Oil Shock Tests ASEAN Central Banks

Market Snapshot

Asset	Level	Change
JCI	7,389.40	-0.69%
SET	1,407.34	+0.11%
KLCI	1,708.78	+0.42%
PSEi	6,158.33	+0.52%
STI	4,863.81	+0.07%
USD/IDR	16,862.00	-0.14%
USD/THB	31.93	+0.60%
USD/MYR	3.91	-1.20%
USD/PHP	59.23	+0.15%
USD/SGD	1.28	+0.06%
Brent Crude	93.61	+6.62%
Gold	5,159.10	-1.35%
Bitcoin	70,352.29	+0.61%
Indonesia 10Y Govt Yield	-	-
Thailand 10Y Govt Yield	-	-

Prior Economic Events

Data	Prior	Cons	Actual
No events available

Today's Economic Events

Data	Prior	Cons	Time
Headline Unemployment Rate	4.40	-	21:00
Central Bank Interest Rate Decision	4.75	-	03:30

Middle East conflict drives oil prices above $93, fueling inflation risks and straining ASEAN economies, with Philippines signaling potential rate hikes.
Fitch downgrades Indonesia's credit outlook to negative amid weak bond auctions and upcoming BI rate decision.
Thailand surprises with rate cut in split vote, while Malaysia holds steady but warns of war risks; mixed equity and currency moves across region.

Yesterday's Recap

ASEAN equities displayed mixed results amid surging oil prices and global volatility. Indonesia's JCI fell 0.69% to 7,389.40, pressured by inflation fears despite slight rupiah appreciation, with USD/IDR down 0.14% to 16,862.00. Thailand's SET rose 0.11% to 1,407.34, buoyed by the recent Bank of Thailand rate cut, though USD/THB increased 0.60% to 31.93.

Malaysia's KLCI gained 0.42% to 1,708.78, supported by palm oil sector strength as Brent crude jumped 6.62% to 93.61. The Philippines' PSEi advanced 0.52% to 6,158.33, helped by remittance flows offsetting oil-related peso weakness, with USD/PHP up 0.15% to 59.23. Singapore's STI edged up 0.07% to 4,863.81, maintaining stability with USD/SGD rising 0.06% to 1.28.

Other assets showed divergence: gold declined 1.35% to 5,159.10, while Bitcoin gained 0.61% to 70,352.29. No major economic data was released yesterday, but markets responded to ongoing news including Fitch's negative outlook on Indonesia and Malaysia's rate hold amid Middle East tensions.

The Day Ahead

No events are scheduled for today, but attention focuses on upcoming releases. The Philippines' headline unemployment rate is due tomorrow at 21:00 ET, with the previous reading at 4.4%, offering clues on labor market health amid rising oil costs. Indonesia's central bank interest rate decision follows on March 17 at 03:30 ET, potentially holding at 4.75% to counter inflation and rupiah pressures.

Markets will watch global oil developments for impacts on ASEAN trade and inflation, with Singapore possibly reassessing GDP forecasts if the Iran conflict persists. Broader vigilance includes potential supply chain disruptions affecting regional commodities and currencies.

Other Economic Notes

ASEAN economies face heightened vulnerability from the Middle East conflict, with oil importers like the Philippines and Thailand grappling with inflation and currency depreciation, while exporters such as Indonesia and Malaysia see mixed benefits from higher Brent prices. Remittances support the Philippine peso, but sustained oil surges could prompt tighter policy. Thailand's tourism recovery aids growth, yet tariff uncertainties add risks.

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Page 1

Other Economic Notes (continued)

Malaysia's robust Q4 expansion, likely the fastest in over a year, builds rate hike expectations despite current holds. Singapore's stock market hit new highs, driven by a strong SGD and shifts from USD assets. Vietnam benefits from FDI in manufacturing amid global supply chain realignments, though fertilizer disruptions via the Strait of Hormuz may pressure agriculture.

Overall, diverging paths emerge, with commodity ties amplifying external shocks.

Global Macro News

The escalating Middle East conflict has propelled Brent crude to 93.61 with a 6.62% gain, raising fears of $100 oil and inflation pressures on cash-strapped Asian governments, as per Fitch warnings. Petrol price surges prompt actions like school closures and fuel limits across Asia. Fitch cut Indonesia's credit rating outlook to negative, citing uncertainty and reduced buffers.

Central banks globally face renewed inflation tests, shifting from growth support. Indonesia's bond auctions showed weak demand, linked to holidays and market jitters. Thailand's unexpected rate cut aims to aid recovery amid tariff risks.

Malaysia held rates but highlighted war-intensified downsides, with investors eyeing hikes amid strong growth. The Philippines' BSP may raise rates if oil hikes persist, as peso faces mounting pressures from conflict risks. Singapore monitors the Iran situation closely, prepared to adjust GDP forecasts on energy price rises.

Additional notes include Meta's crackdown on Southeast Asian scam networks and Malaysia's stablecoin sandbox launch. Gold fell 1.35% to 5,159.10 amid USD strength, while Bitcoin rose 0.61% to 70,352.29. The Iran war raises questions for Middle East AI investments by hyperscalers.

ASEAN Central Banks Watch

Bank Indonesia (BI) contends with Fitch's negative outlook and weak bond auctions, with its March 17 decision likely holding at 4.75% to curb oil-driven inflation and support the rupiah through interventions. The Bank of Thailand (BoT) surprised with a rate cut in a 4-2 vote to shore up recovery amid tariff uncertainties and baht volatility, bucking regional trends. Bank Negara Malaysia (BNM) maintained rates, warning of heightened Middle East risks, while markets build expectations for hikes over the next 12 months given rapid growth.

The Bangko Sentral ng Pilipinas (BSP) indicated possible rate hikes if oil prices keep rising, prioritizing inflation control amid peso vulnerability. The Monetary Authority of Singapore (MAS) tracks the Iran conflict via its exchange rate policy, ready to revise GDP outlooks if energy costs escalate. (cont...)

Continuation

ASEAN Central Banks Watch (continued)

Vietnam's State Bank (SBV) focuses on reserve management and capital inflows to bolster manufacturing, showing policy alignment with growth amid global shifts, though no recent moves highlight contrasts with commodity-sensitive peers. Central banks exhibit splits, with Thailand easing as others tilt hawkish on inflation and FX dynamics.

ASEAN Macro Daily(Beta Mode)