Asian currencies were mixed and stocks slid on Monday, as markets looked to US inflation data later this week, while the Thai baht fell ahead of a central bank meeting where it is likely refrain from changing key interest rates.

A Reuters poll of economists found that the Bank of Thailand (BoT) is expected to leave rates unchanged when they meet on Wednesday, despite red-hot inflation that has accelerated at a faster-than-expected pace in May.

The poll also showed that the central bank will leave interest rates unchanged at record lows for the rest of the year to support economic recovery despite the consumer price index rising past the BoT’s range of 1% to 3%.

The Thai baht fell 0.1% after the tourism-reliant economy’s core inflation rose 2.28% for May, slightly higher than the 2.2% projected in a Reuters poll. Headline inflation of 7.1% for the same period, however, far exceeded the forecast of 5.78%.

The central bank expects the baht to remain volatile and its depreciation could result in rising import prices and inflation, thereby signalling a hawkish BoT shift, said Tim Leelahaphan, an economist at Standard Chartered Bank (Thai).

Meanwhile, stocks in the region fell.

Indonesia’s rupiah climbs on palm oil export permits; Asia FX upbeat

The Indonesian benchmark slipped up to 1.8% to lead losses and mark its worst session in nearly three weeks, while the Thai index dropped 0.6%. Equities in the Philippines and India fell 0.5% each.

The rupiah, which rose last week after the country lifted its ban on palm oil shipments, fell 0.2%.

Indonesia, the world’s biggest palm oil producer, has issued around 302,000 tonnes of palm oil export permits since the country restarted exports after halting it for three weeks in efforts to control soaring prices at home.

In China, services activity contracted for a third straight month in May, pointing to a slow recovery ahead. However, investors brushed it aside for potential of growth as COVID-19 lockdowns eased in Shanghai and other cities.

The Shanghai Composite Index advanced 1.1%.

“We expect faster growth in the services sector in June as lockdowns have gradually eased.

However, we remain concerned that there may be further lockdowns ahead,“ analysts at ING said in a note.

Global markets turned their focus on the US consumer price report due later this week. Forecasts are in for a steep 0.7% rise in May, though the annual pace is seen holding at 8.3% while core inflation is seen slowing a little to 5.9%.

Highlights:

** Indonesian 10-year benchmark yields fall 26 basis points to 6.970%

** Singapore’s 10-year benchmark yield fall marginally to 2.827%

** Thai policy rate should not be high during recovery - FinMin