GOLD: Rallies Through $3400/oz On Safe Have Demand

 Taiwan has now enjoyed US$5.1bn of inflows in the last eight trading days as the TWD rallies over 5% and the TAIEX up almost 5%. 

• South Korea: Recorded inflows of +$151m as of yesterday, bringing the 5-day total to +$497m. 2025 to date flows are -$11,832m. The 5-day average is +$99m, the 20-day average is -$41m and the 100-day average of -$136m.
• Taiwan: Had inflows of +$572m as of yesterday, with total inflows of +$2,546m over the past 5 days. YTD flows are negative at -$13,294. The 5-day average is +$509m, the 20-day average of +$253m and the 100-day average of -$152m.
• India: Had outflows of -$279m as of the 9th, with total inflows of +$1,044m over the past 5 days.  YTD flows are negative -$10,887m.  The 5-day average is +$209m, the 20-day average of +$226m and the 100-day average of -$125m.
• Indonesia: Had outflows of -$34m as of the 9th, with total outflows of -$198m over the prior five days.  YTD flows are negative -$3,252m.  The 5-day average is -$40m, the 20-day average -$57m and the 100-day average -$37m
• Thailand: Recorded outflows of -$74m as of yesterday, outflows totaling -$45m over the past 5 days. YTD flows are negative at -$1,690m. The 5-day average is -$9m, the 20-day average of -$14m the 100-day average of -$18m.
• Malaysia: Recorded inflows of +$185m as of yesterday, totaling +$305m over the past 5 days. YTD flows are negative at -$2,295m. The 5-day average is +$61m, the 20-day average of +$24m and the 100-day average of -$27m.
• Philippines: Saw inflows of $1m as of yesterday, with net inflows of +$34m over the past 5 days. YTD flows are negative at -$219m. The 5-day average is +$7m, the 20-day average of +$4m the 100-day average of -$3m.

The Aud continues to outperform in the crosses as it reaps the benefits of being a China-proxy. This morning risk is opening up relatively flat in Asia after US stocks extended their gains overnight. 

• EUR/AUD - Overnight range 1.7254 - 1.7356, Asia is trading around 1.7290. AUD continues to outperform in the crosses in this environment but expect decent support back towards the 1.7000 area.
• GBP/AUD - Overnight range 2.0512 - 2.0635, Asia is trading around 2.0565. A break back above 2.0800 is needed to signal a base is potentially in and the uptrend is set to resume, a sustained break back below 2.0500 though and we could see further unwinding of longs.
• AUD/JPY - Overnight range 94.67 - 95.57, Asia is trading around 95.45. AUD/JPY was seen as the best expression of risk-off and the conviction of the shorts is being challenged. The 96.00 area remains decent resistance, support is now back towards 94.00.

• AUD/NZD -  Overnight range 1.0870 - 1.0906, the cross is dealing in Asia around 1.0890. The Cross has finally found some supply towards 1.0900, support is seen back towards 1.0800 and a sustained break above 1.0900 would turn the focus higher.

  Fig 1: GBP/AUD spot Hourly Chart

  

  Source: MNI - Market News/Bloomberg

Japan's April PPI was close to market expectations. The print was 0.2%m/m (forecasts were 0.2%, while prior was 0.4%). In y/y terms we rose 4.0%, in line with market forecasts but down from a revised 4.3% gain in March. 

• At face value, this doesn't change the broader headline CPI backdrop. The chart below plots the headline PPI measure against headline CPI, both in y/y terms. Still elevated, but slightly off recent highs.
• In terms of the detail, the manufacturing PPI was down -0.2%m/m, while some commodity related m/m down, particularly for metals. Some offset came from agriculture, up 3.4%, while utilities were also higher.
• Import prices were down 2.9%ym/m in JPY terms for all commodities. In y/y terms this is -7.2%.

Fig 1: Japan PPI Versus CPI - Y/Y

Source: MNI - Market News/Bloomberg