EM FI/FX Strategy: Asia: Three things to watch in the coming week

Research evidence excerpt

EM FI/FX Strategy: Asia: Three things to watch in the coming week

Global Research

27 July 2026ab

EM FI/FX Strategy Emerging Markets

Asia EmergingAsia: Three things to watch in the coming week

Teck Quan Koh

Strategist

MAS Monetary Policy Meeting (27-Jul) teck-quan.koh@ubs.com

+65-6495 4416

MAS July MPS is a close call. UBS and the consensus lean in favour of a policy hold (with

slope maintained at 1%, and other policy parameters unchanged). Recent surge in Rohit Arora

Strategistenergy prices, however, points to a marginal risk of slope tightening (by 50bps) amidst

rohit-b.arora@ubs.com

positive output gap and MAS’s expectations of firming core CPI in months ahead. That +65-6495 5232

said, the market impact of even a hawkish policy move on S$NEER is likely to be limited.

This is because S$NEER is already close to the top decile on our estimates, leaving little Grace Lim

Economist

room for upside within the existing framework. With risk of any re-centring FX moves

grace-k.lim@ubs.com

being only a very low probability event, we think SGD’s role as a funder could sustain in +65-6495 5965

the near term. Elevated probability of a Fed hike this week also means that the SORA

could reset higher than its YTD average.

Taiwan dividends and equity rebalancing flow

Taiwan's dividend payments remain a key focus this week. Estimated dividend related

outflows this week stands at $4.5bn. Even though the dividend season is nearing the

tail-end, the TWD continues to face headwind arising from equity rebalancing flows.

Equity outflows have averaged around $6bn per week over the past five weeks, and is

arguably a dominant driver of recent TWD weakness, clouding the near-term outlook

and leaving the currency largely at the mercy of regional equity market developments,