PHP: USD/PHP Back Above 59.00, As BSP Gov States Another Cut Could Eventuate
USD/PHP is trading with a positive bias in the first part of Friday trade, last near 59.125. We got to earlier lows of 58.96, but BSP Governor Remolona left the door ajar for another rate cut in remarks (via BBG TV), which has weighed on PHP sentiment. Still, recent ranges continue to hold, with recent moves above 59.20 still drawing selling interest. Remolona remarked than the FX markets had reacted hawkish to yesterday's BSP cut, so today's remarks may have been designed to still signal that another rate cut could be delivered. Remolona stated they are now on the fence but if they move off it will be for a rate cut.
- Remolona also stated the authorities had been intervening in the FX markets, but only modestly, and not defend a particular FX level. Still, there looks to be reasonable resistance in the pair on moves above 59.20 for now, since late Oct.
- Growth, or lack thereof, will be the deciding factor on whether BSP eases again. Remolona noting that Q4 was tracking weaker than thought.
- USD/PHP remains above its 20-day EMA last near 58.92, while the 50-day EMA is near 58.61, with the early Dec break sub this level not sustained.
- We still await to see if PHP receives any seasonal support before year end. Still, until the growth backdrop looks firmer offshore investors may be cautious on the Peso. The 2025 growth consensus forecast rests at 4.9%, down from 5.5% at the start of Nov, while 2026 is seen at 5.3% (versus the 5.7% projection from early Nov).
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ASIA STOCKS: Taiwan Outflows Persist, Can Malaysian Inflows Pick Up Further?
Yesterday saw more outflow pressures than inflows for the EM Asia Pac region. Taiwan net outflows continued, with the past 5 days now seeing outflows of more than $4bn. Trends in local stocks reflect a buy on dips mentality, although the TWSE hasn't been able to sustain moves back above 28000 at this stage (which marked recent cycle highs at the start of the month). Taiwan will soon be back at YTD outflows if current trends persist. For South Korea we did see modest inflows yesterday, but it is too early to say if this is the start of a turnaround. Indeed early trends today, per the BBG NBUY function, are for offshore net selling (over $200mn). We did see US tech related equity trends falter in Tuesday trade, although the Kospi is still up close to 1% so far in Wednesday trade. US equity futures are also higher.
- Elsewhere, the recent see-saw pattern in Indian flows continued, with the 5-day sum back close to flat. Onshore equity sentiment looks more positive, although we are still a little distance from late Oct highs above 26k for the Nifty. Focus remains on any US-India trade deal announcement.
- In South East Asia, positive Indonesia inflow momentum slowed somewhat. Malaysia saw positive trends yesterday and with the Malaysian Prime Minister upbeat on local growth prospects, we could see firmer trends for local stocks. Note in the past trading month we have seen over $350mn in net outflows, so there is ample scope for a pick up in the period ahead.
Table 1: Asian Markets Net Equity Flows
| Yesterday | Past 5 Trading Days | 2025 To Date | |
| South Korea (USDmn) | 64 | -3424 | -1697 |
| Taiwan (USDmn) | -516 | -4199 | 497 |
| India (USDmn)* | -568 | -76 | -16456 |
| Indonesia (USDmn) | -39 | 113 | -2332 |
| Thailand (USDmn) | -75 | -140 | -3164 |
| Malaysia (USDmn) | 48 | 54 | -4179 |
| Philippines (USDmn) | 12 | 108 | -661 |
| Total (USDmn) | -1074 | -7566 | -27991 |
| * Data Up To Nov 10 |
Source: Bloomberg Finance L.P./MNI
AUSSIE BONDS: AU-US10Y Diff Narrower Tempting Ahead Of Jobs Report?
Cash ACGBs are 1-2bps richer today with the AU-US 10-year yield differential at +29bps.
- At this level, investors may be tempted to position for a narrowing in the differential, as it sits near the top of its well-defined ±30bps trading range (see chart).
- Alas, such positions would take on notable risk going into tomorrow's October jobs data.
- However, such trades carry meaningful risk ahead of tomorrow’s October employment data. The unemployment rate rose 0.2pp to 4.5% in September.
- The unemployment rate is widely expected to normalise somewhat at 4.4% but there are a few economists who expect it to stay at 4.5% or fall back to 4.3%.
- Last month’s weaker-than-expected jobs report sparked a strong ACGB rally, which was later more than unwound following the much hotter Q3 CPI print.
Bloomberg Finance LP
CHINA PRESS: New Energy Car Sales Exceed Half Of Total Car Sales
The production and sales of new energy vehicles in October reached 1.77 million and 1.72 million units, representing year-on-year increases of 21.1% and 20.0%, China Securities Journal reported citing data by China Association of Automobile Manufacturers. New energy vehicles accounted for 51.6% of total new car sales, marking the first time their market share has exceeded 50%, the newspaper said. Automobile production and sales are both expected to hit a record high of exceeding 34 million units this year, largely stimulated by the trade-in policy, the Journal said citing Chen Shihua, deputy secretary-general of CAAM.
