ASIA STOCKS: South Korea Records Best Inflow Day Since Mid 2024, As Kospi Surges
Friday delivered strong inflows for both South Korea and Taiwan. South Korea saw over $1.1bn in net inflows, which was the strongest inflow day since mid-June last year. It also bought the 5-day sum of net inflows to over $3bn. The Kospi has surged to fresh record highs, pushing through the 3400 level in the first part of trade today. Onshore media is reporting that the government won't go through with plans to lower the threshold for stock capital gains (with original plans being this would be lowered to 1bn won form the current 5bn won). Such a step was suggested by President Lee last week, so today's outcome is unlikely to surprise the market much.
- For Taiwan, the 5-day sum of net inflows remained very elevated last week at +$5.6bn. Broader tech sentiment rallied last week, while the onshore Taiex index is just off record highs. Chip/AI demand sentiment remains firm.
- Elsewhere, outflow momentum from Indonesia slowed to nearly flat on Friday. Still, we had decent outflows the week of just over $400mn. This week we have the BI decision, where no change is expected. It will be a focus point though given the new FinMin has a strong pro-growth stance.
- The see-saw nature of Indian flows continued, while other markets saw little net aggregate shifts in terms of flows.
Table 1: Asian Markets Net Equity Flows
| Yesterday | Past 5 Trading Days | 2025 To Date | |
| South Korea (USDmn) | 1165 | 3034 | -2299 |
| Taiwan (USDmn) | 910 | 5606 | 7405 |
| India (USDmn)* | -387 | 188 | -15524 |
| Indonesia (USDmn) | -2 | -401 | -3728 |
| Thailand (USDmn) | -24 | -66 | -2552 |
| Malaysia (USDmn)* | 25 | -2 | -3808 |
| Philippines (USDmn) | 5 | -3 | -727 |
| Total (USDmn) | 1693 | 8357 | -21233 |
| * Data Up To Sep 11 |
Source: Bloomberg Finance L.P./MNI
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AUSSIE 10-YEAR TECHS: (U5) Follows Fade in Treasuries
- RES 3: 96.501 - 76.4% of the Mar 14 - Nov 1 ‘23 bear leg
- RES 2: 96.207 - 61.8% of the Mar 14 - Nov 1 ‘23 bear leg
- RES 1: 95.960 - High Apr 7
- PRICE: 95.710 @ 15:17 BST Aug 15
- SUP 1: 95.415/95.300 - Low May 15 / Low Jan 14
- SUP 2: 95.275 - Low Nov 14 (cont) and a key support
- SUP 3: 94.707 - 1.0% 10-dma envelope
Aussie 10-yr futures received a boost from the US Treasury rally that followed both the recent poor NFP print as well as Tuesday’s inflation number. While this impact faded into the close of the week, 10-year futures remain toward the top end of the recent range. To the upside, next resistance is at 96.207, a Fibonacci retracement point. Next support undercuts at 95.420 (pierced), the Feb 13 low, ahead of 95.275, the Nov 14 low and a key support. Clearance of this level would strengthen a bearish condition.
FOREX: USD Index Pinned to 50-dma as Putin Shakes Hands with Trump
- USD slipped against all others Friday, with a poor set of retail sales and Uni of Michigan sentiment numbers meeting a higher-than-expected import price index to further stimulate concerns over a stagflarionary phase in the US economy. The USD Index trades either side of the 50-dma which, notably, has begun to flatten out after maintaining a solid downtrend throughout 2025.
- JPY is the strongest currency in G10, extending the breakout and bearish conclusion of the consolidation phase in USD/JPY. Recent weakness puts the price through support drawn off the early August lows as well as 146.71, a key retracement. Price action this week marks a full reversal of the previously overbought condition, keeping the downside argument in focus.
- Anticipation ahead of the Putin-Trump meeting has reached fever pitch. Footage showing the Presidents shaking hands in Alaska has helped ease concerns over a hostile meeting, but it's the outcomes that will matter to markets - particularly as equities hold at alltime highs. Any signs of progress toward a ceasefire would be warmly received by risk sentiment - although both Trump and Putin cautioned against a optimistic outcome in comments to press.
- We noted earlier in the week the pressure building on USD/HKD, with price action not matching the pattern of HKMA intervention. That move extended overnight, and is still building at typing, putting spot down to new pullback lows of 7.8119 shortly after the European open. Overnight swap rates have surged further still Friday (hitting 1.7% at typing), well ahead of the 0.3% prevailing rate mid-week and should continue to support a recovery in HIBOR fixes ahead. Today's 1m HIBOR fixed higher by 41bps, hitting 1.45% for the highest fix since mid-May. It's these factors that should work against the HKD carry trade (selling HKD, buying USD), evident in the further tightening of the HKD forward discount today: down 975 points from as high as 1270 this month.
- Focus in the coming week shifts to Jackson Hole and Powell's comments on Friday. With the September meeting still in flux - any conviction toward tipping the board toward a rate cut at the next FOMC will be carefully watched, but it's a hawkish outturn that could be more consequential for markets, as OIS prices a near 90% chance of easing on September 17th.
MNI: US TSY TICS NET FLOWS IN JUN +$77.8B
- MNI: US TSY TICS NET FLOWS IN JUN +$77.8B
- US TSY TICS NET L-T FLOWS IN JUN +$150.8B
