Most emerging Asian currencies eased on Monday after strong US payrolls data released last week cemented the case for another rate hike by the Federal Reserve and dampened risk sentiment.

The Thai baht weakened 0.7% and Malaysia’s ringgit slipped 0.2%, while the Indonesian rupiah and the Philippine peso were largely unchanged.

The United States, the world’s largest economy, increased jobs at a brisk clip in March, data showed on Friday, signalling labour market resilience that is expected to keep the Fed on track to raise interest rates one more time next month.

“The string of data thus far suggests that the US is slowing and an environment global growth convergence should weaken the USD even without a rate cut this year,” Maybank analysts said in a note.

Markets participants are now waiting for the US inflation print due on Wednesday that is expected to shape the path the Fed will take in its battle against rising prices.

Mounting recession worries and the tumult in the banking system sparked by the sudden collapse of Silicon Valley Bank in March have raised investor hopes that the Fed will cut rates in the second half of the year to ward off an economic downturn.

Asian currencies, stocks pressured by fear of global downturn

Markets are currently pricing in a 70% chance of a 25 basis-point Fed rate hike in May, while also pricing in cuts before the year-end.

“Market narrative continues to shift quickly, without any clear conviction. From trading Fed’s end-in-sight to recession worries, potentially the focus could shift back to inflation theme this week,” said Christopher Wong, a currency strategist at OCBC.

Among stock markets, South Korea and Thailand led the gains. Philippine and Taiwan stocks rose more than 0.2% each.

Meanwhile, Malaysian equities were largely unchanged. The country’s palm oil inventories at the end of March fell to a nine-month low.

The Singapore dollar was up 0.1%.

The city-state’s central bank will hold its monetary policy meeting on Friday, where it is expected to tighten policy for the sixth consecutive time amid supply-chain disruptions globally.

Elsewhere in the region, India will report its consumer inflation data for March on Tuesday.

A Reuters poll of economists showed the inflation likely eased thanks to softer food price rises, dipping below the Reserve Bank of India’s upper tolerance limit for the first time this year.

Highlights

** Indonesian 10-year benchmark yields up 2.5 basis points at 6.704%

** Saudi maintains crude supply to Asian refiners despite OPEC+ cuts

** China’s first batch of shares under new IPO system surge in debut