AUSSIE BONDS: Unchanged On A Subdued Data-Light Day
ACGBs (YM flat & XM flat) are little changed on a local data-light session.
- Vacancies in the 3-months to May (Q2) rose 2.9% q/q resulting in an improvement in the annual rate to -2.8% from -9.2% in Q1. The ratio to unemployment rose 1.3pp to 54.8%, in line with the four quarter average. It fell consistently for two years from Q3 2022 after reaching an unusual 92.5% but the vacancy environment now appears to have stabilised.
- According to MNI’s technicals team, Aussie 3-yr futures rallied off lower levels on the recent RBA rate cut and guidance, however prices remain south of the 50-dma for now. The recent strength is again challenging resistance at 96.730, the Sep 17 ‘24 high, leaving 96.860 as the next key level. Instead, a continuation lower would strengthen a bearish theme. This would refocus attention on 95.760, the 14 Nov ‘24 low. Conversely, a reversal higher would refocus attention on 96.860, the Apr 7 high.
- Cash US tsys are 2-3bps richer in today's Asia-Pac session.
- Cash ACGBs are unchanged with the AU-US 10-year yield differential at -15bps.
- The bills strip is little changed.
- RBA-dated OIS pricing is little changed across meetings today. A 25bp rate cut in July is given a 94% probability, with a cumulative 82bps of easing priced by year-end.
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ASIA STOCKS: Big Inflows for Taiwan
After last week’s slow week, this week has started off on a positive note with strong inflows into Taiwan and South Korea.
- South Korea: Recorded inflows of +$135m yesterday, bringing the 5-day total to -$3m. 2025 to date flows are -$11,470. The 5-day average is -$1m, the 20-day average is +$79m and the 100-day average of -$115m.
- Taiwan: Had inflows of +$426m as of yesterday, with total inflows of +$1,571m over the past 5 days. YTD flows are negative at -$10,020. The 5-day average is +$314m, the 20-day average of +$441m and the 100-day average of -$104m.
- India: Had inflows of +$69m as of the 23rd, with total outflows of -$1,365m over the past 5 days. YTD flows are negative -$10,578m. The 5-day average is -$273m, the 20-day average of +$175m and the 100-day average of -$119m.
- Indonesia: Had inflows of +$20m as of yesterday, with total inflows of +$128m over the prior five days. YTD flows are negative -$2,797m. The 5-day average is +$26m, the 20-day average +$12m and the 100-day average -$32m.
- Thailand: Recorded outflows of +$35m as of yesterday, inflows totaling +$100m over the past 5 days. YTD flows are negative at -$1,652m. The 5-day average is +$20m, the 20-day average of -$4m and the 100-day average of -$17m.
- Malaysia: Recorded outflows of -$15m as of yesterday, totaling -$106m over the past 5 days. YTD flows are negative at -$3,198m. The 5-day average is -$22m, the 20-day average of +$31m and the 100-day average of -$22m.
- Philippines: Saw no flows yesterday, with net outflows of -$28m over the past 5 days. YTD flows are negative at -$256m. The 5-day average is -$6m, the 20-day average of +$2m the 100-day average of -$3m.
CHINA PRESS: Authorities Can Prioritise Capital Market To Boost Consumption
Authorities should boost consumption by prioritising resident’s capital market income given the limited potential for increasing wealth through real estate and wealth management products, according to Lian Ping, chief economist at Guangkai Industry Research Institute. In the current macroeconomic environment, wage growth and business income are unlikely to provide significant short- to medium-term support for consumption, Lian said, noting improvements to pensions and social security have only a stabilising effect.
CHINA PRESS: Moody's Unchanged Rating A Positive Reflection Of Chinese Economy
China's Ministry of Finance said Moody's decision to maintain the country's rating and outlook unchanged reflected China's positive economic prospects, Shanghai Securities News reported. New and existing policies will combine to support the nation’s high-quality economic development, following a strong start to the year, a statement on the ministry's website noted.
