EM ASIA CREDIT: Indonesia: Possible EUR deal

There are a number of RBNZ speakers this week but the bank has said there will be no new economic information. There are also some monthly data releases.

• Q2 manufacturing data print Tuesday including volumes. Manufacturing volumes rose 2.4% q/q in Q1. Q2 GDP prints on September 18, which the RBNZ expected to fall 0.3% q/q in its August projections.
• RBNZ Chief Economist Conway speaks to the Auckland Chamber of Commerce on Wednesday at 1230-1400 NZST. The central bank has said there will be no new information and that it won’t be livestreamed.
• On Thursday, Governor Hawkesby gives “brief remarks” at the Financial Services Council conference and again there will be no new information on the economy or the August MPC decision but there will be Q&A.
• RBNZ Manager Balance Sheet Policy Craigie will speak on the Liquidity Management Review at 1330 on Wednesday.
• July net migration is out on Wednesday. With the deterioration in the NZ labour market it has been trending lower.
• Friday sees August BusinessNZ manufacturing PMI which returned above the breakeven-50 mark in July after two months of contraction.
• August card transaction data also print on Friday. The retail data is showing some recovery in spending but it remains soft. It underestimated nominal Q1 & Q2 retail sales substantially. 

US Equities fell on Friday unable to hold their gains on the poor labour data which will have implications for growth going forward. This morning US futures have opened higher in sympathy to the move in Asian stocks being led by the Nikkei in response to Ishiba stepping down, E-minis +0.20%, NQU5 +0.40%. The JPY crosses have had quite the reversal this morning  on the back of this news. After looking like momentum higher might have stalled to end the week they have all gapped a lot higher today, is this news the catalyst to reinstate the momentum higher, I am skeptical but time will tell.

• EUR/JPY - Overnight range 172.49 - 173.20, Asia is trading around 173.60. This pair again stalled Friday night above 1.7300. Technically this looks like a solid break but I am always skeptical of a break in thin liquidity on news in early Monday Asian trading. Let's see if the price can consolidate and build on these gains.
• GBP/JPY - Overnight 198.68 - 199.79, Asia trades around 200.10. This pair stalled again just below 200.00 on the NFP. Price has gapped higher in early Asian trading to break above 200.00, can it extend from here ?
• NZD/JPY - Overnight range 86.63 - 87.11, Asia is currently dealing 87.35. The pair looked to potentially have put a top in just above 87.00 after the NFP. This morning is testing that theory, this still looks to be the right area to be fading. I would start questioning that should the price start extending back above 88.00.
• CNH/JPY - Overnight range 20.6140 - 20.7860, Asia is currently trading around 20.8000. This pair has remained above its pivotal 20.30/20.40 support. The pair continues to trade comfortably within its recent 20.40-21.00 range. A sustained break back above 21.00 is needed to potentially begin an extension higher.

Fig 1 : NZD/JPY Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

Taiwan has had its largest inflow in a month. 

• South Korea: Recorded inflows of +$16m as of Friday,  bringing the 5-day total to +$829m. 2025 to date flows are -$5,316m. The 5-day average is +$166m, the 20-day average is -$13m and the 100-day average of +$62m.
• Taiwan: Had inflows of +$1,211m yesterday, with total inflows of +$1,699 m over the past 5 days. YTD flows are positive at +$1,798m. The 5-day average is +$340m, the 20-day average of -$139m and the 100-day average of +$209m.
• India: Had outflows of -$78m as of the 3rd, with total outflows of -$2,088m over the past 5 days.  YTD flows are negative -$15,692m.  The 5-day average is -$418m, the 20-day average of -$215m and the 100-day average of -$3m.
• Indonesia: Had outflows of -$19m as of the 3rd, with total outflows of -$322m over the prior five days.  YTD flows are negative -$3,327m.  The 5-day average is -$64m, the 20-day average +$21m and the 100-day average -$13m.
• Thailand: Recorded inflows of +$31m Friday, with inflows totaling +$22m over the past 5 days. YTD flows are negative at -$2,486m. The 5-day average is +$4m, the 20-day average of -$40m and the 100-day average of -$14m.
• Malaysia: Recorded outflows as of the 4th of -$26m, totaling -$171m over the past 5 days. YTD flows are negative at -$3,806m. The 5-day average is -$34m, the 20-day average of -$34m and the 100-day average of -$11m.
• Philippines: Recorded inflows of +$2m Friday,  with net outflows of -$28m over the past 5 days. YTD flows are negative at -$725m. The 5-day average is -$6m, the 20-day average of -$5m the 100-day average of -$4m.