ASIA STOCKS: South Korea & Taiwan See Firm Inflows, Thailand Sees Strong Outflow
Inflows were positive into tech bellwethers South Korea and Taiwan yesterday. This followed generally positive tech sentiment in Tuesday US trade, as Fed easing expectations firmed after the US CPI print. Such sentiment continued in Wednesday trade, although tech equity trends were less positive. For South Korea, yesterday's inflow was the strongest daily inflow since July 24, while for Taiwan it ended a two day run of outflows. Taiwan's Taiex index closed yesterday just short of record highs.
- In South East Asia, outflows of just over $200mn for Thailand were notable yesterday. This was the largest outflow day since the start of June this year. The BoT cut rates yesterday and signaled scope for an additional cut. The SET index closed 1.46% higher. We had seen a strong run of offshore inflows since the start of July (nearly $700mn), so yesterday's outflow may have reflected some profit taking.
- Elsewhere, Indonesian inflow momentum remained strong, with the last 3 days bringing in $280mn in net inflows. Malaysian outflows continued at a consistent pace, bringing to days of consecutive outflows to 14.
Table 1: Asian Markets Net Equity Flows
| Yesterday | Past 5 Trading Days | 2025 To Date | |
| South Korea (USDmn) | 467 | 484 | -4441 |
| Taiwan (USDmn) | 327 | 1553 | 4612 |
| India (USDmn)* | -302 | -1221 | -12441 |
| Indonesia (USDmn) | 92 | 290 | -3465 |
| Thailand (USDmn) | -206 | -212 | -1902 |
| Malaysia (USDmn) | -22 | -173 | -3290 |
| Philippines (USDmn) | 17 | 32 | -596 |
| Total (USDmn) | 373 | 753 | -21522 |
| * Data Up To Aug 12 |
Source: Bloomberg Finance L.P./MNI
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JGBS: Futures Unchanged Overnight, Car Trade With The US In Focus
In post-Tokyo trade, JGB futures closed unchanged compared to settlement levels, after US tsys finished Monday’s session 1-3bps cheaper. Focus is on Tuesday's June CPI inflation data and several Fed speakers ahead of Friday evening's policy blackout.
- (Bloomberg) - "The BOJ's next rate hike shouldn't come until next year, when officials have more information on the state of the economy, according to Japan Securities Dealers Association Chairman Takashi Hibino."
- "President Trump attacked the car trade imbalance between the US and Japan, saying "They sell us millions and millions of cars a year. We sell them no cars because they won't accept our cars." Prime Minister Shigeru Ishiba has said American cars are left-hand drive, large, and fuel inefficient, making them a tough sell in Japan." – BBG
- "Trump indicated he is open to more trade negotiations, including with the European Union: https://blinks.bloomberg.com/news/stories/SZE9AZDWRGG0, even as he insisted that his letters threatening new tariff rates are "the deals" for US trading partners." - BBG
- Today, the local calendar will be empty apart from 5-year Climate Transition supply.
AUSSIE BONDS: Little Changed, Market's Await Today's US CPI Data
ACGBs (YM flat & XM +1.0) are little changed after a relatively subdued start to a potentially volatile week amid myriad drivers, including inflation and sales data, earnings, and Fedspeak.
- US equities opened slightly weaker after news of 30% levies on the EU and Mexico, effective August 1. However, the EU's willingness to talk, coupled with President Trump's openness to negotiation, helped calm concerns.
- (Bloomberg) -- "China's economy appears to have gained momentum in the three months through June. A rebound in exports after the trade-war truce with the US in mid-May has spurred related production and service sectors. Stimulus has also helped."
- Cash ACGBs are little changed with the AU-US 10-year yield differential at -7bps.
- The bills strip slightly weaker.
- RBA-dated OIS pricing is little changed across meetings today. A 25bp rate cut in August is given a 90% probability, with a cumulative 59bps of easing priced by year-end (based on an effective cash rate of 3.84%).
- Today, the local calendar will see Westpac Consumer Confidence.
- The AOFM plans to sell A$300mn of the 4.75% 21 June 2054 bond today followed by A$800mn of the 4.25% 21 March 2036 bond on Wednesday and A$1100mn of the 1.00% 21 November 2031 bond on Friday.
BONDS: NZGBS: Little Changed, US Tsys Focus On Today’s CPI Report
In local morning trade, NZGBs are little changed after US tsys finished Monday’s session 1-3bps cheaper.
- Focus is on Tuesday's June CPI inflation data and several Fed speakers ahead of Friday evening's policy blackout. Consensus sees core CPI inflation at a seasonally adjusted 0.3% M/M in June on a rounded basis, but with a sizeable risk of undershooting at 0.2% (MNI median unrounded estimate at 0.24% M/M /average 0.25%).
- Cleveland Fed President Hammack (non-2025 voter, hawk) reiterated her patient approach to any future policy easing in an interview with Fox Business Monday. Hammack had previously cited a wide range of estimates of neutral rates from 2% to 4.6%.
- Bloomberg - "Jerome Powell made a formal request that the Fed's inspector general review its $2.5 billion building renovation."
- Swap rates are unchanged.
- RBNZ dated OIS pricing is little changed across meetings. 19bps of easing is priced for August, with a cumulative 34bps by November 2025.
- Today, the local calendar will be empty.
- On Thursday, the NZ Treasury plans to sell NZ$200mn of the 4.50% May-30 bond, NZ$200mn of the 4.25% May-36 bond and NZ$50mn of the 1.75% May-41 bond.
