ASIA STOCKS: South Korea & Taiwan See Modest Outflows, Malaysian Inflows Firmer
Yesterday saw modest outflow pressures from both South Korea and Taiwan. This followed a generally strong period of prior inflow momentum, so some slowing was not surprising, particularly given the Fed risks due later on Wednesday. For Wednesday trade, both onshore equity markets also pulled back from recent highs. The overnight tone was softer US equity trends, including in the tech space, but losses were modest. US futures are also up in early dealings today, led by the tech side. In early Thursday dealings the Kospi is up around 0.50%. Both the South Korean and Taiwan markets return solid 5-day rolling sum momentum.
- Elsewhere, India enjoyed better inflow momentum on Tuesday, helping drive a better 5-day sum backdrop. Part of the focus will remain on US-India trade talks and whether warm ties between PM Modi and US President Trump can help lower tensions.
- Indonesia saw modest outflows yesterday, despite the JCI moving higher (above 8000) in the aftermath of the surprise BI cut.
- Malaysian markets returned and with local markets rising, we saw some catch up from a offshore flow standpoint.
Table 1: Asian Markets Net Equity Flows
| Yesterday | Past 5 Trading Days | 2025 To Date | |
| South Korea (USDmn) | -144 | 2481 | -1151 |
| Taiwan (USDmn) | -45 | 3066 | 8368 |
| India (USDmn)* | 187 | 388 | -15260 |
| Indonesia (USDmn) | -9 | 18 | -3696 |
| Thailand (USDmn) | -6 | 65 | -2510 |
| Malaysia (USDmn) | 83 | 164 | -3669 |
| Philippines (USDmn) | 12 | 11 | -724 |
| Total (USDmn) | 79 | 6193 | -18642 |
| * Data Up To Sep 16 |
Source: Bloomberg Finance L.P./MNI
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POLITICAL RISK: Ukraine/Russia To Decide On Territory Issues
Ukrainian President Zelenskyy and key EU leaders have hailed the meetings with US President Trump as a success and positive progress towards ending the Russia-Ukraine conflict. Still, a degree caution remains and seemingly many details still need to fall into place.
- The first is a meeting between Zelenskyy and Putin has to take place. No exact timeframe was given, but a number of officials suggested the aim was to have a meeting in the next 2-3 weeks between the two leaders. It is expected that a trilateral meeting including US President Trump would then take place after this.
- A focus point for the Zelenskyy/Putin meeting would be on territory claims falling out from any peace deal. A headline crossed via Rtrs: "UKRAINE'S PRESIDENT SAYS TERRITORIAL ISSUES WILL BE DECIDED BETWEEN RUSSIA AND UKRAINE - [RTRS]".
- This comes after earlier reports of Russia reportedly offering to hold its frontlines in Kherson and Zaporizhzhia in exchange for the Donbas, not all of which it currently occupies.
- The other focus point will be on security guarantees for Ukraine. This headline crossed earlier: "*RUTTE: WE'RE DISCUSSING ARTICLE 5 TYPE OF SECURITY GUARANTEES" (via BBG).
- Still, but Rutte (the NATO Secretary General) and French President Macron stated details on security guarantees need to be worked on/out with the US. Trump said that they will principally be provided by Europe but the US will also be “involved” and that “we’ll give them good protection”.
- Macron added that if Putin doesn't attend a meeting then more pressure will be needed on Russia. He also expressed pessimism on whether Putin actually wants a peace deal.
- Zelenskyy also agreed with Trump to buy $100bn of US weaponry and to a $50bn US-Ukraine drone manufacturing venture. The funding is likely to come from Europe.
US STOCKS: Tread Water Ahead Of Jackson Hole
The ESU5 overnight range was 6456.00 - 6479.75, Asia is currently trading around 6470. The ESU5 contract traded sideways consolidating just above 6450, as the market awaits Powell's Jackson Hole speech. This morning US futures opened a fraction higher, ESU5 +0.05%, NQU5 +0.05%. Only a break below 6200 would potentially signal a deeper correction. For now the price action in stocks continues to be bullish ignoring all headwinds as the Trump Administration runs the economy hot which for the moment has superseded the seasonal volatility that normally characterises the August/September period.
- Wei Li(CIS BlackRock) on LinkedIn - "Quiet.. so quiet. With equity rate and currency vols at lows this year, and heading into seasonally choppy September and October, derivatives overlay strategy should be looked at. Especially if already long risk and not ready to call end."
- The Market Ear on X: “QQQ 1-month implied vol just hit a YTD low and is nearing multi-year lows. We see immense value in owning hedges through the rest of summer. Do not underestimate the VVIX.” See Fig.1 Below.
- Lance Roberts on X: “Two things can be true at the same time - bullish fundamentals and stretched markets.”
- Daily Chartbook on X: "FedEx’s stock price is a leading indicator of global trade." - Apollo Sløk. See Fig.2 Below.
Fig.1: VIX Vs VVIX
Source: MNI - Market News/@themarketear
Fig.2: FedEx Vs World Trade Volume
Source: MNI - Market News/@dailychartbook/Apollo
RBNZ: MNI RBNZ Preview-August 2025: Rate Cut, Focus On OCR Path
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- The RBNZ meets on Wednesday August 30 and is likely to cut rates 25bp to 3.0%, the mid-point of its estimated "neutral" range. While it paused at the July meeting, it was with a clear easing bias.
- With the cut widely forecast, attention will be on the revised RBNZ outlook and tone of the statement and press conference. The focus is likely to be on the projected OCR path and whether it is revised lower suggesting further easing towards stimulatory territory as excess capacity persists.
- With the focus on the medium-term, the 2026 and beyond inflation forecasts will be the important ones and should remain around the 2% band mid-point.
- RBNZ-dated OIS pricing is slightly firmer across meetings with 23bps of easing priced for tomorrow’s meeting, with a cumulative 41bps by November 2025.
