Asia/Pacific

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July 11, 2024

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India CPI Preview: Weather Disruptions to Propel Headline Inflation
Paying Article

July 11, 2024 7:49 AM UTC

Bottom line: India’s June inflation level is expected to trend up to 4.9% y/y, rising from 4.7% y/y in May, reflecting higher food prices. The persisting heatwaves and the advance of the monsoon and its impact on produce will weigh on food prices in the near term, which could potentially see price

July 10, 2024

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China: Weak CPI and M2 Trends
Paying Article

July 10, 2024 7:27 AM UTC

China disinflation process is clear in the June CPI data, with excess production and soft consumer spending producing a lower than expected outcome.  Combined with weak M2 money growth, parts of China economy remain weak and point to a softening of GDP growth in H2.  However, policy action will li

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RBNZ Review: Signals easing soon
Paying Article

July 10, 2024 4:20 AM UTC

RBNZ kept rates unchanged at 5.5% and suggest inflation approaching target range

July 02, 2024

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Softening inflation will provide BI room to hold rate
Freemium Article

July 2, 2024 1:36 PM UTC

Bank Indonesia in a pro-stability move decided to maintain the key policy rate at 6.25%. The move comes at a time when the weakness in the Indonesia Rupiah has increased in recent weeks. A rate cut is therefore not on the horizon. 

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China: 3rd Plenum Incremental Not Game Changing
Paying Article

July 2, 2024 8:10 AM UTC

The 3 plenum July 15-18 will likely see some additional measures that will support or stimulate China economy.  However, they are unlikely to be game changers, such as a Yuan2-4trn program of buying most unsold homes or structural increase in the unemployment/health and pension safety nets to free

June 27, 2024

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Gold Rush: RBI Bolsters Reserves Amid Global Uncertainty
Paying Article

June 27, 2024 7:05 AM UTC

Despite a slight decline from its peak, India's reserves remain robust at US$ 652.8bn as of June 14. The RBI has followed a proactive approach in managing and diversifying these reserves, which now provide the central bank with sufficient room to stabilise the rupee amid recent volatility. It would

June 26, 2024

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Split Perspectives: RBI MPC's Take on Growth and Inflation
Paying Article

June 26, 2024 5:23 PM UTC

The latest minutes from the RBI MPC meeting indicated that members are optimistic about India's economic growth outlook but are exercising caution due to inflation concerns. The minutes underscored differing viewpoints between external and internal MPC members regarding future policy actions. While

June 25, 2024

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Equities Outlook: Choppy U.S. and Outperformance Elsewhere
Paying Article

June 25, 2024 7:05 AM UTC

 •    U.S. equities are overvalued and waiting for earnings growth to catch-up, which leaves the market choppy, directionless and vulnerable to intermittent 5% corrections. Our forecast slowing of the U.S. economy before Fed rate cuts or nervousness about the post-election prospects are potenti

June 24, 2024

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Modi 3.0 to be Much Like Previous Two Terms
Paying Article

June 24, 2024 6:47 AM UTC

A weakened BJP has formed a government with support from regional parties and independents. The BJP holds 240 seats in parliament on its own and with its partners the government in power now holds 303 seats, which is substantially higher than the 272 needed to form a government. As a consequence, po

June 21, 2024

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Asia/Pacific (ex-China/Japan) Outlook: Growth Momentum but Delayed Rate Cuts
Paying Article

June 21, 2024 9:45 AM UTC

•    Economic activity in emerging Asian economies is forecast to remain strong. Despite several challenges, including a tight oil market, constrained liquidity conditions, and delayed rate cuts, the region's economic activity is expected to show resilience. Other potential obstacles include u

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Bank Indonesia Holds Rate Despite IDR Weakness
Paying Article

June 21, 2024 5:54 AM UTC

Bank Indonesia in a pro-stability move decided to maintain the key policy rate at 6.25%. The move comes at a time when the weakness in the Indonesia Rupiah has increased in recent weeks. A rate cut is therefore not on the horizon. 

