ASEAN sovereign external liquidity pressures recede – Fitch

According to the latest report published by the US-based Fitch Ratings on Friday, the Association of Southeast Asian Nations (ASEAN) is seeing reduced external liquidity pressures, considering a significant reduction in the foreign capital outflows.

Key points

“Capital inflows may be subdued in the coming year or two, and volatility could return in the near term - given the environment of heightened uncertainty.

External liquidity will, therefore, remain a ratings weakness for some ASEAN sovereigns.”

Market reaction

The upbeat report failed to lift the market sentiment, as traders remain cautious ahead of the critical US payrolls data.

USD/JPY trades flat at 109.10 while the AUD/USD pair ranges around 0.6950. The Asian equities are mostly lower while Treasury yields correct sharply after Thursday’s rally.