ASIA STOCKS: Asian Equities See Inflows As Global Tech Stocks Rally
Jan-23 00:36
India continues to see heavy outflows, with over $6b leaving the market this year alone.
- South Korea: Saw inflows of +$257m yesterday, contributing to a 5-day total of +$125m. YTD flows are positive at +$41m. The 5-day average is +$25m, better than the 20-day average of +$3m, but worse than the 100-day average of -$153m.
- Taiwan: Recorded inflows of +$537m yesterday, leading to a 5-day total of +$2.26b. YTD flows are negative at -$1.26b. The 5-day average is +$453m, significantly better than the 20-day average of -$71m and the 100-day average of -$111m.
- India: Registered outflows of -$731m Tuesday, resulting in a 5-day total of -$2.59b. YTD flows are deeply negative at -$6.11b. The 5-day average is -$518m, worse than the 20-day average of -$364m and the 100-day average of -$94m.
- Indonesia: Saw inflows of +$18m yesterday, bringing the 5-day total to +$19m. YTD flows are negative at -$189m. The 5-day average is +$4m, better than the 20-day average of -$9m and slightly better than the 100-day average of +$1m.
- Thailand: Recorded inflows of +$50m yesterday, contributing to a 5-day total of -$4m. YTD flows are negative at -$154m. The 5-day average is -$1m, slightly better than the 20-day and 100-day averages, both at -$9m.
- Malaysia: Registered outflows of -$16m yesterday, leading to a 5-day total of -$147m. YTD flows are negative at -$481m. The 5-day average is -$29m, worse than the 20-day average of -$24m and the 100-day average of -$20m.
- Philippines: Saw outflows of -$7m yesterday, bringing the 5-day total to -$32m. YTD flows are negative at -$93m. The 5-day average is -$6m, in line with the 20-day average and slightly worse than the 100-day average of -$2m.
Table 1: EM Asia Equity Flows
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US TSYS: Cash Bonds Slightly Richer After Yesterday’s Sell-Off
Dec-24 00:26
TYH5 is 108-18+, +0-03+ from NY closing levels.
- Cash bonds are flat to 1bp richer in today’s Asia-Pac session after yesterday’s heavy session.
- Benchmark yields finished 3-7bps higher, with the 7-year leading.
- Meanwhile, projected US rate cuts into early 2025 were steady to slightly lower vs. yesterday’s open (*) as follows: Jan'25 steady at -2.1bp, Mar'25 -11.7bp (-13.7bp), May'25 -16.0bp (-18.8bp), Jun'25 -23.4bp (-25.3bp).
- There was little reaction to a flurry of mixed data: November posted improved home sales figures compared with a soft October but revised New home sales came in roughly as expected at 664k on a seasonally adjusted annualized rate, up from 627k prior (upwardly revised from 610k). This follows data showing a 4.8% M/M increase in existing home sales in November to the highest level since March at 4.15M.
- The headline durable goods orders figure of -1.1% M/M, the "miss" vs. -0.3% expected, was offset by an upward revision to the prior growth reading to 0.8% from 0.3%. Transportation equipment - a typically volatile category - led the decline, falling -2.9% M/M, with nondefense aircraft/parts down 7.0%.
- Yesterday’s Tsy $69B 2Y note auction (91282CME8) came out on the screws: 4.335% high yield vs. 4.335% WI; 2.73x bid-to-cover vs. 2.77x prior. Today sees Tsy $28B 2Y FRN & $70B 5Y Note auctions.
STIR: BOJ Dated OIS Slightly Softer Than Pre-Dec MPM
Dec-24 00:02
BOJ-dated OIS pricing is marginally softer than pre-Dec MPM levels.
- Nevertheless, pricing remains 3-13bps firmer beyond January versus pre-October MPM levels, with the September/October 2025 contracts showing the strongest gains.
- Market expectations currently indicate: a 37% probability of a 25bp hike in January; a cumulative 95% chance by May; and a full 25bp increase not fully priced in until June 2025.
- A full 25bp hike had been priced by May before the December MPM.
Figure 1: BOJ-Dated OIS – Today Vs. Pre-BOJ MPM (October)
Source: MNI – Market News / Bloomberg
JGB TECHS: (H5) Shallow Correction
Dec-23 23:45
- RES 3: 149.55 - High Mar 22 (cont)
- RES 2: 147.74 - High Jan 15 and bull trigger (cont)
- RES 1: 144.48/146.53 - High Nov 11 / High Aug 6
- PRICE: 142.24 @ 16:29 GMT Dec 23
- SUP 1: 141.88 - 1.618 proj of the Aug 6 - Sep 3 - 9 price swing
- SUP 2: 141.56 - 1.764 proj of the Aug 6 - Sep 3 - 9 price swing
- SUP 3: 141.05 - 2.000 proj of the Aug 6 - Sep 3 - 9 price swing
Markets slipped on the hawkish Fed, touching 141.87 on the way lower before rebounding back to flat on the dovish BoJ decision. Medium-term trend signals on the continuation chart continue to point south. A resumption of the trend would pave the way for a move towards 141.88 and 141.56, Fibonacci projection points on the continuation chart. A stronger recovery would open 144.48, the Nov 11 high. Further out, key resistance is at 146.53, the Aug 6 high (cont).
