ASIA STOCKS: Indian Flows Recovering, Modest Outflows For SK & Taiwan Past Week
Oct-31 03:54
The past week has seen offshore India inflows firm, whilst we have seen modest outflows from South Korea and Taiwan, despite mostly positive local stock sentiment.
- For India, this has largely reflected an over $1bn inflow day on Tuesday. Local equities remain elevated, albeit struggling for fresh upside, with the NIFTY near 26000, with moves above this level unable to be sustained so far in Oct. Markets are likely waiting on fresh news around US-India trade talks. YTD outflows have been curbed back to -$15bn, so any fresh positive news could drive a further recovery.
- For South Korea, the Kospi remains well supported on dips, last just above 4100. There may be some concern given the pace of the run higher, but Thursday results for Apple and Amazon in the US should keep broader tech equity sentiment supported. For Taiwan it is a similar backdrop.
- In South East Asia, Indonesian inflow momentum remains reasonable, with the JCI supported sub 8000. Outflow trends have been evident elsewhere though.
Table 1: Asian Markets Net Equity Flows
| Yesterday | Past 5 Trading Days | 2025 To Date | |
| South Korea (USDmn) | 47 | -213 | 2341 |
| Taiwan (USDmn) | 75 | -244 | 5633 |
| India (USDmn)* | -88 | 1024 | -15056 |
| Indonesia (USDmn) | 47 | 335 | -2593 |
| Thailand (USDmn) | 15 | -70 | -3000 |
| Malaysia (USDmn) | -15 | -138 | -4179 |
| Philippines (USDmn) | -6 | -38 | -752 |
| Total (USDmn) | 74 | 656 | -17606 |
| * Data Up To Oct 29 |
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JGBS: Cash Bonds Little Changed At Lunch
Oct-01 03:13
At the Tokyo lunch break, JGB futures are stronger, +11 compared to settlement levels.
- The Q3 Tankan survey printed in line with expectations and Q2 but FY25 capex intentions increased 1pp to 12.5%. Large company business conditions have been moving sideways at a solid level since the start of last year, especially for the non-manufacturing sector.
- The large manufacturers' index rose 1 point to 14 in Q3 while the outlook for Q4 is forecast to deteriorate 2 points. The series has not been affected by new US tariffs and the 2025 average is slightly higher than 2024's.
- Non-manufacturers' conditions were steady at 34, well above the series average of +7.3, with the outlook at 28.
- Small non-manufacturers are also outperforming manufacturers with the index at 14 (down 1 point) compared to +1 (stable). The outlook for both sectors improved 1 point.
- The September BoJ summary of opinions showed a bias towards a resumption of tightening.
- (Bloomberg) Japan will get its second prime minister in just over a year when the ruling Liberal Democratic Party holds a leadership election on Oct. 4.
- Cash US tsys are slightly mixed, with a steepening bias, in today's Asia-Pac session after yesterday's modest twist-steepener.
- Cash JGBs are little changed across benchmarks.
- Swap rates are flat to 1bp lower, with a steepening bias. Swap spreads are mixed.
AUSSIE BONDS: Holding Cheaper, Market Continues To Price Out RBA Cut
Oct-01 01:48
ACGBs (YM -4.0 & XM -5.5) remain weaker.
- S&P Global PMI Manufacturing Index falls to 51.4 from 53 in Aug.
- Cash US tsys are slightly cheaper in today's Asia-Pac session after yesterday's modest twist-steepener.
- Cash ACGBs are 4-7bps cheaper with the AU-US 10-year yield differential at +22bps.
- The latest ACGB Dec-34 supply achieved a weighted average yield that printed 0.40bp through prevailing mids (per Yieldbroker). However, the cover ratio decreased to 2.1033x, thelowest since its debut in 2023, from 3.1708x.
- The bills strip is -4 to -6 beyond the first contract.
- RBA-dated OIS pricing has firmed modestly across meetings following yesterday’s RBA Policy Decision. Pricing across meetings is 1-4bps firmer than yesterday’s pre-RBA levels. Notably, this post-RBA move leaves pricing some 10-19bps firmer than last Wednesday’s pre-CPI levels.
- A 25bp rate cut in October is given a 35% probability, with a cumulative 11bps of easing priced by year-end.
STIR: RBA Dated OIS’ Firming Since August CPI Extends After RBA Decision
Oct-01 01:34
RBA-dated OIS pricing has firmed modestly across meetings following yesterday’s RBA Policy Decision.
- At the time of writing, pricing across meetings was 1-4bps firmer than yesterday’s pre-RBA levels.
- Notably, this post-RBA move leaves pricing some 10-19bps firmer than last Wednesday’s pre-CPI levels.
- A 25bp rate cut in October is given a 35% probability, with a cumulative 11bps of easing priced by year-end.
Figure 1: RBA-Dated OIS – Current Vs. Pre-CPI
Source: Bloomberg Finance LP / MNI
