ASIA FX: Most SEA FX Higher, USD/IDR Offered Above 16600 Again, INR Outperforms

• All tsys futures contracts are trading above Monday's highs, trading volumes being largely linked to rolls. TU +00⅜ at 102-30¼, while TY is +03+ at 109-31+, we trade just below 110-00 (High Feb 7 and the bull trigger) a break here would strengthen a bullish theme and open 110-19, a Fibonacci retracement. On the downside, a break back below 108-21+ (Feb 19 lows) would open a move to key short-term support at 108-04 (Feb 12 low) with clearance of this support reinstating a bearish theme.
• Overnight, Tsys options were skewed towards upside protection, matching the risk-off bid in early US session. Key flows included a short-term play targeting a the 10yr to hit 4.2% within a couple of weeks
• Cash tsys are 2-3bps richer today, having traded in a narrow range post the open. The 2yr is -2.1bps at 4.153% while the 10yr yield is trading at ytd lows of 4.377%. The 2s10s continues to flatten, last -1bps at 21.504, however still off the ytd lows of 16bps, set Feb 7th
• The 5yr is -2.3bps at 4.216% ahead of the $70b 5yr auction later tonight, last night the 2yr auction drew record indirect bidders.
• Projected rate cuts through mid-2025 steady to firmer vs. this morning levels (*) as follows: Mar'25 steady at -0.5bp, May'25 steady at -7.1bp, Jun'25 at -18.0bp (-17.3bp), Jul'25 at -25.6bp (-23.6bp).
• The Fed's Barr, Logan & Barkin are scheduled to speak later today
• Later today we have FHFA House Price Index, Conf. Board Consumer Confidence & Richmond Fed Manufact. Index

Asian equities broadly declined, led by losses in technology and semiconductor stocks amid fresh US restrictions on Chinese investments. The Hang Seng Tech Index fell on the open before paring loses as investors looked to buy the dip, while TSMC and Samsung Electronics weighed on Taiwan and South Korea. The BOK cut rates, but the Kospi still ended lower. Australia saw weakness in consumer stocks following disappointing results from a number of companies.

• China & Hong Kong equities plunged on the open with the HS Tech Index down over 4% at one stage, however we have seen a strong reversal with the index now trading flat for the session. Investors seem to largely ignoring both the slump in the SOX and Nasdaq overnight and the headlines out about Trump tightening chip controls. The CSI 300 is 0.40% lower, while the HSI is -0.60%, property and consumer staples are the worst performing sectors with both sectors trading roughly 1% lower.
• Japan's Nikkei 225 is 1% lower, with tech stocks leading declines due to concerns over US semiconductor restrictions on China. However, trading houses like Mitsubishi Corp. and Marubeni gained after Berkshire Hathaway reaffirmed confidence in the sector. The broader TOPIX is trading better, although still down 0.20% for the session.
• South Korea's Kospi declined 0.4%, even as the BOK cut rates to 2.75%, as expected. Semiconductor stocks weakened amid US-China chip tensions, with Samsung Electronics and SK Hynix underperforming.
• Taiwan's TAIEX is 0.8% lower, with TSMC among the biggest drags on worsening US-China chip restrictions. Investors turned cautious following Trump’s latest executive order targeting Chinese investments.
• Australia's ASX 200 is 0.60% lower as corporate earnings drove stock-specific volatility, with consumer stocks the worst performing. Viva Energy and Johns Lyng plunged after weak earnings, Adairs tumbled 12%, extending Monday’s losses after reporting 1H25 EBITDA of A$39.1M, well below the A$61.5M consensus estimate,  Domino’s fell 11% after reiterating a 1H loss, citing ongoing weakness in France and Japan, while Zip surged 16% after providing strong full-year revenue guidance, posting record cash earnings, and reporting a 40.3% YoY increase in US TTV, reinforcing confidence in its FY25 two-year targets. In New Zealand, Ryman Healthcare tumbled 23% after resuming trade post NZ$1 billion capital raise.