SOUTH KOREA: Jobless Rate Dips, Against Forecasts, Jobs Growth Stabilizes

USD/CNH sits modestly higher in early Monday dealings, the pair last above 7.3100 (session highs rest at 7.3163). Early USD impetus has been given a boost by Trump tariff headlines, which stated that 25% tariffs will e imposed on Monday for all steel and aluminium imports. No timeline was specified on when they would come into effect though (per BBG). Spot USD/CNY finished Friday just near 7.2950, the highest closing level since Trump's inauguration on Jan 20. The CNY CFETS basket tracker slipped to 100.55 on Friday, lowest levels since mid Dec last year.

• China steel exports to the US are smaller than other major economies, but it is still major aluminium exporter to the US (at least in a relative sense, with Canada the largest). The USD amount of aluminium exports is not large though relative to total exports of China.  
• There is also the reciprocal tariff threat that Trump made last week, which would reportedly apply to all countries. An announcement on this is expected this week, although how China would fare is unclear. BBG notes average tariff levels imposed by China have come down a lot since it entered the WTO back in 2001.
• On Sunday, we had the China Jan inflation figures print, which showed slightly stronger headline and a further pick up in core inflation. Core y/y is now 0.60%y/y, up from recent cycle lows of 0.10% (Sep 2024). This is less deflationary fears at face value, although Jan may have been aided by seasonal spending related to LNY.
• Focus data wise this week will be on the Jan new loans/aggregate finance figures. 

• RES 3: 147.74 - High Jan 15 and bull trigger (cont)
• RES 2: 146.53 - High Aug 6 
• RES 1: 142.73/144.48 - High Dec 9 / High Nov 11  
• PRICE: 140.00 @ 16:41 GMT Feb 7
• SUP 1: 139.88 - Low Feb 07
• SUP 2: 139.38 - 2.764 proj of the Aug 6 - Sep 3 - 9 price swing
• SUP 3: 138.87- 3.000 proj of the Aug 6 - Sep 3 - 9 price swing    

A clear downtrend in JGB futures remains intact and the latest fresh cycle lows reinforce this condition. Note too that moving average studies on the continuation chart are in a bear-mode setup, highlighting a clear downtrend. The move down exposes the 140.00 psychological handle next. For bulls, a reversal would open 142.73 and 144.48, the Dec 9 and Nov 11 high respectively. For now, short-term gains are considered corrective. 

Mixed Flows to end the week on Friday. Taiwan started last week with heavy outflows, however saw inflows to end the week. India continues to see strong outflows with a net outflow of $9.2b for the year.

• South Korea: Recorded -$169m in outflows yesterday, bringing the 5-day total to -$210m. YTD flows remain negative at -$1.21b. The 5-day average is -$42m, better than the 20-day average of -$70m but worse than the 100-day average of -$142m.
• Taiwan: Posted +$649m in inflows yesterday, reducing the 5-day total to -$774m. YTD flows are negative at -$2.04b. The 5-day average is -$155m, worse than the 20-day average of -$102m and the 100-day average of -$105m.
• India: Recorded -$411m in outflows yesterday, bringing the 5-day total to -$841m. YTD outflows remain significant at -$9.26b. The 5-day average is -$168m, better than the 20-day average of -$365m but worse than the 100-day average of -$170m.
• Indonesia: Posted -$31m in outflows yesterday, bringing the 5-day total to -$233m. YTD flows are negative at -$462m. The 5-day average is -$47m, worse than the 20-day average of -$16m and the 100-day average of -$14m.
• Thailand: Saw +$30m in inflows yesterday, bringing the 5-day total to +$74m. YTD flows remain negative at -$256m. The 5-day average is +$15m, better than the 20-day average of -$10m and the 100-day average of -$16m.
• Malaysia: Registered +$21m in inflows yesterday, reducing the 5-day total to -$38m. YTD flows are negative at -$740m. The 5-day average is -$8m, better than the 20-day average of -$33m but worse than the 100-day average of -$26m.
• Philippines: Recorded +$7m in inflows yesterday, bringing the 5-day total to +$28m. YTD flows remain negative at -$86m. The 5-day average is +$6m, better than the 20-day average of -$3m and the 100-day average of -$2m.

Table 1: EM Asia Equity Flows