INDIA: CPI Continues to Decline

ACGBs (YM -7.0 & XM -3.0) are cheaper but sit near Sydney session highs.

• With the local calendar light today, attention has turned to movements in US tsys.
• Cash US tsys are flat to 2bps richer, with a steepening bias, in today's Asia-Pac session after Friday's heavy session. Last week, the US 10-year yield rose almost 50bps in 5 days, one of the biggest moves in that number of days since 1998.
• Cash ACGBs are 3-6bps cheaper with the AU-US 10-year yield differential at -5bps.
• Swap rates are 1-7bps higher, with the 3s10s curve steeper.
• The bills strip has bear-steepened, with pricing -3 to -8.
• RBA-dated OIS pricing is 2-12bps firmer across meetings today. A 50bp rate cut in May is given a 38% probability, with a cumulative 118bps of easing priced by year-end (based on an effective cash rate of 4.09%).

Relatively constant outflows mixed with the odd meaningful inflow continues to be the thematic we see as we watch the equity flows across the major markets. 

• South Korea: Recorded outflows of -$467m as of Friday, bringing the 5-day total to -$2,948m. 2025 to date flows are -$11,478, m. The 5-day average is -$590m, the 20-day average is -$296m and the 100-day average of -$152m.
• Taiwan: Had inflows of +$1,022m as of Friday, with total inflows of +$530m over the past 5 days. YTD flows are negative at -$17,717. The 5-day average is +$106m, the 20-day average of -$252m and the 100-day average of -$243m.
• India: Had outflows of -$518m as of the 9th, with total outflows of -$2,815m over the past 5 days.  YTD flows are negative -$16,476m.  The 5-day average is -$563m, the 20-day average of -$44m and the 100-day average of -$150m.
• Indonesia: Had outflows of -$13m as of Friday, with total inflows of -$313m over the prior five days.  YTD flows are negative -$2,180m.  The 5-day average is -$63m, the 20-day average -$43m and the 100-day average -$35m
• Thailand: Recorded outflows of -$34m as of Friday, outflows totaling -$250m over the past 5 days. YTD flows are negative at -$1,396m. The 5-day average is -$50m, the 20-day average of -$25m the 100-day average of -$18m.
• Malaysia: Recorded outflows of -$27m as of yesterday, totaling -$440m over the past 5 days. YTD flows are negative at -$2,778m. The 5-day average is -$88m, the 20-day average of -$60m the 100-day average of -$40m.
• Philippines: Saw inflows of +$1m as of Friday, with net outflows of -$78m over the past 5 days. YTD flows are negative at -$294m. The 5-day average is -$16m, the 20-day average of -$3m the 100-day average of -$6m.

The People’s Bank of China will likely cut the reserve requirement ratio or interest rates in a timely manner should U.S. tariff hikes cause negative impact on the economy, said Yu Yongding, a former PBOC monetary policy committee member. The PBOC will also likely increase liquidity injections via open market operations or purchase newly issued government bonds in the secondary market to support expansionary fiscal policy, said Yu. The PBOC may even need to directly intervene in the capital and property markets if volatilty triggers systemic financial and economic risks, said Yu. (Source: Shanghai Securities News)