ASIA STOCKS: Tech Related Inflows Rebound, Thailand Sees Outflows
Inflow momentum turned positive once again for South Korean and Taiwan markets yesterday. Taiwan was the best performer, as its onshore equity market closed at a fresh record high (up +1.30%). Tech/AI sentiment remains buoyant, with the SOX index up a further 3.60% in Thursday US trade. Via BBG: "Information technology was the best-performing sector, with Intel notching its best day since 1987 as Nvidia announced a $5 billion investment and said the two will co-develop chips for PCs and data centers." Positive spill over to Taiwan stocks today may aid further inflow momentum. Sep to date inflows are now at +$8.7bn, which is a fresh cycle high.
- For South Korea, such trends should also aid the inflow backdrop, although it can have a lower beta compared to Taiwan with respect to such moves.
- Elsewhere, India saw modest outflows on Wednesday, leaving the 5-day sum of net inflows in negative territory.
- Yesterday saw notable outflows from Thailand. At just over $100mn this was the largest net outflow day since end of August. The local equity index fell yesterday, the SET back under 1300. The new government is looking to step up efforts to curb FX outperformance and it is mindful around further portfolio inflow risks (from an FX standpoint).
- Indonesia saw modest outflows, while the 5-day sum was close to flat.
Table 1: Asian Markets Net Equity Flows
| Yesterday | Past 5 Trading Days | 2025 To Date | |
| South Korea (USDmn) | 244 | 2556 | -907 |
| Taiwan (USDmn) | 473 | 2347 | 8841 |
| India (USDmn)* | -32 | -154 | -15292 |
| Indonesia (USDmn) | -22 | 8 | -3718 |
| Thailand (USDmn) | -101 | -83 | -2611 |
| Malaysia (USDmn) | -15 | 124 | -3669 |
| Philippines (USDmn) | -1 | 7 | -725 |
| Total (USDmn) | 547 | 4806 | -18080 |
| * Data Up To Sep 17 |
Source: Bloomberg Finance L.P./MNI
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US TSYS: Cash Open
TYU5 is trading 111-23+, down 0-01 from its close.
- The US 2-year yield opens around 3.75%.
- The US 10-year yield opens around 4.308%.
- (Bloomberg) - “Bloomberg Economics expects Federal Reserve Jerome Powell to unveil changes to the central bank's monetary policy framework, including axing flexible average inflation targeting (FAIT) and returning to a balanced 2% target.”
- “If the Fed re-weights its dual mandate in the revised framework, that could reset the bar for future rate cuts, and markets may be too confident about a rate cut at the September FOMC meeting.”
- Yields are still firmly within its wider 4.10%-4.65% range. The 4.35% pivot area in 10-Year yields found solid demand overnight helped by the S&P rating, the market will now be waiting for any clues from Powell's upcoming Jackson Hole speech.
- Data/Events: MBA Mortgage Applications, FOMC Meeting Minutes
JAPAN DATA: Core Machine Orders Above Forecasts, Suggesting Resilient Capex
Japan June core machine orders were better than forecast. We rose 3.0%m/m, versus -0.5% forecast and -0.6% prior. The y/y print was 7.6%, against a 4.7% forecast and 4.4% prior. The chart below overlays y/y core machine orders (the white line on the chart) against capex for Japan in y/y terms (ex Software). Today's machine orders print continues to paint a resilient capex picture for Japan's economy.
- We don't get the full capex read for Q2 until the start of Sep. Still, the recent Q2 GDP print (preliminary) showed business up 1.3% in Q2, which was above forecasts (+0.7%). So today's core machine orders result is consistent with that backdrop.
Fig 1: Japan Core Machine Orders & Capex Y/Y (Ex Software)
Source: Bloomberg Finance L.P./MNI
GOLD: Gold Continues Range Trading
Gold fell 0.5% to $3315.78/oz on Tuesday, close to the intraday low, as markets position themselves ahead of Fed Powell’s speech on Friday. Not a quite full 25bp Fed Funds cut is priced for September 17 and this appearance will be watched closely for the Chair’s thinking on the immediate policy outlook. Meanwhile, President Trump continues to put pressure on Powell. The US dollar was stronger with the BBDXY up 0.15% but Treasury yields slightly lower. Bullion has started today around $3314.7.
- Gold continues to range trade between support at $3268.2, 30 July low, and resistance at $3409.2, 8 August high, but appears to be corrective. However, moving average studies continue to signal that the metal remains in a bull mode.
- Silver underperformed dropping 1.7% to $37.393 after a low of $37.280. It had reached $38.149 before the decline. It is currently around $37.370. Technicals continue to signal that silver is in an uptrend. A clear break of the 50-day EMA at $37.077 is needed to strengthen the short-term bearish threat. Initial resistance is at $39.655.
- Equities were mixed with the S&P down 0.6% but Euro stoxx up 0.9%. The S&P e-mini is so far slightly lower today. Oil prices continued falling with WTI -1.4% to $62.51/bbl. Copper is down 0.9%.
