SOUTH KOREA: Country Wrap: More Cash Handouts to Come
Sep-12 05:18
Market Summary: The KOSPI is having a very strong period of late, up +1.28% Friday and +5.71% for the week on hopes that the planned tax changes to capital gains won't proceed. The Won has done little on the week, marginally better at 1,387.60 whilst bonds are set to finish the week lower in yield with the KTB 10-Yr down -4bps to 2.82%
- A second cash handout has been announced with a voucher scheme offering cash handouts to 90 percent of citizens to be implemented later this month, officials said Friday, as part of efforts to stimulate private consumption. (source Korea Times)
- Korea's Finance Ministry suggested that the economy continues to face concerns due to a delayed recovery in construction investment and slowing exports, but positive signs, including improved consumer sentiment, continue to strengthen. (source Korea Times)
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LOOK AHEAD: Eurozone Timeline of Key Events (Times BST)
Aug-13 05:18
| Date | Time | Country | Event |
| 13-Aug | 0700 | DE | HICP (f) |
| 13-Aug | 0800 | ES | HICP (f) |
| 14-Aug | 0745 | FR | HICP (f) |
| 14-Aug | 1000 | EU | IP / GDP 2nd Est / Employment |
| 18-Aug | 1000 | EU | Trade Balance |
| 19-Aug | 0900 | EU | EZ Current Account |
| 20-Aug | 0700 | DE | PPI |
| 20-Aug | 1000 | EU | HICP (f) |
| 21-Aug | 0815 | FR | S&P Global Flash PMI (p) |
| 21-Aug | 0830 | DE | S&P Global Flash PMI (p) |
| 21-Aug | 0900 | EU | S&P Global Flash PMI (p) |
| 21-Aug | 1000 | EU | Construction Production |
| 21-Aug | 1500 | EU | Consumer Confidence Indicator (p) |
| 22-Aug | 0700 | DE | GDP (f) |
| 22-Aug | 0745 | FR | Manufacturing Sentiment |
| 22-Aug | 1000 | EU | Negotiated Wage Growth |
CHINA: Country Wrap: Plans Afoot to Subsidize Consumer Loans
Aug-13 05:17
- China plans to subsidize interest payments on eligible personal consumer loans from Sept. 2025 to Aug. 2026, according to a statement from the Ministry of Finance. Subsidy applies to loans under 50,000 yuan for consumption, and designated big-ticket items over 50,000 yuan — including autos, education, and healthcare. China’s consumer loan interest subsidy program is expected to support a recovery in lending, especially for operating loans in the consumer services sector, while benefiting major banks and enhancing their market share, according to analysts from brokerages including China Merchants Securities. (source BBG)
- resident Xi Jinping and Brazilian President Luiz Inacio Lula da Silva have expressed their opposition to unilateralism and protectionism, and pledged to promote the greater development of bilateral ties. In a phone conversation between the two heads of state on Tuesday, Xi told Lula that China is ready to work with Brazil to set an example of unity and self-reliance among major countries of the Global South, and to jointly build a more just world and a more sustainable planet. (source China Daily)
- China and Hong Kong markets are also higher. The CSI 300 last around +0.90%. The HSI is up around +1.90%, with the tech sub index +2.35%.
- Yuan Reference Rate at 7.1350 Per USD; Estimate 7.1768
- Ten year government bond yields are modestly lower with the 10-year at 1.72%
JGBS: Cheaper After Poor 5Y Auction
Aug-13 05:05
JGB futures are weaker and at session lows, -26 compared to settlement levels, after today’s disappointing 5-year auction.
- Today’s 5-year JGB auction showed poor signals on demand. The low price came in line with expectations at 99.72, and the bid-to-cover ratio declined to 2.9616x from 3.5411x. Meanwhile the tail widened slightly to 0.03 from 0.02. The result aligns with the poor demand signals seen at this month’s 10-year auction. With yields higher and the 2s/5s curve steeper than last month, today’s outcome represents a deterioration in overall demand conditions.
- "JAPAN'S AKAZAWA: NOT BAD IF TRUMP EXEC ORDER COMES BY MID SEPT, US CAN'T GET INVESTMENT HELP IF PROMISES NOT KEPT. JAPAN COULD INCREASE ACTUAL US INVESTMENT PERCENTAGE, 1-2%, INVESTMENT FOLLOWS PAST CASES, COULD BE HIGHER" - BBG
- Cash US tsys are slightly mixed, with a flattening bias, in today's Asia-Pac session after yesterday's twist-steepener.
- Cash JGBs are showing a twist-flattening, with benchmark yields 3bps higher to 2bps lower. The benchmark 5-year yield is 2.6bps higher at 1.069% versus the cycle high of 1.19%.
- Swaps rates flat to 1bp higher, with swap spreads tighter out to the 20-year.
- Tomorrow, the local calendar will be empty ahead of Q2 GDP on Friday.
