ASIA STOCKS: Mixed Start To Dec Flows, Can Outflows Be Pared Before Year End?
The first trading day of Dec saw a mixed net flow trading picture for EM Asia markets, albeit with a negative sum thanks to outflows from Taiwan. All the markets have recorded net outflows in 2025 to date, and it will require a sharp turnaround in Dec inflow momentum to see positive 2025 outcomes by the end of the year. Tech related indices are up from Nov lows, but whether we can retest 2025 highs remains to be seen. Headwinds persist from AI/chip demand/valuation concerns, while the prospect of an easier US monetary policy backdrop remains a positive. Taiwan's Taiex has struggled to hold above 28000 in recent months. For South Korea's Kospi, dips remain supported, but likewise we have struggled to build positive momentum beyond 4000. Kospi versus Kosdaq flow trends will also be eyed.
- In India, net outflows to end the month saw YTD outflows get beyond -$16bn again. The RBI is expected to cut rates at the end of this week, while broader sentiment will also be dictated by US-India trade outcomes.
- Indonesian positive inflow momentum slowed towards the end of Nov, but it was still the standout for the month of Nov. The trend for the JCI look positive as the authorities look to maintain positive growth momentum into 2026. BI is likely to cut rates more, but will remain mindful of IDR trends.
- Elsewhere in SEA, trends were mixed to start Dec, but we mostly saw outflow pressures at the end of Nov.
Table 1: Asian Markets Net Equity Flows
| Yesterday | Past 5 Trading Days | 2025 To Date | |
| South Korea (USDmn) | 50 | -386 | -6284 |
| Taiwan (USDmn) | -858 | 47 | -7059 |
| India (USDmn)* | -390 | -207 | -16159 |
| Indonesia (USDmn) | -7 | -137 | -1803 |
| Thailand (USDmn) | 39 | 39 | -3363 |
| Malaysia (USDmn) | 14 | -24 | -4646 |
| Philippines (USDmn) | -32 | -73 | -705 |
| Total (USDmn) | -1184 | -740 | -40018 |
| * Data Up To Nov 28 |
Source: Bloomberg Finance L.P./MNI
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AUSSIE 10-YEAR TECHS: (Z5) Returns Lower
- RES 3: 95.982 - 76.4% retracement Sep’24 - Nov’24 downleg
- RES 2: 95.960 - High Apr 7 (cont.)
- RES 1: 95.900 - High Oct 17
- PRICE: 95.670 @ 16:16 GMT Oct 31
- SUP 1: 95.510 - Low Sep 3
- SUP 2: 95.415/95.300 - Low May 15 / Low Jan 14
- SUP 3: 95.275 - Low Nov 14 (cont) and a key support
Aussie 10-yr futures slipped lower Wednesday on the back of hotter-than-expected Australian inflation. This returned prices lower despite nascent signs of a technical recovery as recently as last week. The sustainability of the pullback will be dependent on prices holding above key short-term support at 95.510, the Sep 3 low. Near-term resistance remains 95.780, the Sep 12 high. A clear break of this level signals scope for a continuation higher and opens 95.960, the 76.4% retracement level for the Sep’24 - Nov’24 downleg.
AUSSIE 3-YEAR TECHS: (Z5) Struck by Strong CPI
- RES 3: 97.796 - 1.618 proj of the Sep 3 - 12 - 15 price swing
- RES 2: 96.780 - High Jun 26 (cont)
- RES 1: 96.700 - High Sep 12
- PRICE: 96.375 @ 16:13 GMT Oct 31
- SUP 1: 96.280 - Low May 15 (cont.)
- SUP 2: 95.900 - Low Jan 14 (cont.)
- SUP 3: 95.760 - Low 14 Nov ‘24
Having bounced well on the back of the mild US CPI print, Aussie 3-yr futures reversed course Wednesday on strong domestic inflation data containing RBA cut pricing through 2026. This keeps prices well below prior resistance at 96.615, the Sep 12 high, and refocuses attention on 96.280 as the next major support.
FED: Gov Waller: Still Advocating For A December Rate Cut
Gov Waller, one of the FOMC's more prominent doves, makes clear in an appearance on Fox Business that he supports a follow-up rate cut in December. He makes reference to Chair Powell's press conference comment that the Fed could skip a cut at the December meeting due in part to a lack of official government data during the federal shutdown (Powell: “what do you do if you are driving in the fog? You slow down").
- Waller says today: "Right now, we know that the labor market has been weak... We know inflation is going to come back down. Inflation expectations are anchored, and in that world, the standard of central bank wisdom is to look through it and proceed with worrying about the labor market. So in my view, we should just look at what the data is telling us and proceed on policy that way.... So this is why I'm still advocating that we cut policy rates in December, because that's what all the data is telling me to do. The fog might tell you to slow down. It doesn't tell you to pull over to the side of the road. You still have to go. You may want to be careful, but it doesn't mean to stop, and ... the right thing to do with policy is to continue cutting."
- This is of particular interest since he appeared to suggest he would have a more cautious outlook on further easing after cutting in October.
