ASIA STOCKS: Mostly Outflows At The End Of Last Week, Taiwan Still Positive
At the end of last week, only Taiwan saw positive inflows into local equities from offshore investors. South Korea saw a very sharp drop in the Kospi on Friday, down 3.88%. We are higher today, last around +1% for the index. Near term focus remains on local government tax shifts. The ruling party will reportedly make its position on capital gains tax known soon: "South Korea’s ruling Democratic Party chief Jung Chung-rae said the party will determine its position on capital gains tax as quickly as possible and inform the public." (via BBG a short while ago).
- More broadly inflow sentiment may be dictated by global equity trends. Friday's NFP report and ISM dip cast a shadow over the US equity market outlook. Futures are are higher in the first part of trade today, with Eminis up around 0.25%.
- Taiwan inflows remained positive, albeit with the 5-day rolling sum of inflows cooler that what we saw through parts of July.
- Indian outflow momentum remained strong to the end of last month. Higher tariff rates have likely weighed on sentiment. The Nifty is back at levels from mid June.
- Thailand also saw outflows on Friday, unwinding some of the recent positive inflows seen.
Table 1: Asian Markets Net Equity Flows
| Yesterday | Past 5 Trading Days | 2025 To Date | |
| South Korea (USDmn) | -549 | 931 | -5483 |
| Taiwan (USDmn) | 171 | 821 | 2516 |
| India (USDmn)* | -703 | -2000 | -11007 |
| Indonesia (USDmn) | -4 | -142 | -3753 |
| Thailand (USDmn) | -58 | 47 | -1837 |
| Malaysia (USDmn) | -3 | -89 | -2949 |
| Philippines (USDmn) | -1 | -8 | -623 |
| Total (USDmn) | -1148 | -441 | -23137 |
| * Data Up To July 31 |
Source: Bloombegr Finance L.P./MNI
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USDCAD TECHS: Trend Outlook Remains Bearish
- RES 4: 1.4111 High Apr 4
- RES 3: 1.4016 High May 12 and 13 and a key resistance
- RES 2: 1.3920 High May 21
- RES 1: 1.3674/3776 20- and 50-day EMA values
- PRICE: 1.3607 @ 16:12 BST Jul 4
- SUP 1: 1.3557 Low Jul 03
- SUP 2: 1.3540 Low Jun 16 and the bear trigger
- SUP 3: 1.3503 1.618 proj of the Feb 3 - 14 - Mar 4 price swing
- SUP 4: 1.3473 Low Oct 2 2024
The trend needle in USDCAD points south and this week’s move down reinforces current conditions. S/T gains between Jun 16 - 23 appear to have been corrective. Key support and the bear trigger is 1.3540, Jun 16 low. Clearance of this level would resume the downtrend and open 1.3503, a Fibonacci projection. Pivot resistance is at the 50-day EMA, at 1.3776. A clear break of this average would signal scope for a stronger recovery.
AUDUSD TECHS: Bull Cycle Remains In Play
- RES 4: 0.6700 76.4% retracement of the Sep 30 ‘24 - Apr 9 bear leg
- RES 3: 0.6688 High Nov 7 ‘24
- RES 2: 0.6603 High Nov 11 ‘24
- RES 1: 0.6590 High Jul 01
- PRICE: 0.6548 @ 16:05 BST Jul 04
- SUP 1: 0.6521 20-day EMA
- SUP 2: 0.6468/6373 50-day EMA / Low Jun 23 and a reversal trigger
- SUP 3: 0.6357 Low May 12
- SUP 4: 0.6275 Low Apr 14
The trend set-up in AUDUSD remains bullish and the pair is holding on to its recent gains. The latest break higher maintains the bullish price sequence of higher highs and higher lows, the definition of an uptrend. Moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 0.6603 next, the Nov 11 2024 high. Key short-term support has been defined at 0.6373, the Jun 23 low.
EURJPY TECHS: Northbound
- RES 4: 171.88 High Jul 19 ‘24
- RES 3: 171.28 1.382 proj of the Feb 28 - Mar 18 - Apr 7 price swing
- RES 2: 171.09 High Jul 23 ‘24
- RES 1: 170.61 High Jul 03
- PRICE: 170.22 @ 16:04 BST Jul 04
- SUP 1: 169.04 Low Jul 02
- SUP 2: 167.87 20-day EMA
- SUP 3: 167.13 Low Jun 20
- SUP 4: 165.66 50-day EMA
EURJPY traded higher on Thursday resulting in a print above 170.47, the 76.4% retracement of the Jul 11 - Aug 5 sell-off. A clear break of this price point would strengthen bullish conditions and signal scope for extension. This would open 170.28 next, a Fibonacci projection. The trend is overbought, a pullback would unwind this condition. Support to watch lies at 167.87, the 20-day EMA.
