JGBS: Bear-Steepening Remains At Lunch

Market concerns of political interference in US monetary policy and continued tariff uncertainty have weighed heavily on the US dollar during APAC trading today. The BBDXY USD index is down 0.7% to 1216.10, close to the intraday low, with all G10 currencies stronger against the greenback but especially risk-averse yen, Swiss franc and euro. Risk-sensitive AUD and CAD are underperforming.

• USDJPY is down 1.0% to 140.73, close to the intraday low of 140.62 and below support at 141.00 after breaching 141.62 on Friday, which opens 140.32, 17 September 2024 low.
• EURUSD is just off its high of 1.1529 but is still +1.0% to 1.1512, breaking above resistance at 1.1473 and 1.1495 opening up 1.1555.
• The Swiss franc is 1.0% stronger against the greenback with the pair at 0.8085, its lowest since 2011. EURCHF is little changed at 0.9308.
• GBPUSD is up 0.6% to 1.3377 thus EURGBP 0.4% higher at 0.8606 off the peak of 0.8619.
• AUDUSD has breached resistance at 0.6392 opening 0.6409. The pair is currently up 0.4% to 0.6404, close to the intraday high. However, Aussie is weaker against other major currencies with AUDJPY -0.6% to 90.13 after briefly falling below 90.00 to a low of 89.97. AUDEUR is down 0.6% to 0.5564 after a trough of 0.5555. AUDNZD is -0.4% to 1.0696, still above Friday’s low of 1.0684.
• Equities are mixed with both the S&P & Nasdaq e-minis down 0.9% and TAIEX -1.4% but the CSI 300 is up 0.2% and Straits Times +1.2%. Oil prices are down with WTI -1.8% to $63.53/bbl. Copper is down 0.7% but iron ore is higher at around $99/t.
• Later the Fed’s Goolsbee appears and the US March leading index is released. Japan’s March Tokyo condominium sales print today. Europe remains closed.

The ongoing theme of outflows dominate Asia markets again as any inflows are short lived. 

• South Korea: Recorded outflows of -$88m as of 18th, bringing the 5-day total to -$1,001m. 2025 to date flows are -$12,479, m. The 5-day average is -$200m, the 20-day average is -$431m and the 100-day average of -$156m.
• Taiwan: Had outflows of -$552m as of 18th, with total outflows of -$2,292m over the past 5 days. YTD flows are negative at -$20,009. The 5-day average is -$458m, the 20-day average of -$240m and the 100-day average of -$233m.
• India: Had inflows of +$470m as of the 17th, with total outflows of -$72m over the past 5 days.  YTD flows are negative -$15,486m.  The 5-day average is -$14m, the 20-day average of +$17m and the 100-day average of -$142m.
• Indonesia: Had outflows of -$487m as of 17th, with total outflows of -$1,273m over the prior five days.  YTD flows are negative -$3,440m.  The 5-day average is -$255m, the 20-day average -$100m and the 100-day average -$47m
• Thailand: Recorded outflows of -$40m as of the 18th, outflows totaling -$33m over the past 5 days. YTD flows are negative at -$1,422m. The 5-day average is -$7m, the 20-day average of -$25m the 100-day average of -$19m.
• Malaysia: Recorded inflows of +$9m as of the 18th, totaling -$75m over the past 5 days. YTD flows are negative at -$2,853m. The 5-day average is -$15m, the 20-day average of -$50m the 100-day average of -$40m.
• Philippines: Saw inflows of +$0m as of 17th, with net inflows of +$5m over the past 5 days. YTD flows are negative at -$287m. The 5-day average is +$1m, the 20-day average of -$4m the 100-day average of -$5m.

Authorities should consider subsidising logistics costs for industries with export dependence exceeding 30%, such as tax deductions for overseas warehouse construction used for cross-border e-commerce, said Zhu Keli, founding dean at the National Research Institute of New Economy. The State Council executive meeting last Friday called for customised targeted measures to stabilise employment and foreign trade in different industries and enterprises.