EM ASIA CREDIT: RHB Bank: Ratings affirmed
(RHBCMK, A3/NR/NR)
"*MOODY'S RATINGS AFFIRMS RHB BANK'S A3 RATINGS; OUTLOOK STABLE" - BBG
Moody’s overnight affirmed RHB Bank’s ratings, acknowledging the bank’s strong solvency while noting a weaker funding profile due to increased reliance on market funding. However, sufficient liquidity mitigates refinancing risk. The stable outlook faces downside risks from US tariffs affecting Malaysia and the regional economy, which could slow growth and weaken RHB’s operating environment. Malaysia’s GDP growth is expected by Moody's to moderate to 4.4% in 2025 from 5.1% previously, but RHB’s limited direct exposure to US exporters should contain the direct tariff impact.
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BONDS: NZGBS: Cheaper After RBNZ’s Decision To Leave OCR Unchanged
NZGBs are 2-4bps cheaper after the RBNZ left the cash rate unchanged at 3.25%. The decision was widely expected by the market, with only 4bps of tightening priced in.
- From the RBNZ: "The case for lowering the OCR at this meeting highlighted weak near-term growth momentum and the risk of prolonged weakness in economic activity from excess caution by households and businesses in the face of economic uncertainty. This could lead to downward pressure on medium-term inflation. Some members emphasised that further monetary easing in July would provide a guardrail to ensure the recovery of economic activity, whilst being consistent with price stability.”
- “The case for keeping the OCR on hold at this meeting highlighted the elevated level of uncertainty, and the benefits of waiting until August in light of near-term inflation risks. Some members emphasised that waiting would allow the Committee to assess whether weakness in the domestic economy persists, and how inflation and inflation expectations evolve. It would also allow more time to observe developments in the global economy.”
- Swap rates are 6-7bps higher on the day, 4-5bps higher after the decision.
- RBNZ dated OIS pricing is flat to 4bps firmer across meetings. A cumulative 31bps by November 2025 remains priced.
ASIA STOCKS: Decent Day of Inflows as Tariff Headlines Dominate
Ahead of a Potentially Volatile Period as the tariff deadline approaches, inflows returned yesterday.
- South Korea: Recorded inflows of +$206m yesterday, bringing the 5-day total to +$285m. 2025 to date flows are -$8,977. The 5-day average is +$57m, the 20-day average is -$35m and the 100-day average of -$75m.
- Taiwan: Had inflows of +$35m yesterday, with total inflows of +$1,054 m over the past 5 days. YTD flows are negative at -$3,190. The 5-day average is +$211m, the 20-day average of +$397m and the 100-day average of -$7m.
- India: Had inflows of +$323m as of the 7th, with total inflows of +$141m over the past 5 days. YTD flows are negative -$8,014m. The 5-day average is +$28m, the 20-day average of +$126m and the 100-day average of +$8m.
- Indonesia: Had outflows of -$60m yesterday, with total outflows of -$203m over the prior five days. YTD flows are negative -$3,483m. The 5-day average is -$41m, the 20-day average -$23m and the 100-day average -$33m.
- Thailand: Recorded inflows of +$5m yesterday, with outflows totaling -$73m over the past 5 days. YTD flows are negative at -$2,433m. The 5-day average is -$15m, the 20-day average of -$15m and the 100-day average of -$21m.
- Malaysia: Recorded outflows as of -$2m yesterday, totaling -$36m over the past 5 days. YTD flows are negative at -$2,738m. The 5-day average is -$7m, the 20-day average of -$11m and the 100-day average of -$20m.
- Philippines: Recorded outflows of -$3m yesterday, with net inflows of +$28m over the past 5 days. YTD flows are negative at -$549m. The 5-day average is +$6m, the 20-day average of -$2m the 100-day average of -$5m.
RBNZ: Rates On Hold As Expected
The RBNZ kept rates on hold as expected, leaving the policy rate at 3.25%. This was widely expected and largely priced by financial markets. More details to follow.
