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Asia Sovs Steady Ahead Of US CPI, PH Defense Spending To Increase

ASIA RATES
EM BulletDataHomepagemarkets-real-timeBulletEmerging Market News

Asian EM Sovs yields are little changed again today following another balance testimony from Powel overnight, and comments from the Fed's Cook where see mentioned she expects a soft landing. Data has been light in the region today, with focus turning to US CPI tonight.

  • The INDON/PHILIP curves are steady today, although there has been some buying through the belly of both curves recently, with 5Y yields now trading back at early April lows.
  • The front-end PHILIP curve continues to trade 5bps tighter than INDON but flattens out and trades 5-10bps wider out the curve.
  • Local currencies are a touch higher today with the USD/IDR trading at 16,202, while the USD/PHP is 58.28. The PSEi is up 1.42% while the JCI is up 0.30%.
  • Indonesian President-elect Prabowo Subianto plans to allow the nation's debt-to-GDP ratio to rise to 50% if tax revenues can be increased. Despite concerns about potential impacts on bond prices and the rupiah, Prabowo's economic team denied plans to exceed the current fiscal rules, which cap the budget deficit at 3% of GDP and the debt-to-GDP ratio at 60%. Prabowo, who takes office in October, aims to boost the tax-to-GDP ratio to 16% from the current 10%.
  • The Philippines plans to increase defense spending to over 1% of GDP, excluding military pensions, to upgrade its capabilities amid South China Sea tensions, with the defense budget set at 278.1 billion pesos ($4.8 billion) for 2024. Defense Secretary Gilberto Teodoro is also seeking private sector support through debt instruments to fund the nation's claims in the contested waters.
  • Looking ahead, the calendar is light on for the remainder of the week.
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Asian EM Sovs yields are little changed again today following another balance testimony from Powel overnight, and comments from the Fed's Cook where see mentioned she expects a soft landing. Data has been light in the region today, with focus turning to US CPI tonight.

  • The INDON/PHILIP curves are steady today, although there has been some buying through the belly of both curves recently, with 5Y yields now trading back at early April lows.
  • The front-end PHILIP curve continues to trade 5bps tighter than INDON but flattens out and trades 5-10bps wider out the curve.
  • Local currencies are a touch higher today with the USD/IDR trading at 16,202, while the USD/PHP is 58.28. The PSEi is up 1.42% while the JCI is up 0.30%.
  • Indonesian President-elect Prabowo Subianto plans to allow the nation's debt-to-GDP ratio to rise to 50% if tax revenues can be increased. Despite concerns about potential impacts on bond prices and the rupiah, Prabowo's economic team denied plans to exceed the current fiscal rules, which cap the budget deficit at 3% of GDP and the debt-to-GDP ratio at 60%. Prabowo, who takes office in October, aims to boost the tax-to-GDP ratio to 16% from the current 10%.
  • The Philippines plans to increase defense spending to over 1% of GDP, excluding military pensions, to upgrade its capabilities amid South China Sea tensions, with the defense budget set at 278.1 billion pesos ($4.8 billion) for 2024. Defense Secretary Gilberto Teodoro is also seeking private sector support through debt instruments to fund the nation's claims in the contested waters.
  • Looking ahead, the calendar is light on for the remainder of the week.