-line U.S. inflation data reinforced
hopes of less aggressive rate hikes, while China retail sales
swung back to growth.
    The Philippine peso and the Malaysian ringgit
firmed 0.3% each, with the latter on track for its fifth
straight day of gains, while the Indonesian rupiah was
trading marginally higher. 
    U.S. consumer price inflation cooled slightly in February,
largely in line with market expectations. However, sticky rent
prices meant inflation remained elevated, posing a dilemma for
the Federal Reserve to either push ahead with rate hikes or
announce a pause. 
    Interest rate futures pricing implied an 80% chance
of a 25-basis point (bps) Fed rate hike, a lot more dovish than
a week ago when markets priced a similar chance of a 50-bps
    "Fed Chair Jerome Powell faces an ever more challenging task
at hand, as he now has to balance dealing with inflation that
still runs too hot and risks related to financial stability,"
analyst at Maybank said in a note. 
    The Philippine peso, which trumped the rupiah to be the
best-performing currency among its peers so far this year, was
supported by the outlook on rates.
    The country's central bank in February said it could raise
interest rates by a quarter of a percentage point one more time
this year. 
    "The Bangko Sentral ng Pilipinas (BSP) will probably be the
last central bank to hike as Philippine inflation hit more than
8% in January" said Nicholas Mapa, Senior Economist, Philippines
at ING. 
    "Several other central banks in the region have managed to
pause and with the Fed likely taking on a less aggressive
stance, the peso will be the likely beneficiary of widening
interest rate differentials," he added.     
    Stocks in the region traded higher on the back of tapering
rate hikes expectations and economic data showing signs of
improvement in China, the region's top trading partner.
    Shares in Thailand soared as much as 2.7%, set to
post their sharpest gains in over two years, while benchmark
indexes in Manila, Seoul, and Singapore
gained over 1% each.
    Equities in China advanced 0.5% as the country's
retail sales swung back to growth and factory activity expanded
for the first two months of this year. It also forecast
achieving its annual inflation target of 3% despite some
   Meanwhile, benchmark bond yields in Indonesia
fell by 3 bps to 6.761%.
    The country's finance minister said bond issuance would be
front-loaded this year, predicting that global interest rates
would continue to rise and stay high in the second half of 2023.
    "We see front-loading strategy as positive for the budget,
while it will put pressure on yield in the near term," said
Fakhrul Fulvian, economist at Trimegah Securities.

    ** China says employment basically stable - stats bureau
    ** Older workers pull South Korea jobless rate down to
record low
    ** Indonesia Feb trade surplus at $5.48 bln, beats forecast 
  Asia stock indexes and currencies                       
 at 0551 GMT                                        
                      DAILY %  YTD %     X   DAILY   YTD %
 Japan                  -0.27  -2.59  <.N2  -0.27    5.58
 China     <CNY=CFXS    -0.07  +0.23  <.SS    0.49    5.57
           >                          EC>           
 India                  +0.02  +0.30  <.NS    0.34   -5.54
 Indonesi               +0.07  +1.27  <.JK    0.01   -3.04
 a                                    SE>           
 Malaysia               +0.25  -1.59  <.KL    0.78   -6.07
 Philippi               +0.28  +1.43  <.PS    1.01   -1.65
 nes                                  I>            
 S.Korea   <KRW=KFTC    +0.68  -2.90  <.KS    1.22    6.32
           >                          11>           
 Singapor               +0.20  -0.18  <.ST    1.14   -2.65
 e                                    I>            
 Taiwan                 +0.11  +0.40  <.TW    0.27    8.94
 Thailand               +0.14  +0.26  <.SE    2.49   -6.40

 (Reporting by Navya Mittal in Bengaluru; Editing by Simon
Cameron-Moore and Janane Venkatraman)

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