ASIA STOCKS: Inflows Seen Across The Board, Thailand's Best Day Since Sep 2024
Jul-24 00:20
EM Asia equity inflows were positive across the board yesterday, while Indian inflows also rebounded, see the table below. Broader equity market gains helped fuel inflow momentum, with market sentiment buoyed by the US-Japan trade deal (along with positive spill over from the surge in Japan equities).
- Positive momentum was maintained for Taiwan inflows. July to date has now seen close to $7bn of net inflows into local stocks from offshore investors.
- Net inflows into South Korea also returned. This morning the Kospi is higher, above 3200, with focus on whether we can hold above this level. Local media (Chosun) reported: "South Korean government to raise ceiling on corporate tax to 25% from 24% and also increase stock transaction tax, Chosun Ilbo newspaper reports, without citing anyone." (via BBG, see this link). The plan also includes changes to taxes on dividend income.
- Thailand's +$139mn inflow was the strongest daily inflow since September last year. The SET index was up 2.34% yesterday, rising to 1220, near May highs for the index.
- Inflows were positive for other parts of SEA, but of smaller magnitude.
Fig 1: Asian Market Net Equity Flows
| Yesterday | Past 5 Trading Days | 2025 To Date | |
| South Korea (USDmn) | 302 | 961 | -7158 |
| Taiwan (USDmn) | 300 | 1914 | 1029 |
| India (USDmn)* | 535 | 46 | -8395 |
| Indonesia (USDmn) | 41 | 51 | -3607 |
| Thailand (USDmn) | 139 | 335 | -1992 |
| Malaysia (USDmn) | 23 | 19 | -2836 |
| Philippines (USDmn) | 3 | -2 | -620 |
| Total (USDmn) | 1344 | 3323 | -23578 |
| * Data Up To July 22 |
Source: Bloomberg Finance L.P./MNI
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AUSSIE BONDS: Modestly Richer With US Tsys, Middle East Ceasefire Buoys Risk
Jun-24 00:08
ACGBs (YM +3.0 & XM +2.5) are modestly richer with US tsys.
- US tsys and US stocks rallied on an initially muted response by Iran to US bombing over the weekend.
- Then, President Trump announced a ceasefire between Iran and Israel. "*TRUMP: ANNOUNCES 12-HOUR CEASEFIRE BETWEEN IRAN AND ISRAEL" - BBG.
- That said, "*POWERFUL EXPLOSIONS IN WESTERN, CENTRAL TEHRAN, KARAJ: IRNA" - BBG
- The Federal Reserve could resume cutting interest rates if expectations for tariffs to lead to price rises do not materialise soon, Chicago Fed President Austan Goolsbee said Monday.
- Cash ACGBs are 2-3bps richer with the AU-US 10-year yield differential at -15bps.
- The bills strip is flat to +2.
- RBA-dated OIS pricing is little changed across meetings today. A 25bp rate cut in July is given a 84% probability, with a cumulative 75bps of easing priced by year-end.
- Today, the local calendar will be empty, ahead of May CPI data on Wednesday. Consensus expects it to ease to 2.3% y/y from 2.4%. Trimmed mean ticked up to 2.8% y/y in April and has been around 2.7-2.8% since December, suggesting a stalling in disinflation. The next RBA meeting is July 7-8.
- The AOFM plans to sell A$1000mn of the 3.50% 21 December 2034 bond tomorrow.
US TSYS: Cash Open
Jun-24 00:03
TYU5 is trading 111-08, down 0-06+ from its close.
- The US 2-year yield opens around 3.855%, down 0.01 from its close.
- The US 10-year yield opens around 4.3475%, unchanged from its close.
- MNI BRIEF: No Tariff Inflation Could Mean Fed Cuts - Goolsbee. The Federal Reserve could resume cutting interest rates if expectations for tariffs to lead to price rises do not materialize soon, Chicago Fed President Austan Goolsbee said Monday. Goolsbee said he’s been surprised at the absence of any inflation spikes since tariffs were first announced in April.
- MNI US DATA: Flash PMIs Cool By Less Than Expected. The S&P Global US PMIs were stronger than expected in the flash June releases as they cooled only modestly after May's improvement. The manufacturing PMI held steady at 52.0 for a second month (cons 51.0) after 50.2 in both March and April whilst services dipped to 53.1 (cons 53.0) after 53.7 in May.
- “The Fed also holds a public meeting on Wednesday to review the SLR rule, a key constraint on bank balance sheets during Treasury market stress.”(BBG)
- The 10-year yield attempted to break below its 4.30% support overnight, it failed on its first attempt but a sustained move back below there would likely see the move pick up momentum. 10-year yields would need to get back above 4.45/4.50% again to alleviate this downward pressure.
- Data/Events: Philadelphia Fed Non-Man Activity, Current Account Balance, FHFA House Price Index
GOLD: Easing Of Geopolitical Tensions Drives Gold Lower
Jun-23 23:45
Gold prices are 0.5% lower at $3350.2/oz after US President Trump announced that there would be a ceasefire between Iran and Israel and an end to their war in 24 hours (0800 AEST Wed/2300 BST Tues/1800 EDT Tues). Gold was little changed on Monday finishing up 0.1% to $3368.48 after a high of $3395.07. It moderated from there following news of Iran’s muted response to US strikes on its nuclear facilities.
- Officially, Iran will begin the truce in 6 hours allowing all planned missions to take place followed by Israel “upon the 12th hour”.
- Iran responded to the US attacks on its nuclear facilities on the weekend by targeting its base in Qatar. It notified Qatar first though and the missiles were intercepted causing little damage. VP Vance said that the move was “symbolic”.
- Markets have responded to the ceasefire news with WTI down 5.0% to $65.13/bbl and the S&P e-mini up 0.5%. The BBDXY USD index is down 0.2% and US yields lower.
- Pullbacks in gold are still seen as corrective. It is holding today above initial support at $3338.8, 12 June low. Initial resistance is at $3451.3, 16 June high.