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Japan Outlook: Slow but not Steady
Paying Article

June 21, 2024 12:15 AM UTC

•    GDP growth for 2024 has been revised lower to +0.4% as private consumption contracted stronger in Q1 2024 from moderating but still persistent inflationary pressure. We forecast consumption to gradually recover throughout the rest of 2024 as real wage turned from negative to positive yet

June 19, 2024

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China Outlook: 2024 on Track, but 2025 Headwinds
Paying Article

June 19, 2024 9:35 AM UTC

Public investment and industrial production in high tech and renewables are helping to support growth and should get the economy close to 5% in 2024.  However, underneath the surface, consumption is slowing, private sector investment and employment growth is sluggish, and residential property inves

June 17, 2024

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China Data: Mixed Momentum and No MTF Cut Until October
Paying Article

June 17, 2024 6:59 AM UTC

Overall the May data suggests that enough momentum exists for Q2 GDP to be above 5.0% Yr/Yr, which given the Q1 GDP figure means that the odds are good that the 2024 5.0% GDP target can be meet.  However, we see a softer of H2 GDP and 4.0% GDP in 2025, given weak domestic demand is unlikely to chan

June 14, 2024

BoJ Review: Pushing Hikes to July, if any
Paying Article

June 14, 2024 5:24 AM UTC

BoJ keep rates and bond purchase the same, suggesting the planning for bond purchase cut will be decided in July

June 12, 2024

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China CPI: Core Slows and 10bps June 17 MLF Cut?
Paying Article

June 12, 2024 7:34 AM UTC

 China disinflation is clear in the latest numbers for May, with core falling 0.2% on the month.  Further stimulus will likely arrive in the form of monetary easing.  While it is a close call, we look for a 10bps cut in the medium-term lending facility rate (MLF) from 2.50% on June 17.    

June 11, 2024

BoJ Preview: The Step of Faith
Paying Article

June 11, 2024 3:33 AM UTC

BoJ will likely decrease bond purchase from six trillion JPY to five trillion and hike interest rate by 0.1% as wage growth will bring trend inflation higher

June 10, 2024

RBI’s Balanced Act: Steady Rates and a Promising FY25 Outlook
Freemium Article

June 10, 2024 9:24 AM UTC

The Reserve Bank of India's Monetary Policy Committee, led by Governor Shaktikanta Das, chose to keep the repo rate unchanged at 6.5% for the seventh consecutive time, aiming to  ensure that the disinflationary process sustained. Growth is expected to be robust in FY25, while inflation risks are el

June 07, 2024

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China Excess Production: Exports Going Cheap?
Paying Article

June 7, 2024 8:45 AM UTC

China excess of production over domestic demand is causing disinflation pressures in China, but also leading to a fall in export prices as China companies seek buyers for production.  Though this is a helpful factor to the global inflation debate, it is causing trade tensions with the U.S. and EU o

June 04, 2024

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India Elections: Early Trends Point to a Weakened BJP Government
Paying Article

June 4, 2024 2:02 PM UTC

Election counting trends indicate that the BJP-led NDA is on track to secure 290 seats, with the BJP projected to win 235-240 seats. The INDIA alliance is expected to secure around 230 seats. Final results will be announced later tonight. A weakened BJP is expected to form a government with its alli

June 03, 2024

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Modi's Marathon: Exit Polls Predict Third Term with Sweeping Majority
Paying Article

June 3, 2024 12:59 PM UTC

Exit polls for the 2024 general elections indicate another Modi wave. The markets have welcomed the exit poll results and the overall business sentiment is euphoric. Exit polls forecast a landslide victory for the BJP-led NDA, with projections nearing the '400' mark. The BJP has also secured a signi

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China Finance Weakest Links: Small Banks and Property Finance
Paying Article

June 3, 2024 9:19 AM UTC

China authorities appear to have the financial stability spill over from the property sector until control currently, through a combination of direct support for housing and forced mergers of weak banks (mainly rural so far).  This game plan will likely be followed for the next few years. However,

May 28, 2024

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Indonesia CPI Preview: Food Prices to Maintain Pressure
Paying Article

May 28, 2024 10:11 AM UTC

Indonesia’s consumer price inflation is expected to remain broadly stable at the 3% y-o-y mark in May. Supply disruption due to floods in Sumatra region alongside persistent high food prices will keep price pressures elevated. 

