MALAYSIA: Country Wrap:   BNM to remain on Hold. 

• Asian markets rebounded today, lifted by easing US inflation and renewed Fed rate rate-cut bets. Japan's Nikkei 225 rose 1.10%, while the Topix climbed 0.9%, driven by Toyota Motor and bank stocks ahead of BOJ minutes and Governor Ueda's speech. Hong Kong’s Hang Seng gained 0.7%, supported by record mainland Chinese buying of HK$778b ($100b) in 2024, as a weaker yuan and Beijing’s stimulus fueled demand.
• South Korea's Kospi jumped 1.470% and Taiwan's Taiex advanced 2.50%, with tech stocks like TSMC and Hon Hai leading gains. Australia’s ASX 200 jumped 1.4%, tracking the rally in U.S. equities. Mainland China saw modest gains as Premier Li Qiang called for innovation in semiconductors, while investor sentiment remained cautious due to global trade concerns. The broader MSCI Asia Pacific Index snapped a six-day losing streak, offering some respite after recent volatility sparked by robust U.S. data and reduced Fed rate-cut expectations for 2025.
• There were heavy outflows on Friday in the tech heavy markets of South Korea and Taiwan, foreign investors have returned somewhat to Korea today, although inflows are well below what is needed to cover recent outflows, with just $100m inflows so far today, with majority of the flows heading into financial stocks.

Aussie bonds have outperformed in the APAC region today, curves have bull-flattened, with yields trading 5-10bps lower, with the 10yr outperforming. 

• ACGB yields have rallied today, outperforming the US Tsys move, with the passing of the US stopgap bill supporting markets. The 2yr is is -5.7bps at 3.919%, while the 10yr is trading -9.2bps at 4.40%. The 2s10s dropped 3.5bps at now trades 46.50bps, it briefly touched 50bps on Friday.
• ACGB futures are currently YM +6.0, VTA +4.5, XM +9.5
• Swap curves are trading -2bps across the curve
• Bill strip is +2 to +6,
• RBA-dated OIS pricing has firmed 1-3bps across the the next few meetings today, with 17bps of cuts priced for Feb, or a 69% chance of a cut, the first full cut is now priced in for the April meeting. Further out the curves there is 72.5bps of cumulative cuts now priced by December 2025, down from 80bps to start the week.
• Tomorrow we have the Minutes of the RBA December rate meeting, which will close out the year for any data releases.

NZGBs have closed richer today, outperforming the move made on Friday in US tsys. In has been a very slow session

• New Zealand’s Treasury Department acknowledges a deeper-than-expected economic downturn but remains optimistic about a recovery beginning in early 2025, as highlighted in its Fortnightly Economic Update. Indicators such as improving consumer and business confidence, easing inflationary pressures, and higher card spending suggest the worst may be over. However, they caution that future GDP revisions could remain larger than usual.
• NZ's residential mortgage lending in November totaled NZ$7.41b, up 13% y/y but down 4% m/m after seasonal adjustment. First-home buyers accounted for NZ$1.5b (20.2% of total), a 3.7% annual decline, while investors borrowed NZ$1.6b, up 41% y/y. The number of new mortgage commitments fell 1.5% m/m to 18,981.
• US Cash tsys are trading +/- 0.5bps, curve slightly flatter. The 10yr hovers just above the 4.50% level at 4.52%.
• NZGBs curve has bull-flattened today, the 2yr is -2.8bps and trades at yearly lows, while the 10yr is -8.4bps at 4.446%. The 3s10s is +0.5bps at trades at its steepest level this year.
• RBNZ dated OIS is pricing is little changed today with 54.7bps of cuts for the Feb meeting, and 100bps of cumulative cuts are now priced in by May. There is a cumulative 124bps of cuts priced in through to October 2025.
• There is no further data out for New Zealand this year.