ASIA STOCKS: Asian Equities Mixed, Market Turns Focus To Earnings & US PPI
Nov-14 02:52
Asian equities markets are mixed today, the moves have been driven by expectations that the Fed may lower interest rates in December after US inflation data aligned with forecasts. This optimism particularly benefited exporters in Japan, pushing the Topix up as a weaker yen bolstered export-related stocks like Toyota, the Kospi is on track to end its four-day losing streak, led by tech and battery makers.
- China & Hong Kong equities are both trading lower today, with the HSI hovered near a seven-week low as investors awaited key earnings results from major tech firms like JD.com and Alibaba. Market sentiment in Hong Kong remained subdued, affected by weaker-than-expected stimulus measures from China. Additionally, this session marked the first time Hong Kong’s markets stayed open during severe weather, with a No. 8 typhoon signal issued due to tropical storm Toraji. The CSI 300 is 0.25% lower with property stocks struggling, while Telecom stocks have given back some of yesterday's gains.
- Japanese equities are mixed, with exporters benefitting from a weaker yen. The TOPIX is 0.30% higher, while the Nikkei is flat. Toyko electron is given back Wednesday's gains and was last 2.90% lower.
- South Korean equities are on track to end a four-day decline, as investors sought blue-chip bargains with Samsung trading 1.60% higher. Foreign investors have continued to sell local stocks with a focus on tech stocks. The KOSPI is 0.30% higher, while the KOSDAQ is 0.65%. Taiwan's TAIEX is 0.50% lower, with TSMC down -0.50% while Hon Hai is -1% lower.
- Australia’s share market also climbed with the ASX200 0.20% highe, with financials and tech stocks leading gains, spurred by strong earnings from companies like Xero. Energy stocks rose alongside oil prices, while miners saw mixed performance due to weak iron ore prices.
- Across Asia EM equities Indonesia, Philippines & Malaysian equities are all trading lower.
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ASIA STOCKS: Investors Continue to Sell Asian Equities, Although Flows Light
Oct-15 02:22
The rotation out of EM Asian equities continues, albeit it small sizes.
- South Korea: Saw inflows of +$29m yesterday, but over the past 5 sessions netted outflows of -$583m, while YTD flows remain positive at +$9.82b. The 5-day average is -$117m, which is higher than the 20-day average of -$246m but below the 100-day average of -$53m.
- Taiwan: Recorded outflows of -$113m yesterday, with the past 5 sessions bringing in +$344m, while YTD flows are still negative at -$12.53b. The 5-day average is +$69m, below the 20-day average of +$165m, and above the 100-day average of -$169m.
- India: Experienced outflows of -$480m Friday, with the past 5 sessions totaling -$3.09b, while YTD flows stand at +$4.33b. The 5-day average is -$618m, higher than the 20-day average of -$131m but above the 100-day average of +$73m.
- Indonesia: Saw outflows of -$19m yesterday, bringing the past 5 sessions to -$259m, with YTD flows at +$2.83b. The 5-day average is -$52m, lower than the 20-day average of -$27m but slightly above the 100-day average of +$28m.
- Thailand: Recorded outflows of -$35m Friday, market was closed on Monday. The past 5 sessions netting -$190m, while YTD flows are -$3.10b. The 5-day average is -$38m, which is below both the 20-day average of -$20m and the 100-day average of -$13m.
- Malaysia: Posted outflows of -$15m yesterday, with the past 5 sessions netting -$26m, while YTD flows are +$544m. The 5-day average is -$5m, better than the 20-day average of -$19m and in line with the 100-day average of +$5m.
- Philippines: Saw outflows of -$9m yesterday, bringing the past 5 sessions to -$10m, while YTD flows remain positive at +$69m. The 5-day average is -$2m, lower than the 20-day average of +$16m, but above the 100-day average of +$4m.
Table 1: EM Asia Equity Flows
BONDS: AU-NZ 10Y Yield Differential Holding Near Year-Highs
Oct-15 02:09
The AU-NZ 10-year yield differential is unchanged today, now standing at -18.bps compared to the recent high of -5bps in late July, which marked the highest level since August 2022.
- The recent move lower in the 10-year yield differential coincided with a move lower in the AU-NZ 3-month swap rate 1-year forward (1Y3M) spread.
- The NZ 1y3m rate has risen around 40bps since the end of September in line with the recent scaling back of easing expectations in the US.
- A simple regression of the AU-NZ 10-year yield differential against the AU-NZ 1Y3M spread over the past 12 months suggests that the differential is close to its regression fair value (i.e., -18bps versus -20bps fair value).
- The 1Y3M differential is a proxy for the expected relative policy path over the next 12 months.
Figure 1: AU-NZ: 10-Year Yield Differential Vs. 1Y3M Swap Differential
The AU-NZ 10-year yield differential is unchanged today, now standing at -18.bps compared to the recent high of -5bps in late July, which marked the highest level since August 2022.
- The recent move lower in the 10-year yield differential coincided with a move lower in the AU-NZ 3-month swap rate 1-year forward (1Y3M) spread.
- The NZ 1y3m rate has risen around 40bps since the end of September in line with the recent scaling back of easing expectations in the US.
- A simple regression of the AU-NZ 10-year yield differential against the AU-NZ 1Y3M spread over the past 12 months suggests that the differential is close to its regression fair value (i.e., -18bps versus -20bps fair value).
- The 1Y3M differential is a proxy for the expected relative policy path over the next 12 months.
Figure 1: AU-NZ: 10-Year Yield Differential Vs. 1Y3M Swap Differential
EQUITIES: Japanese Equities Continue Move Higher
Oct-15 02:02
- Nikkei pushing higher, as Tokyo Electron breaks out of recent ranges, last up 4.60%
- USD/JPY slightly lower at 149.50, which looks to be capping exporters prices.
