EM ASIA CREDIT: Telecom Argentina: Raising funds in RMB

TYU5 is trading 112-01+, down 0-03 from its close. 

• The US 2-year yield opens around 3.71%, up 0.01 from its close.
• The US 10-year yield opens around 4.267%, up 0.1 from its close.
• Anna Wong on X: “So my takeaway from Powell's speech today is that a September cut is still really down to forecasting the data -- the CPI and the NFP. True, the bias is somewhat in the direction of a cut, but I don't think the sureness in the market pricing accurately reflects the risk.”
• Ben Hunt on X: “Powell explicitly abandoned the idea of *achieving* a 2% inflation rate in this cycle and “reaffirmed” 2% only as a long-term aspirational goal as measured by long-term inflation expectations anchored (whatever that means) at 2%. This is PROFOUNDLY dovish and is ABSOLUTELY a verbal abandonment of the 2% target. For the past 3 years, Powell has said that 2% inflation was not aspirational and not something to get close to, but something to actually achieve. That language is now gone. We will not see 2% in this cycle. This is profoundly dovish.”
• 10-Year Yields held its 4.35% pivot area perfectly and Powell gave the market a reason to add to longs helping yields move lower. While this area continues to hold, bounces should be met with demand. First target the recent lows around 4.18% then the bottom of the range towards 4.10% comes back into focus.
• Data/Events: Building Permits, New Home Sales, Dallas Fed Manf. Activity

On Friday, the standout remained continued outflows from Taiwan equities. Offshore investors sold a further $684mn in local stocks. This bought outflows in the past 5 trading days to over $4bn. It also nearly wipes outs Taiwan's 2025 year to date inflows. Taiwan equities finished last week softer, down 0.82% on Friday, but the US lead is positive to start this week. The SOX rose 2.70% on Friday, while the MSCI IT index gained 1.45%, amid broad based equity market gains in the aftermath of Powell's dovish Jackson Hole speech. This may may stabilize Taiwan market sentiment, with the Taiex struggling to hold above 24000 through the tail end of last week. 

• South Korea inflows were positive on Friday, but this still left a net outflow position for the past 5 trading days. South Korea leader Lee is in the US for a leader's summit with US President Trump at the start of this week.
• The other focus point for tech sensitive plays will be earnings from chip/AI bellwether Nvidia in the US this week.
• In South East Asia, we finally saw an inflow day for Malaysia on Friday, the first since the 24th of July.
• Inflows continued into Indonesia, but Thailand outflow pressures persisted. Outside of Taiwan, Thailand has the weakest flow backdrop for last week within the region. 

Table 1: Asian Markets Net Equity Flows 

Source: Bloomberg Finance L.P/MNI 

Q2 real retail sales were a lot stronger than expected rising 0.5% q/q after 0.8%. This was the fourth consecutive non-negative quarter bringing annual growth to 2.3% y/y from 0.7% and the sector now appears to be recovering. There will be manufacturing, trade and building volumes released before GDP prints on September 18. 

• Nominal retail sales rose 0.1% q/q to be up 2.5% y/y after 1.5% q/q & 1.3% y/y in Q1. Therefore lower prices in the quarter supported real expenditure.
• Statistics NZ reported that 8 out of 15 retail sectors saw an increase in sales in Q2 with electronics, supermarkets and pharmaceuticals driving the rise. Clothing & footwear was the weakest with accommodation, fuel, hardware and food & beverage services also seeing lower sales volumes.

NZ retail sales y/y%