Asia Sovs Track US Yields Lower, BI Rate Decision Next Week

Asian EM Sovs yields are lower today, although have underperformed moves made in UST. The softer-than-expected US CPI saw front-end US treasury yields fall 10bps, and chances of a September rate cut jumped to 90% from about 65% prior to the data. Next week we have the BI rate decision, where it's widely expected they'll keep rate on hold at 6.25%.

• The INDON/PHILIP curves have seen most demand through the belly of their curves, INDON is out-performing with yields 4-8bps lower, while PHILIP curve is 3-5bps lower.
• The front-end PHILIP curve continues to trade 5bps tighter than INDON but flattens out and trades 3-5bps wider out the curve.
• Cross-asset: Local currencies have edged higher over the past two weeks, with the USD/IDR trading at 16,158 vs 16,478 highs, a 1.95% move, while the USD/PHP is 58.341 vs 58.930 representing a 1% move. Equities have performed well recently with the JCI up 9.27% and the PSEi is up 7.36% from recent monthly lows although equity flows into both markets have been muted with slightly more money heading into Indonesian equities.
• The Philippines will issue about $500m of the 6.25% 2034 bond on Tuesday,
• Looking ahead, Bank Indonesia rate decision on Wednesday