INDIA: Modi Urges Indian Companies to Invest. 

• Trading has been largely focused around the Trump Tariff headlines today. Earlier it was reported that China is planning to open discussions with Trump to avoid further tariff escalation. Tsys futures are off session lows now with just the TU contract trading lower on the day, last -00⅛ at 102-25⅞, while TY is +9 at 109-04.
• A bullish corrective cycle remains intact and the TY contract is holding on to its recent gains. 109-11, the 50-day EMA, remains exposed. It has been pierced, a clear break of it would strengthen a bullish theme and open 109-31, the Dec 18 high. The medium-term trend condition is bearish. The bear trigger is 107-06, the Jan 13 low. Initial firm support has been defined at 108-06, the Jan 23 low.
• In cash tsys, the curve has twist-flattened. We trade well off session's worst levels after the 2yr rose 7bps earlier, it now trades +4.1bps at 4.239%, while the 10yr is -3bps at 4.508%, just above the ytd lows of 4.486%.
• The 2s10s curve has dropped 7bps to 27bps having now erased all the steepening made this year, while the 2s30s is -8.5bps at 50bps.
• Projected rate cuts through mid-2025 receded vs.Friday (*) levels as follows: Mar'25 at -3.9bp (-4.2bp), May'25 at -11.8bp (-12.3bp), Jun'25 at -22.6bp (-24.0), Jul'25 at -28.5bp (-29.5bp).
• Later today, we have S&P Global US Manufacturing PMI, ISM Manufacturing while later in the week focus will turn to corporate earnings, key CPI, PPI inflation measures and headline employment data for January.

JGB futures are stronger, +18 compared to settlement levels, but off session bests.

• (MNI) Many BoJ board members were concerned over the upside risks to prices and saw the need to raise the policy interest rate gradually at the Jan 23-24 meeting but they failed to offer insight into the pace or timeline, the summary of opinions showed.
• A different member said, with economic activity and prices remaining on track, "risks to prices have become more skewed to the upside." 
• The board hiked the policy rate 25bps to 0.5% at the January meeting, the first increase since July 2024 and its highest level since 2008.
• In today’s Asia-Pacific session, cash US tsys have twist-flattened, with yields ranging from 4bps higher to 4bps lower. In addition to tariff developments, this week’s focus in the US will be on a heavy slate of corporate earnings, key CPI and PPI inflation data, and January’s headline employment report.
• Cash JGBs are mixed across benchmarks, with yields 1bp lower to 1bp higher. The benchmark 10-year yield is 0.6bp lower at 1.239% versus the cycle high of 1.262%.
• Swap rates are 1-2bps lower. Swap spreads are slightly mixed.
• Tomorrow, the local calendar will see Monetary Base data alongside 10-year supply.

Indonesian headline and core inflation continued to diverge in January with the former falling below the bottom of Bank Indonesia’s 1.5-3.5% corridor, while core rose 0.1pp to 2.4%, 0.7pp higher than a year ago. BI cut rates 25bp in January with the next decision on February 19. IDR stability is likely to remain its focus and it will probably also look through the fall in headline and focus on core inflation as the former was impacted by government policy. 

Indonesia CPI y/y%

Source: MNI - Market News/Refinitiv

• The headline CPI fell 0.8% m/m non-seasonally adjusted bringing the annual rate down to 0.8% y/y from 1.6% in December. The sharp drop was due to a 8.75% y/y decline in utilities inflation, while transportation rose 0.8% y/y from -0.3% and food, drinks & tobacco increased 3.7% y/y up from 1.9%.
• Utilities fell 9.1% m/m in January due to a 50% discount on electricity rates for some customers.
• Personal care, education and household equipment drove the slight pick-up in underlying inflation.
• BI intervened to defend the rupiah today as a surge in the US dollar (BBDXY +1.2%) weighed on currencies regionally. It said that it was intervening to improve confidence and FX supply/demand. USDIDR is currently up 1% to 16460 today after a high of 16470.50 earlier.