MNI Asia Pac Weekly Macro Wrap

EXECUTIVE SUMMARY

JAPAN:

• The BoJ left rates unchanged, as widely expected. Bond purchases are also expected to be maintained around the current pace. USD/JPY gains continue, to fresh multi-decade highs.

AUSTRALIA:

• Q1 CPI was stronger than expected with the domestically-driven components remaining elevated. The monthly data is showing a stalling in disinflation. The report is not enough to derail the RBA’s outlook and on hold stance though.
• The Judo Bank preliminary April PMIs are pointing to the pickup in Q1 private sector activity continuing in Q2.

NEW ZEALAND:

• The trade deficit narrowed in March driven by improving export growth while imports remained weak.

SHORT TERM RATES:

• STIR markets within the $-bloc continue to price out dovish policy projections for this year. Year-end official rate projections have firmed by 5-29bps compared to levels from a week ago, with the most notable increase observed in Australia. The other markets are around 5bps firmer.

CHINA:

• Spot USD/CNY continues to trade very close to the top end of the daily trading band, fuelling devaluation speculation. Official rhetoric remains around FX stability and increasing oversight though.

SOUTH KOREA:

• Q1 GDP surged this week, printing stronger than forecasts. Survey data points to a continued export expansion. The strong growth backdrop may ease pressure on the BoK to ease.

INDONESIA:

• Bank Indonesia hiked rates 25bp to 6.25% to pre-emptively ensure FX stability and inflation stays within the band. It didn’t change its growth or inflation forecasts but has pushed out Fed easing to Q4, probably December, with only 25bp now for this year down from 75bp.
• The March trade surplus widened but Q1 as a whole was narrower than Q4.

See the attached below for more details.

weekly macro round up (Apr 26 2024) final.pdf