ASIA STOCKS: Taiwan Inflows Surge On TSMC Gains, India Outflows Persist
Surging inflows into Taiwan stocks from offshore investors was the standout EM Asia equity flow from yesterday. The nearly $1.5bn added was the strongest daily inflow since the start of July this year. This came as onshore tech bellwether TSMC surged to fresh record highs. The Taiwan authorities stated chip sales from the company would be exempt from Trump's 100% chip tariff import (presumably as the company has invested in local US manufacturing in Arizona). This brings YTD inflows to just over $4.5bn. The Taiex ended yesterday's session above 24000, fresh highs back to mid last year.
- Elsewhere, South Korea saw modest outflows, leaving a softer trend for the past 5 trading days intact.
- For Wednesday's outflows from India were notably at just over $500mn. The extra tariff hike due to Indian oil imports from Russia is a headwind for local equity market sentiment.
- In South East Asia, Indonesian flows have stabilized somewhat in the past 5 days, while Malaysian momentum remains negative.
Table 1: Asian Markets Net Equity Flows
| Yesterday | Past 5 Trading Days | 2025 To Date | |
| South Korea (USDmn) | -53 | -127 | -4977 |
| Taiwan (USDmn) | 1495 | 2209 | 4554 |
| India (USDmn)* | -502 | -1417 | -11721 |
| Indonesia (USDmn) | 41 | 34 | -3714 |
| Thailand (USDmn) | -9 | 138 | -1700 |
| Malaysia (USDmn) | -69 | -237 | -3186 |
| Philippines (USDmn) | 3 | -2 | -625 |
| Total (USDmn) | 906 | 599 | -21369 |
| * Data Up To Aug 6 |
Source: Bloomberg Finance L.P./MNI
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AUSSIE BONDS: Dec-35 Supply Faces Lower Yield But Same Curve
The Australian Office of Financial Management (AOFM) will today sell A$1200mn of the 4.25% 21 December 2035 bond. The line was last sold on 21 May 2025 for A$1200mn. The line was opened via syndication on 24 July 2024 for A$11.5bn. Bidding is likely to be shaped by several key factors:
- The current outright yield is 5-10bps lower than the previous auction and approximately 40bps lower than the peak in late 2024.
- The 3/10 yield curve is around the same level as the previous auction but sits around 20bps below its recent high.
- On the negative side also, the auction comes amid weaker sentiment toward longer-dated global bonds.
- However, the line is included in the XM basket.
- While some factors may limit the overall strength of bidding, there is an expectation of continued firm pricing at today's auction.
- Results are due at 0200 BST / 1100 AEST.
AUSSIE BONDS: AUCTION PREVIEW: ACGB Dec-35 Supply Due
The Australian Office of Financial Management (AOFM) will today sell A$1200mn of the 4.25% 21 December 2035 bond. The line was last sold on 21 May 2025 for A$1200mn. The line was opened via syndication on 24 July 2024 for A$11.5bn.
- The last sale drew an average yield of 4.4255%, at a high yield of 4.4275% and was covered 3.1042x. There were 39 bidders, 20 of which were successful and 12 were allocated in full. The amount allotted at the highest yield as a percentage of the amount bid at that yield was 34.5%.
- This week's ACGB supply is above the recent average weekly issuance of $1500-2000mn, with A$1000mn of the 2.75% 21 November 2029 bond due on Friday.
- During the first half of 2025-26, the AOFM plans to: issue a new October 2036 Treasury Bond (by syndication and subject to market conditions); conduct 2 Treasury Bond tenders most weeks; hold 1-2 Treasury Indexed Bond tenders each month.
- Issuance of Treasury Bonds (including Green Treasury Bonds) in 2025-26 is expected to be around $150 billion. Issuance of Treasury Indexed Bonds in 2025-26 is expected to be between $2 billion and $3 billion.
- Results are due at 0200 BST / 1100 AEST.
US TSYS: Cash Open
TYU5 is trading 110-28, up 0-03 from its close.
- The US 2-year yield opens around 3.89%.
- The US 10-year yield opens around 4.40%.
- MNI FED: FOMC Minutes: Analysts Eye Discussion Of July Cut, Tariff Inflation. The minutes of the June 17-18 FOMC meeting (released Wednesday Jul 9 at 2pm ET) should underline the Committee's patience in making its next rate move amid heightened tariff-related economic uncertainty, as encapsulated in the meeting's Dot Plot which showed participants largely divided between no cuts and 2 cuts by year-end.
- MNI US TSYS/SUPPLY: Treasury Starts Ramping Up Bill Issuance To Rebuild Cash Pile. Treasury has made its first indication of its cash management plans since last week's $5T increase in the debt limit paved the way for a rebuild in the Treasury General Account: "Treasury plans to increase issuance of Treasury bills to continue financing the government and to gradually rebuild the cash balance over time to a level more consistent with Treasury's cash balance policy."
- The 10-year yield has seen a strong bounce in reaction to the better NFP print. This 4.40% area offers those who would like to express a long the opportunity to fade. A sustained close back above the 4.45% area though would not be great for the bulls and could see more of the longs pared back.
- Data/Events: MBA Mortgage Applications, Wholesale Inventories, FOMC Minutes