May 27, 2024

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Votes to Volatility: Potential Market Outcomes and Policy Directions Post Elections
Paying Article

May 27, 2024 6:47 AM UTC

As India’s month long 2024 General Elections are almost coming to a close, lower voter turnout has increased uncertainty despite expectations of a BJP victory. While we still expect a BJP victory, the markets are becoming increasingly cautious. A decisive BJP win would likely strengthen the rupee

May 22, 2024

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Bank Indonesia Holds Firm on Rates: A Steady Hand for Currency Stability
Paying Article

May 22, 2024 9:29 AM UTC

Bank Indonesia in a pro-stability move decided to maintain the key policy rate at 6.25% today. The move comes at a time when the wakness in the Indonesia Rupiah has abated and headline inflation has edged down. Despite improving stability, a rate cut is not in sight in the near term. 

May 17, 2024

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China: Lopsided Growth and New Housing Measures
Paying Article

May 17, 2024 6:54 AM UTC

Overall, the April industrial production suggests Q2 GDP should be reasonable, but weak retail sales suggests H2 2024 can be disappointing. We stick with a 4.6% forecast for 2024 GDP growth.    

May 16, 2024

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France and Japan: Debt Fuelled Growth Problem
Paying Article

May 16, 2024 10:30 AM UTC

Most of the surge in debt/GDP in Japan and 40% in France is due to higher government debt and this should not be a binding constraint provided that large scale QT is avoided – we see the ECB slowing QT in 2025 and are skeptical about BOJ QT in the next few years.  The adverse impact of higher deb

May 15, 2024

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China: Too Much Debt In Some Sectors
Paying Article

May 15, 2024 9:55 AM UTC

While part of corporate debt is quasi government (SOE and LGFV’s) and China creditors can be pursued to rollover by the authorities for larger borrowers, households and part of the private sector are focused on the previous buildup of debt.  With China authorities reluctant to aggressive ease fis

May 14, 2024

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India Inflation Review: Sticky Prices to Keep RBI Cautious
Paying Article

May 14, 2024 3:54 AM UTC

India’s consumer price inflation eased amrginally to 4.83% yr/yr in April, reflecting lower fuel and light prices. The government cut prices of LPG cylinders in India ahead of the elections. However, food price pressures persist despite various supply side measures, underscoring the sticky nature

May 13, 2024

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China RRR and Rate Cuts
Paying Article

May 13, 2024 7:54 AM UTC

The latest China money supply and lending figures show that private household and business lending is very subdued.  More need to be done to boost credit demand as well as credit supply.  However, the authorities desires to avoid too much Yuan weakness will likely mean that the next move is a 25bp

May 10, 2024

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Asset Allocation 2024: Tricky Seven Months Remaining
Paying Article

May 10, 2024 1:06 PM UTC

Fed easing expectations for 2025 and 2026 can shift from a terminal 4% Fed Funds rate towards 3%, as the U.S. economy slows due to lagged tightening effects.  Combined with Fed easing starting in September this should mean a consistent decline in 2yr yields.  However, 10yr U.S. Treasury yields wil

May 08, 2024

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China Equities: A Tactical Play
Paying Article

May 8, 2024 2:20 PM UTC

China equities can see a tactical bounce of 5-10% in the coming months.  Cheap valuations and  underweight global fund positions means that the scale of pessimism only has to get less bad on the economy and China authorities attitude towards businesses.  While we see a tactical opportunity, we do

May 07, 2024

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Indonesia Q4 GDP Review: Robust Start to 2024
Paying Article

