ASIA STOCKS: Positive Taiwan Inflow Trend Continues, Thailand Inflows Slowed
Taiwan net equity flows remained the standout into the end of last week. The 5-day sum was +$1.422bn. This is down slightly from recent highs (just above $2.5bn), but the 5-day rolling sum of net inflows has been positive since late June, indicating consistent positive inflow momentum, as Taiwan equities ride firmer chip/AI sentiment. The Taiex sits just off multi month highs in latest dealings this morning.
- Inflows also remained positive into South Korea, with last week seeing slightly stronger inflow momentum at +$1.64bn compared to Taiwan. Still, Taiwan maintains better inflow trends more broadly. The Kospi still struggles above the 3200 level though and has been volatile in the first part of trade today. We shot higher on positive Samsung chip order headlines, but haven't been able to sustain these gains.
- Focus also remain on US-South Korea trade negotiations ahead of the Aug 1 deadline this Friday, with focus on US access to South Korean agricultural markets, while South Korea may also invest into US shipbuilding.
- Recent positive Thailand equity inflow momentum slowed on Friday, with border clashes between Thailand and Cambodia not likely helping sentiment. Still net outflows were very modest and remain up strongly in the past 5 days. Note Thailand markets are closed today.
- Elsewhere flow trends were generally negative, with India still struggling to see upside momentum.
Table 1: Asian Markets Net Equity Flows
| Yesterday | Past 5 Trading Days | 2025 To Date | |
| South Korea (USDmn) | 263 | 1640 | -6356 |
| Taiwan (USDmn) | 331 | 1422 | 1695 |
| India (USDmn)* | -231 | -113 | -9008 |
| Indonesia (USDmn) | -14 | -8 | -3611 |
| Thailand (USDmn) | -8 | 273 | -1951 |
| Malaysia (USDmn) | -32 | -21 | -2863 |
| Philippines (USDmn) | 2 | 6 | -616 |
| Total (USDmn) | 310 | 3199 | -22709 |
| * Data Up To July 24 |
Source: Bloomberg Finance L.P./MNI
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US FISCAL: Available "Extraordinary" Measures To Ward Off X-Date Pick Up
Treasury reported Friday that as of Jun 25 it had $130B in remaining "extraordinary" measures (of a total $378B available) to ward off an "x-date" of running out of resources before defaulting. That's the highest in 2 weeks.
- Combined with $334B cash as of Jun 25 (after a bit of a buildup after the mid-June tax deadline), that's a total of roughly $465B in total resources available.
- We noted earlier this week that Treasury told Congress that it was required to extend its debt issuance suspension period from Jun 27 to Jul 24, in effect prolonging the use of extraordinary measures while we await a resolution to the debt limit impasse, probably through the fiscal legislation currently going through Congress.
- Realistically, fiscal dynamics so far this year point to potential for Treasury to get into September without running out of cash + extraordinary measures. That seems to be the broad market expectation.
US DATA: Cleveland, Dallas Fed PCE Medians Show Progress But Still Above-Target
The Cleveland and Dallas Fed's median PCE metrics showed a notable drop in May. All indices suggest PCE inflation running above 2%, and higher than the actual core and headline PCE measures, but pressures appear to have cooled from a pickup in the early months of the year.
- The Cleveland Fed's median PCE measure came in at 0.22% M/M, a 10-month low after April's 15-month high 0.31%. This left median PCE at 3.01% on a Y/Y basis, down from 3.06% prior for a the joint-lowest (with Feb) since September 2021.
- The Dallas Fed's annualized median rate fell to 2.01%, from 2.65% prior for a 10-month low. The 6-month annualized rate edged lower to 2.74% (2.76% prior), a 4-month low, with the Y/Y rate ticking down to 2.55% from 2.56%, echoing the Cleveland Fed for the lowest reading since September 2021.
USDCAD TECHS: Pivot Resistance Remains Intact
- 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: 1.2710/3803 20- and 50-day EMA values
- PRICE: 1.3658 @ 16:23 BST Jun 27
- SUP 1: 1.3618 Low Jun 26
- 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
USDCAD has pulled back from its recent highs. The primary downtrend remains intact and short-term gains appear to have been corrective. Key support and the bear trigger has been defined at 1.3540, the Jun 16 low. Clearance of this price point would resume the downtrend. Any reversal higher would instead signal scope for a stronger retracement. Pivot resistance to monitor is at the 50-day EMA, at 1.3803.
