TWD: Spot USD/TWD Holding Close To Recent Highs, Despite Equity Inflows
Jul-18 03:38
Spot USD/YWD is little changed in the first part of Friday change. The pair last near 29.40, which keeps us close to recent highs (29.45) and above the 20-day EMA support point (close to 29.33).
- Broader USD gains have helped stabilize USD/TWD in recent weeks, while focus also remains on negative TWD seasonality amidst the dividend outflow period.
- USD/TWD has risen in 6 out of the last 7 July's, although we are currently tracking modestly lower versus end June levels for 2025 (albeit the pair is up from earlier July lows). August also tends to see USD/TWD rise, but is only up in 3 out of the last 5 August months.
- Fundamentals from an equity flow standpoint remain strong, with cumulative 2025 net foreign selling almost back to flat, see the chart below. At the April trough we had seen around $20bn in outflows. Optimism around tech/AI post yesterday's TSMC results is likely to continue to aid the inflow backdrop.
- To the extent chip demand remains firm, it could also see Taiwan exports remain resilient.
- In terms of upside focus points for USD/TWD, the 50-day EMA is at 29.85, while earlier July lows were close to 28.80.
Fig 1: Cumulative Year To Date Net Equity Flows Almost Back To Flat
Source: Bloomberg Finance L.P./ MNI
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ASIA STOCKS: Outflows Continue, Taiwan the Exception
Jun-18 03:32
After a strong period of inflows, recent days have seen outflows beginning whilst Taiwan enjoyed a sizeable inflow yesterday.
- South Korea: Recorded outflows of -$59m yesterday, bringing the 5-day total to +$286m. 2025 to date flows are -$7,987. The 5-day average is +$57m, the 20-day average is +$169m and the 100-day average of -$80m.
- Taiwan: Had inflows of +$298m as of yesterday, with total inflows of +$1107 m over the past 5 days. YTD flows are negative at -$10,104. The 5-day average is +$203m, the 20-day average of +$74m and the 100-day average of -$95m.
- India: Had outflows of -$308m as of the 16th, with total outflows of -$390m over the past 5 days. YTD flows are negative -$10,928m. The 5-day average is -$78m, the 20-day average of -$91m and the 100-day average of -$83m.
- Indonesia: Had inflows of +$16m yesterday, with total inflows of +$24m over the prior five days. YTD flows are negative -$2,927m. The 5-day average is +$5m, the 20-day average +$8m and the 100-day average -$29m.
- Thailand: Recorded outflows of -$19m as of yesterday, with outflows totaling -$147m over the past 5 days. YTD flows are negative at -$2,275m. The 5-day average is -$29m, the 20-day average of -$26m and the 100-day average of -$21m.
- Malaysia: Recorded outflows of -$12m as of yesterday, totaling -$121m over the past 5 days. YTD flows are negative at -$3,663m. The 5-day average is -$31m, the 20-day average of -$29m and the 100-day average of -$23m.
- Philippines: Saw no flows yesterday, with net outflows of -$47m over the past 5 days. YTD flows are negative at -$564m. The 5-day average is -$10m, the 20-day average of -$17m the 100-day average of -$5m.
CHINA: Bond Futures Trend Lower
Jun-18 03:21
- China's bond futures are trending lower today as the major equity bourses struggle.
- The 10YR bond future is down -0.03 at 109.11 and remains above the 20-day EMA of 108.92.
- The 2YR bond future is down -0.005 at 102.53 and is near the mid-point between the 100-day EMA of 102.62 and the 50-day EMA of 102.50.
- The 10YR CGB is stable at 1.69%
FOREX: JPY Crosses - Fail To Extend Their Attempts To Break Higher
Jun-18 03:13
With the odds of the US becoming involved in the war against Iran increasing everyday, the upward momentum of US equities seem to be stalling. ESU5 -0.48%, NQU5 -0.52%. With positioning extreme, USD/JPY has uncharacteristically remained better bid. The JPY has fared better in the crosses as the move higher in many of them stall.
- EUR/JPY - Overnight range 166.71 - 167.61, Asia is trading around 166.90. The move higher ran into some supply around the 167.50 area overnight, stalling its upward momentum. Dips look likely to remain supported for now, with first support seen back towards the 165/66 area.
- GBP/JPY - Overnight range 194.92 - 196.62, Asia trades around 195.00. GBP/JPY had a failed break above the multiple tops around 196.50, it is trading back within its 192.00 - 196.50 range support seen initially toward 194.00.
- NZD/JPY - Overnight range 87.29 - 87.99, Asia is currently dealing 87.45. NZD/JPY failed to break back above 88.00 overnight, a sustained break is needed above here for the market to turn its focus back to the 90.00 area.
- CNH/JPY - Overnight range 20.1063 - 20.2278, Asia is currently trading around 20.1950. CNY/JPY trades sideways for now in a 19.70 - 20.30 range.
Fig 1 : GBP/JPY Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
