JGBS: Futures Slightly Stronger Overnight, Light Local Calendar

In post-Tokyo trade, JGB futures closed unchanged compared to settlement levels. 

• Labor & Real Cash Earnings for December have printed at +4.8% y/y and +0.6% y/y respectively versus estimates of +3.7% and -0.1% and priors of +3.0% and -0.3%. Cash Earnings - Same Sample Base printed +5.2% y/y versus +3.6% est. and +3.5% prior. This data should put pressure on the JGB market in early trading rounds.  
• Overnight, US tsys see-sawed off early session yield highs to finish near the bottom end of the session range as concerns over the Trump administration's trade policies moderated, notwithstanding China’s tariff tit-for-tat.
• US tsys richened after JOLTS data, job openings were lower than expected in Dec at 7.6m (cons 8.00m) after an upward revised 8.156m (initial 8.098m) in Nov. Focus turns to Wednesday morning's ADP private employment data.
• Focus in the US turns to Wednesday's ADP private employment data ahead of Friday's headline NFP data for January, not to mention the US Tsy quarterly refunding announcement, S&P Global US Services PMI and ISM Services data.
• The local calendar will also see Jibun Bank Composite & Services PMIs today. 

Mixed flows on Tuesday, with South Korea recording a small inflow, while Taiwan continues to see heavy selling and a $1.7b outflows for the past 5 sessions. India has been the worst hit region this year with a total outflow of almost $9b.

• South Korea: Recorded +$310m in inflows yesterday, reducing the 5-day total to -$1.40b. YTD flows remain negative at -$1.36b. The 5-day average is -$279m, worse than the 20-day average of -$68m and the 100-day average of -$152m.
• Taiwan: Posted heavy outflows of -$577m yesterday, bringing the 5-day total to -$1.72b. YTD flows are negative at -$3.88b. The 5-day average is -$345m, worse than the 20-day average of -$229m and the 100-day average of -$126m.
• India: Recorded -$416m in outflows yesterday, leading to a 5-day total of -$1.17b. YTD outflows remain significant at -$8.84b. The 5-day average is -$233m, better than the 20-day average of -$413m but worse than the 100-day average of -$158m.
• Indonesia: Posted -$12m in outflows yesterday, bringing the 5-day total to -$70m. YTD flows are negative at -$258m. The 5-day average is -$14m, close to the 20-day average of -$12m and the 100-day average of -$10m.
• Thailand: Saw +$20m in inflows yesterday, reducing the 5-day total to -$102m. YTD flows are negative at -$321m. The 5-day average is -$20m, slightly worse than the 20-day average of -$19m and the 100-day average of -$16m.
• Malaysia: Registered -$4m in outflows yesterday, bringing the 5-day total to -$153m. YTD flows are negative at -$740m. The 5-day average is -$31m, better than the 20-day average of -$36m but worse than the 100-day average of -$26m.
• Philippines: Recorded +$1m in inflows yesterday, bringing the 5-day total to +$19m. YTD flows remain negative at -$101m. The 5-day average is +$4m, better than the 20-day average of -$5m and the 100-day average of -$2m.

Table 1: EM Asia Equity Flows

• RES 3: 96.501 - 76.4% of the Mar 14 - Nov 1 ‘23 bear leg
• RES 2: 96.207 - 61.8% of the Mar 14 - Nov 1 ‘23 bear leg
• RES 1: 95.625/851 - High Jan 30 / High Dec 11 
• PRICE: 95.540 @ 16:31 GMT Feb 4
• SUP 1: 95.275 - Low Nov 14  (cont) and a key support 
• SUP 2: 94.477 - 1.000 proj of the Dec 11 - 23 - 31 price swing
• SUP 3: 94.495 - 1.0% 10-dma envelope

The Aussie 10-yr futures contract continues to trade below the Dec 11 high of 95.851. A stronger bearish theme would expose 95.275, the Nov 14 low and a key support. Clearance of this level would strengthen a bearish theme. For bulls, a confirmed reversal and a breach of 95.851, the Dec 11 high, would instead reinstate a bull cycle and refocus attention on resistance at 96.207, a Fibonacci retracement point.