瑞穗日报

Jun 30, 2025 Yields(2Y:+2.9bp;10Y:+3.6bp;30Y:+3.6bp) Three Take-Aways -USTyieldcurvebearsteepened. 1)US equities extended rallies as real personal consumptionexpenditurein May contracting may have aided hopes of Fedeasing. Equities(Nasdaq:+0.5%;S&P500:+0.5%;Dow:+0.5%) -USequitiescontinuedtoreachalltimehighs. 2)USfiscalriskstohogheadlinesasRepublicansaimtopasstheOneBigBeautifulBillActbyendofthisweek. FX(DXY:+0.3%) -USDtradedmixedintheG10space.CADlostthemostgroundduetothesuspension of trade talks with the US.USD/JPY traded sidewaysaroundmid-144.EURinchedupslightlywithbuoyancyabove1.17.AUDslippedbackbelowmid-65centsasattentionturnstopotentialforRBAtocutinJuly. 3)IndiaandChinatradeteamsextendingstaysinWashingtonnotaclearcaseofdealconfirmedandinanycase,smallcountrieswithlessleveragecautionedagainstextendingoptimism. MACROTHEME:Extensions -InEM-Asia,USD/SGDisalsosidewaysaroundmid-1.27.RegionalpeersmaystarttheweeksofteramidhigherUSTyieldsandarecognitionthattradedealsmaynotbeasforthcomingforASEAN. -LastFriday,USequitiesextendedtheirrallies,inwhatappearstobeacaseofbadnewsisgoodnewswithdismaleconomicdataaidinghopesofFedeasing.Personalconsumptionexpendituredropped0.4%MoMinMayandpersonalincomecontracted0.1%MoMonthebackoflowergovernmenttransfers. -THBmaycomeunderrenewedpressuredfollowingprotestsinBangkokovertheweekend. -Core PCE came in at 0.2%MoM which was slightly higher thanexpectedbut certainly not near a troubling momentum for policymakers.Nonetheless,stronger contribution from non-durable goodsmayhavesomeworriedaboutthepassthroughfromtariffs. China:PMI -Industrialprofitsfell9.1%YoYinMayreflectbothdomesticcompetitionandexternal demand stresses.Profits decline among miners andautomakersprice war while equipment manufacturers benefitted fromgovernmenttradeinprogrammes. -Amidtheimprovedriskmood,USTssoldoffbutthismayalsobeaccountingforfiscalriskswithimpendingpassageofTrump'sOneBigBeautifulBillontopoftariffrisks.WithTrumpaimingforaJuly4thdeadline,thetaxbillhasreachedtheSenateforavotetodayandthebillisestimatedtoaddUS$3.3trilliontothefiscaldeficitoverthenextdecadebytheCongressionalBudgetOffice.AkeyaccountingissuepertainstousingthecurrentpolicysettingasabaselinewhichwouldimplythatitcostnothingtoextendTrump's2017taxcuts. -WeanticipateamodestimprovementinChina’sManufacturingPMIforJune.TheUS-China trade truce reached in mid-Maycaught many offguard,includingsomeUSimportersandChinesemanufacturers. -As a result,some of the boom from reinstated export orders is notexpectedtobeseeninindustrialactivityuntilJune. -Nonetheless,limitedshippingcapacitytotheUS,evidencedbyasurgeinforwardshippingpricequotesforJuneandJuly,islikelytoremainaconstrainton industrial output,keeping the PMI below the expansionthresholdof50. -The fiscal front in the immediate horizon appears to be furthercomplicatedbycourtrulingswithBessentwarningthatthedebtlimitdeadlinecouldarrivesoonerifthecourtsforcedthemtorebatethetariffincome. Thailand:CurrentAccountSurplus? -With the customs trade data showing a recovery of a surplus tradebalanceonthebackofstrongerexportsrevenueinMaywhichoutweightheriseinimportexpenditure,currentaccountpositionforMayisalsoexpectedtoreturntoaverymodestsurplusthiscomingweek.Onthetradefront,higherexportsrevenuefromboththeUSandChinadrovehalfoftheMoMincrease.ThegoodscompositionthoughwasstarklydifferentwithfrontloadingofmanufacturedgoodsdrivingmostoftheincreasetotheUS while agricultural products contributed the bulk of increase inexportstoChina. -Onthetradepolicyfront,DonaldTrumphasfueledfurtheruncertaintysayingthat"Idon'tthinkIneedto(extendtradedeadline)but"Icould,nobigdeal".Healsoaddedhispreferencetosendoutlettersdeclaringthetariffrate. -Aimingtosecurebetteroutcomes,Japan'sAkazawahasextendedhisstaytocontinuefurthernegotiationswithBessent.Similarly,India'stradeteam has also extended their stays to iron out details.Meanwhile,Taiwanhasalsosaidthatthereisconstructiveprogress. -One should remain cautious on outright optimism especially withTrumpendingalltradediscussionwithCanadaovertheirdigitalservicestaxandsaidthatwewillletCanadaknowthetariff...withinthenextsevenday.Whilethismaybepartofnegotiatingtactics,theuncertaintyforbusinesseswillstillbeasignificanthindrance. -Notable,theexpectedcurrentaccountsurplusinMayisunlikelytostemfromits traditional comparative advantage of tourism as the servicebalanceislikelytorecordasmalldeficitastouristarrivalsdipped11%withtheoffseasonsettingasreflectedbyasharpdeclineinEuropeantourists. -Nonetheless,Bessenthasstatedthatsmallercountriesmaygethitwithhighertariffs. -All in,in the absence of this strong domestic catalyst,the THB willcontinuetobeswayedbydomesticpoliticaldevelopmentsandbroaderUSDmovements. RESEARCHTEAMVishnu Varathan | Serena Zhou | Tan Boon Heng | Tan Jing Yi MARKET COMMENTARY DISCLAIMERTHIS DOCUMENT IS NOT A RESEARCH REPORT AND IS NOT INTENDED AS SUCH. Unless stated otherwise in the country specific distribution information below, this document has not been prepared in a