May 7, 2024 1:22 PM UTC

Bottom line: Indonesia's Q1 GDP — released on May 6 — saw growth rebound to 5.1% yr/yr from 4.90% yr/yr in Q4 2023. While private consumption continued its ascent, government expenditure emerged as the key driver of Indonesia's growth narrative. Private consumption was supported by festive deman

May 03, 2024

Indonesia CPI Review: Inflation Inches Down but BI on Alert
Paying Article

May 3, 2024 10:33 AM UTC

Indonesia’s consumer price inflation eased marginally to 3% yr/yr in April on the back of declining food prices. Despite the easing, food price remain the key inflationary factor. Additionally, imported inflation as the IDR comes under pressure could keep inflation elevated in the near term. Bank

May 02, 2024

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China Politburo: Help for Housing, But No Game changers
Paying Article

May 2, 2024 10:50 AM UTC

Politburo statement in late April suggests extra support for residential property.  However, we see this as being incremental rather than any game changers and we still see residential investment remaining a negative drag on 2024 GDP growth.

April 29, 2024

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Indonesia CPI Preview: Food Prices to Push Up CPI in April
Paying Article

April 29, 2024 1:25 PM UTC

Indonesia’s consumer price inflation in expected to continue to trend upward in April. Food prices, alongside higher transportation price growth will drive up inflation. Furthermore, increased demand during Ramadan will also weigh on headline inflation. 

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Growth Gains But Inflation Pains: RBI's view on Indian Economy
Freemium Article

April 29, 2024 12:42 PM UTC

Minutes of the latest Reserve Bank of India (RBI)'s monetary policy committee meeting revealed a nuanced outlook blending optimism regarding India's growth trajectory with apprehensions surrounding inflationary risks. While upbeat macroeconomic indicators paint a favourable picture, the committee re

Indonesia: MPC Review: Bank Indonesia Surprises With A Rate Hike
Paying Article

April 29, 2024 11:26 AM UTC

In a pre-emptive move to both curb inflationary pressures and safeguard the Indonesia Rupiah (IDR) against furhter depreciation, Bank Indonesia, in a surprise move, increased its main policy rate by 25 bps to 6.25%. However, further rate hikes are not expected as the central bank remains wary of hur

April 26, 2024

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BoJ Review: No change with upward revision in CPI Forecasts
Paying Article

April 26, 2024 7:38 AM UTC

BoJ has kept interest rate at 0-0.1%.
2024 CPI has been revised higher and GDP lower

April 25, 2024

BoJ's Intervention and its impact
Paying Article

April 25, 2024 6:24 AM UTC

In the period of time when JPY significantly weakens or strengthens, BoJ will intervene in the FX market either through verbal or actual intervention. As JPY weakened significantly in the past months, once again we found ourselves in the proximity of FX intervention with unknowns for anonymity is ke

April 24, 2024

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China: Surging Government Debt and Does It Matter?
Paying Article

April 24, 2024 9:30 AM UTC

Total non-financial sector debt, plus the IMF estimates of government debt/GDP, do seem to matter for the action of China authorities, as fiscal policy stimulus is targeted rather aggressive as in 2009 or 2015.  The overall debt picture also matters for the growth outlook, as the excess debt/GDP le

April 23, 2024

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Indonesia: MPC Preview: Bank Indonesia to Hold Rate Despite Currency Volatility
Paying Article

April 23, 2024 11:12 AM UTC

With inflation within target range and the need to defend the currency amid global uncertainties and US dollar strength, Bank Indonesia (BI) is likely to extend its pause on rate adjustments in the upcoming monetary policy meeting on April 24. BI remains committed to stabilising the Indonesian rupia

April 22, 2024

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Indonesian Court Delivers Verdict: Prabowo prevails
Paying Article

April 22, 2024 3:18 PM UTC

The Constitutional Court dismissed cases against Vice President Gibran Rakabuming Raka and President Joko Widodo. In Gibran's case, the court didn't disqualify him from running for president but sanctioned the election committee for not amending regulations following a previous ruling. This ruling l