PHILIP Front-End Weaker As Gov Borrowing Increases

Asia Sovs mixed today, with INDON out-performing the PHILIP curve. Focus has largely on China lowering its 1yr & 5yr loan prime rates and Biden bowing out of the Presidential race, although little have had much impact on bond prices. The Philippines President will deliver his third state of the nation Address to congress later today.

• The PHILIP curve has bear-flattened today with front-end yields 2-5bps higher, this looks to be on the back of the BSP reporting an increase in government borrowings. The PHILIP curve now trades wider than the INDON across the entire curve.
• Indonesia's broad money supply increased by 7.8% y/y in June, up from 7.6% the previous month, reaching 9,026.2 trillion rupiah. Net claims on the central government rose by 14% y/y, while net foreign assets increased by 3.1% y/y.
• The BSP approved $3.90b in public sector foreign borrowings from April to June 2024, a 43% increase from the previous year. These borrowings include a $2b bond issuance and three project loans totaling $1.90b. The country's total external debt rose to $128.7b by the end of March 2024, up 2.6% from the end of 2023, with the debt ratio remaining at a prudent 29% of GDP as per Philstar.
• At 4.pm HKT President Marco will will deliver his third state of the nation Address to congress, it is likely he will speak about strengthen ties with the US, something he looked to strengthen since taking over power as he has shifted away from China relations. Macros also plans to increase spending with a focus on social programs and infrastructure, so how that will be funded could also be mentioned.
• Cross-asset: Asian currencies are lower verses the USD today, with the IDR falling 0.23%, while the PHP is 0.19% lower, equities are higher today with the JCI up 0.30% while the PSEi is up 0.46%.
• Regionally there is little on the calendars this week.