NEW ZEALAND: Consumption Soft But Slowly Recovering

In post-Tokyo trade on Friday, JGB futures were sharply weaker following US payrolls, -50 compared to settlement levels. The local market was closed yesterday for a holiday.

• Overnight, it was another weak session for US tsys, albeit less so than Friday. US yields finished flat to 3bps higher across benchmarks. Volumes were decent (TYH5 over 1.5M contracts despite Japan being out on extended holiday) ahead of this week's PPI and CPI inflation data on Tuesday and Wednesday respectively.
• NY Fed consumer inflation expectations saw a mixed month for December, with the 1Y holding steady at 3.0%, the 3Y jumping 40bps to 3.0% and the 5Y falling 20bps to 2.7%. The 3Y measure is its highest since Nov 2023 and came amidst its highest uncertainty since May.
• Wednesday’s US CPI report headlines the weekly calendar, with Bloomberg Consensus currently looking for a 0.2% M/M print for core CPI in what’s a close call with a 0.3% M/M. Indeed, our initial review of 13 unrounded analyst estimates sees these generally more detailed projections centred around 0.25% M/M for core CPI in December.
• Today, the local calendar will see Current Account Balance, Trade Balance, and Bank Lending alongside 5-year supply. BOJ Deputy Governor Himino will also give a speech in Kanagawa at 1030 JT. 

Taiwan recorded its largest outflow since September as TSMC and Hon Hai saw heavy selling. It wasn't much better across the region with South Korea also recording a large outflow.

• South Korea: Recorded outflows of -$619m yesterday, contributing to a 5-day total of -$33m. YTD flows are positive at +$148m. The 5-day average is -$7m, better than the 20-day average of -$68m and the 100-day average of -$141m.
• Taiwan: Experienced significant outflows of -$1.62b yesterday, resulting in a 5-day total of -$3.16b. YTD flows are negative at -$2.21b. The 5-day average is -$632m, worse than the 20-day average of -$155m and the 100-day average of -$123m.
• India: Posted outflows of -$165m Friday, contributing to a 5-day total of -$1.92b. YTD flows are negative at -$2.13b. The 5-day average is -$383m, worse than the 20-day average of -$181m and the 100-day average of -$47m.
• Indonesia: Registered outflows of -$23m yesterday, with the 5-day total at -$97m. YTD flows are negative at -$205m. The 5-day average is -$19m, slightly better than the 20-day average of -$30m, but worse than the 100-day average of +$6m.
• Thailand: Recorded small inflows of +$3m yesterday, resulting in a 5-day total of -$55m. YTD flows are negative at -$59m. The 5-day average is -$11m, worse than the 20-day average of -$8m and the 100-day average of -$9m.
• Malaysia: Posted outflows of -$72m yesterday, contributing to a 5-day total of -$171m. YTD flows are negative at -$206m. The 5-day average is -$34m, worse than the 20-day average of -$24m and the 100-day average of -$14m.
• Philippines: Recorded outflows of -$12m yesterday, resulting in a 5-day total of -$38m. YTD flows are negative at -$37m. The 5-day average is -$8m, worse than the 20-day average of -$5m but equal to the 100-day average of $0m.

Table 1: EM Asia Equity Flows

G10 FX has extended gains that were evident at the NY/Asia Pac cross over. Lighter liquidity may be in play as we await Asian markets to swing into full gear. Outside of the earlier gradual tariff proposal reportedly being considered by the Trump administration (per BBG), headline drivers have been limited. 

• AUD, NZD, GBP and EUR all sit around 0.30% higher for the session so far. NOK is up by 0.30% as well. AUD/USD is back close to 0.6190/95, NZD near 0.5600. GBP/USD is around 1.2240, EUR.USD back in the 1.0270/75 region.
• USD/JPY is lower but at 157.30/35 is trailing broader G10 gains so far (yen up just 0.10%). Likewise for USD/CAD, last near 1.4360
• USD/CNH is at 7.3400, up around 0.10% in CNH terms. USD/MXN is under 20.65, but hasn't shifted much since the NY close.