ASIA STOCKS: Equity Flows Mixed, India Continues To See Heavy Selling
Mixed flows on Tuesday, with South Korea recording a small inflow, while Taiwan continues to see heavy selling and a $1.7b outflows for the past 5 sessions. India has been the worst hit region this year with a total outflow of almost $9b.
- South Korea: Recorded +$310m in inflows yesterday, reducing the 5-day total to -$1.40b. YTD flows remain negative at -$1.36b. The 5-day average is -$279m, worse than the 20-day average of -$68m and the 100-day average of -$152m.
- Taiwan: Posted heavy outflows of -$577m yesterday, bringing the 5-day total to -$1.72b. YTD flows are negative at -$3.88b. The 5-day average is -$345m, worse than the 20-day average of -$229m and the 100-day average of -$126m.
- India: Recorded -$416m in outflows yesterday, leading to a 5-day total of -$1.17b. YTD outflows remain significant at -$8.84b. The 5-day average is -$233m, better than the 20-day average of -$413m but worse than the 100-day average of -$158m.
- Indonesia: Posted -$12m in outflows yesterday, bringing the 5-day total to -$70m. YTD flows are negative at -$258m. The 5-day average is -$14m, close to the 20-day average of -$12m and the 100-day average of -$10m.
- Thailand: Saw +$20m in inflows yesterday, reducing the 5-day total to -$102m. YTD flows are negative at -$321m. The 5-day average is -$20m, slightly worse than the 20-day average of -$19m and the 100-day average of -$16m.
- Malaysia: Registered -$4m in outflows yesterday, bringing the 5-day total to -$153m. YTD flows are negative at -$740m. The 5-day average is -$31m, better than the 20-day average of -$36m but worse than the 100-day average of -$26m.
- Philippines: Recorded +$1m in inflows yesterday, bringing the 5-day total to +$19m. YTD flows remain negative at -$101m. The 5-day average is +$4m, better than the 20-day average of -$5m and the 100-day average of -$2m.
Table 1: EM Asia Equity Flows
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US TSYS: Re-Opens Weaker, Day Of Mourning On Thursday
TYH5 is 108-16+, -0-04 from NY closing levels.
- Tsy futures finished last week near session lows following the December manufacturing ISM survey, which beat expectations. The headline reading of 49.3 improved from 48.4 prior and a 9-month high, besting the survey expectation of 48.4.
- This week, US economic data and Treasury supply are being brought forward to accommodate Thursday's "day of mourning" to honour President Carter. The Federal holiday sees most markets closed; the exception so far is CME rates, which will operate on a shortened session.
- Thursday's weekly jobless and continuing claims will be released on Wednesday according to the Dept of Labor site.
AUSSIE 10-YEAR TECHS: (H5) Stable Start
- RES 3: 96.975 - High Mar 14
- RES 2: 96.501 - 76.4% of the Mar 14 - Nov 1 ‘23 bear leg
- RES 1: 96.207 - 61.8% of the Mar 14 - Nov 1 ‘23 bear leg
- PRICE: 95.565 @ 14:59 GMT Jan 3
- SUP 1: 95.460 - Low Dec 20
- SUP 2: 95.275 - Low Nov 14
- SUP 3: 94.734 - 1.0% 10-dma envelope
Aussie 10-yr futures had a stable start to 2025, keeping the technical outlook unchanged for now. A previous bull cycle in prices has been hampered by S/T pullbacks late last year, however a continuation higher would refocus attention on resistance at the 96.207 level, a Fibonacci retracement. On the downside, a stronger bearish reversal would instead expose 95.275.
OIL: Crude Exceeds Further Resistance Levels, Strong Start To 2025
Oil prices rose around a percent on Friday to continue the uptrend seen during the week. Better risk appetite, continued US crude drawdowns and technicals seem to have outweighed pessimism over China’s economy. The USD index fell 0.1% driven by stronger US equities, which also supported dollar-denominated crude.
- WTI rose 1.3% to $74.07/bbl to be up almost 5% last week, above resistance at $73.73 opening up $73.96. The bull trigger is at $76.41. It reached a peak of $74.35, the highest since early October.
- Brent finished last week up almost 4% after a 1.0% rise on Friday to $76.69/bbl, breaching initial resistance at $76.55 opening $79.50, key resistance. It made an intraday high of $76.73.
- Goldman Sachs estimates that “oil prices are a few dollars undervalued” currently.
- The election of Trump as the next US President has increased expectations that US oil production will rise. However, before the end of his term President Biden is likely to ban new offshore oil and gas projects covering around 625mn acres of coast, according to Bloomberg. The area includes the Atlantic, Pacific and eastern Gulf of Mexico. The decision is likely to be announced today.
