AUSSIE BONDS: Modest Losses On A Data-Light Day
ACGBs (YM -1.0 & XM -4.0) are weaker on a data-light session.
- The April Westpac leading indicator was flat on the month but after falling 0.15% in March, the annualised 6-month rate eased to 0.19%, the lowest since October. This latter measure leads detrended growth by three to nine months and so suggests activity could slow in H2, but it is indicating that H1 should be stronger than late 2024. Westpac observes that the weaker index reflects recent global developments, but currently through markets and sentiment.
- (AFR) “The country’s housing supply could get the boost it needs after the Reserve Bank of Australia cut the official cash rate for the second time this year, improving residential market sentiment and increasing the borrowing capacities of prospective home buyers, industry analysts said.” (See link)
- Cash US tsys have extended yesterday’s bear-steepener, with yields flat to 2bps higher, in today’s Asia-Pac session.
- Cash ACGBs are 1-3bps cheaper with the AU-US 10-year yield differential -7bps.
- The bills strip is mixed with late whites outperforming, with pricing -2 to +4.
- RBA-dated OIS pricing is softer again across meetings today. A 25bp rate cut in July is given a 70% probability, with a cumulative 71bps of easing priced by year-end.
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ASIA STOCKS: Outflows Continue to Challenge Asian Bourses
The ongoing theme of outflows dominate Asia markets again as any inflows are short lived.
- South Korea: Recorded outflows of -$88m as of 18th, bringing the 5-day total to -$1,001m. 2025 to date flows are -$12,479, m. The 5-day average is -$200m, the 20-day average is -$431m and the 100-day average of -$156m.
- Taiwan: Had outflows of -$552m as of 18th, with total outflows of -$2,292m over the past 5 days. YTD flows are negative at -$20,009. The 5-day average is -$458m, the 20-day average of -$240m and the 100-day average of -$233m.
- India: Had inflows of +$470m as of the 17th, with total outflows of -$72m over the past 5 days. YTD flows are negative -$15,486m. The 5-day average is -$14m, the 20-day average of +$17m and the 100-day average of -$142m.
- Indonesia: Had outflows of -$487m as of 17th, with total outflows of -$1,273m over the prior five days. YTD flows are negative -$3,440m. The 5-day average is -$255m, the 20-day average -$100m and the 100-day average -$47m
- Thailand: Recorded outflows of -$40m as of the 18th, outflows totaling -$33m over the past 5 days. YTD flows are negative at -$1,422m. The 5-day average is -$7m, the 20-day average of -$25m the 100-day average of -$19m.
- Malaysia: Recorded inflows of +$9m as of the 18th, totaling -$75m over the past 5 days. YTD flows are negative at -$2,853m. The 5-day average is -$15m, the 20-day average of -$50m the 100-day average of -$40m.
- Philippines: Saw inflows of +$0m as of 17th, with net inflows of +$5m over the past 5 days. YTD flows are negative at -$287m. The 5-day average is +$1m, the 20-day average of -$4m the 100-day average of -$5m.
CHINA PRESS: Targeted Measures To Stabilise Foreign Trade Necessary
Authorities should consider subsidising logistics costs for industries with export dependence exceeding 30%, such as tax deductions for overseas warehouse construction used for cross-border e-commerce, said Zhu Keli, founding dean at the National Research Institute of New Economy. The State Council executive meeting last Friday called for customised targeted measures to stabilise employment and foreign trade in different industries and enterprises.
CHINA PRESS: China Needs To Boost Funding Support For Consumption
Officials could offset tariff disruption and declining external demand by implementing between CNY700 billion to CNY1 trillion of fiscal funds to promote domestic consumption, possibly issuing more special treasuries as early as Q2, said Wang Qing, analyst at Golden Credit Rating. The CNY300 billion consumer goods trade-in scheme should be expanded to include more goods and services, and increased funding, in response to growing momentum in redirecting export-oriented production toward domestic markets beginning in Q2. (Source: Securities Times)
