ASIA STOCKS: Large Outflow Thematic Remains for Asia.
Mar-14 01:47
Large outflows for Taiwan, South Korea and India dominate flows as general risk aversion in markets is on the increase given rapid falls in equities continue and Asian currencies are under pressure.
- South Korea: Recorded outflows of -$389m yesterday, bringing the 5-day total to -$1,380m. 2025 to date flows are -$5,488m. The 5-day average is -$276m, the 20-day average is -$213m and the 100-day average of -$131m.
- Taiwan: Had outflows of -$751m yesterday, with total outflows of -$4,502m over the past 5 days. YTD flows are negative at -$13,422m. The 5-day average is -$900m, the 20-day average of -$551m and the 100-day average of -$184m.
- India: Saw outflows of -$162m as of the 12th, with a total outflow of -$907m over the previous 5 days. YTD outflows stand at -$15,834m. The 5-day average is -$181m, the 20-day average of -$313m and the 100-day average of -$203m.
- Indonesia: Posted outflows of -$55m yesterday, bringing the 5-day total to -$166m. YTD flows are negative at -$1,485m. The 5-day average is -$33m, the 20-day average is -$44m the 100-day average of -$32m.
- Thailand: Recorded outflows of -$28m yesterday, totaling -$203m over the past 5 days. YTD flows are negative at -$900m. The 5-day average is -$41m, the 20-day average of -$29m the 100-day average of -$20m.
- Malaysia: Experienced outflows of -$31m yesterday, contributing to a 5-day outflow of -$309m. YTD flows stand at -$1,635m. The 5-day average is -$62m, the 20-day average of -$44m the 100-day average of -$31m.
- Philippines: Saw inflows of +$8m yesterday, with net inflows of +$29m over the past 5 days. YTD flows are negative at -$226m. The 5-day average is +$6m, the 20-day average of -$5m the 100-day average of -$7m.
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FOREX: Yen Weakness Continues, Steady Trends Elsewhere
Feb-12 01:37
G10 focus remains centred on yen weakness. USD/JPY has risen back above 153.40 (session highs 153.46). This has been enough to push USD indices higher, the USD BBDXY last near 1301.7. There has been little aggregate shifts elsewhere in the G10 space.
- USD/JPY opened near 152.50, so is nearly 100pips higher versus these levels. We noted earlier the higher core backdrop from Tuesday was a yen headwind, although US yields sit down slightly for Wednesday trade so far.
- Hong Kong equity sentiment has opened up firmer, but trends are mixed elsewhere, while US futures aren't too far away from flat.
- BoJ Governor Ueda is before parliament at the moment, but hasn't delivered any market moving headlines so far.
- Yen weakness is driving crosses higher. AUD/JPY is back above 96.50, close to early Feb highs. EUR/JPY is closing in on 159.00
- For USD/JPY technicals, we are back close to the 100-day EMA, but the 50-day (around 154.70) is seen as more important resistance.
- AUD/USD was last near 0.6295, little changed, while NZD/USD has ticked up towards 0.5660.
- We had housing finance figures for Australia earlier, which continued to rise, but hasn't impacted FX sentiment.
- Later on we get preliminary Japan machine tool orders, but greater focus will rest with tonight's US CPI print.
JGBS: Mostly Cheaper Led By 10Y, BoJ Gov Ueda Reiterates Rhetoric
Feb-12 01:33
In Tokyo morning trade, JGB futures are weaker, -9 compared to settlement levels.
- BoJ Governor Ueda reiterated that the central bank will implement appropriate policy to achieve its price target, aligning with recent rhetoric. His remarks were made in response to a question in Parliament.
- M2 & M3 stock rose 1.3% y/y and 0.8% y/y respectively in January.
- “The 1.5% Japan government bond set to mature in March 2034 is cheapest against its peers, according to a Bloomberg analysis that interpolates against a curve.”
- Cash US tsys are flat to 1bp richer in today’s Asia-Pac session after yesterday’s modest sell-off.
- Cash JGBs are 1bp richer to 1bp cheaper across benchmarks, with the 10-year underperforming. The benchmark 10-year yield is 1.5bps higher at 1.332% after making a fresh cycle high of 1.337% today.
- There is 10-year linker supply due today.
- The swaps cure has twist-steepened, with rates 1bp lower to 1bp higher. Swap spreads are tighter.
CHINA: Central Bank Drains Liquidity via OMO.
Feb-12 01:30
- The PBOC issued CNY558bn of 7-day reverse repo at 1.50% in this morning’s operations.
- Total maturities today CNY697bn
- Net liquidity withdrawal CNY139bn.
- The PBOC controls and maintains liquidity in the interbank market through the issuance of reverse repo.
- The CFETS Pledged Repo Deposit Institutions 7 Day Index continues to decline down to 1.74%, from 1.90% yesterday.
- China overnight interbank rates are up to 1.84% from 1.50% yesterday.
- China 7-day interbank rates are down to 1.86% from 1.88% yesterday.
