MNI: UK JAN FLASH MANUF PMI 48.2 (FCST: 47.0); DEC 47.0

MNI: EUROZONE JAN FLASH MANUF PMI 46.1 (FCST: 45.4); DEC 45.1

MNI: GERMANY JAN FLASH MANUF PMI 44.1 (FCST: 42.7); DEC 42.5

MNI:PBOC Net Drains CNY795Bn Via MLF; Injects CNY179Bn Repo

MNI: PBOC Sets Yuan Parity Lower At 7.1705 Fri; -1.62% Y/Y

MNI CBRT WATCH: Turkey CenBank Cuts 1W Repo 250Bps As Expected

MNI: FRANCE JAN FLASH MANUF PMI 45.3 (FCST: 42.5); DEC 41.9

MNI: SPAIN DEC PPI 0.9% M/M, 2.3% Y/Y

MNI: SWEDEN DEC UNEMPLOYMENT 8%

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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MNI ASIA PAC Weekly Macro Wrap:

A weekly wrap of some the key events/macro themes from the Asia Pac region
USCentral Bank NewsHomepageFederal ReserveAPACAustraliaNew ZealandStoryChinaNorth AmericaMarkets

Executive Summary:

  • JAPAN
  • The BoJ hiked as expected, but the commentary and forecasts gave some hawkish undertones to the outcome. Japan headline inflation accelerated into end 2024.
  • Japan exports were slightly above forecasts for December up 2.8%y/y (forecast was 2.4%) but slower than the November’s 3.8% pace. Japan was somewhat lagging other NEA economies in terms of export trends at the end of 2024. Export growth for South Korea through to China was around +6% to +10% y/y.
     
  • AUSTRALIA
  • The NZ Q4 data suggest there will be further moderation in Australia’s trimmed mean inflation but possible upside risks to services, which is a particular focus of the RBA’s. Australia’s Q4 CPI data prints on January 29.
  • There has been some concern that the resilience of Australia’s labour market has been driven by the non-market economy, but Q4 was fairly broad-based with 11 of the 19 major sectors posting job gains accounting for 75% of total employment. With underemployment trending lower over H2 2024, the RBA is likely to remain concerned about the tightness of the labour market. Although SEEK salary data signals that wage inflation is contained.
     
  • NEW ZEALAND
  • Q4 NZ CPI was close to Bloomberg consensus expectations at 0.5% q/q and 2.2% y/y after 0.6% & 2.2% in Q3, above the RBNZ’s November forecast of 0.4% & 2.1%. The slightly higher outcome was driven by international airfares with the volatile component accounting for almost a quarter of the quarterly increase. With the data printing close to the RBNZ’s projections and non-tradeables easing, another 50bp cut on February 19 seems likely given the weakness of the economy.
  • The RBNZ’s measure of core inflation moderated to 3.1% y/y from 3.3% but core non-tradeables remains sticky.
  • Card transactions rose sharply in December suggesting that rate cuts are helping households.
     
  • SOUTH KOREA 
  • Weaker GDP to end 2024 should pave the way for a BoK rate cut next month. 
     
  • ASIA
  • In signs that the Central Bank could be on hold for 2025, Bank Negara (‘BNM”) held rates at 3.00% where it has been since May 2023. The BNM maintains a positive outlook for growth and hinted at expectations for upside potential given an anticipated rise in the ‘tech cycle’ which will support exports, and robust domestic demand. The MAS eased policy in Singapore for the first time since 2020.
  • Asian equity flows have been mixed this past week, with India still seeing outflows though. 
     
  • GLOBAL
  • On the first day of his second term, President Trump has said that he thinks a 25% tariff on imports from Canada and Mexico will be enacted from February 1. Both countries have export shares to the US over 75% but there are likely to be intense negotiations and if there’s no deal, retaliation.


PLEASE FIND THE FULL REPORT HERE: weekly macro round up (January 24 2025) .pdf

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Executive Summary:

  • JAPAN
  • The BoJ hiked as expected, but the commentary and forecasts gave some hawkish undertones to the outcome. Japan headline inflation accelerated into end 2024.
  • Japan exports were slightly above forecasts for December up 2.8%y/y (forecast was 2.4%) but slower than the November’s 3.8% pace. Japan was somewhat lagging other NEA economies in terms of export trends at the end of 2024. Export growth for South Korea through to China was around +6% to +10% y/y.
     
  • AUSTRALIA
  • The NZ Q4 data suggest there will be further moderation in Australia’s trimmed mean inflation but possible upside risks to services, which is a particular focus of the RBA’s. Australia’s Q4 CPI data prints on January 29.
  • There has been some concern that the resilience of Australia’s labour market has been driven by the non-market economy, but Q4 was fairly broad-based with 11 of the 19 major sectors posting job gains accounting for 75% of total employment. With underemployment trending lower over H2 2024, the RBA is likely to remain concerned about the tightness of the labour market. Although SEEK salary data signals that wage inflation is contained.
     
  • NEW ZEALAND
  • Q4 NZ CPI was close to Bloomberg consensus expectations at 0.5% q/q and 2.2% y/y after 0.6% & 2.2% in Q3, above the RBNZ’s November forecast of 0.4% & 2.1%. The slightly higher outcome was driven by international airfares with the volatile component accounting for almost a quarter of the quarterly increase. With the data printing close to the RBNZ’s projections and non-tradeables easing, another 50bp cut on February 19 seems likely given the weakness of the economy.
  • The RBNZ’s measure of core inflation moderated to 3.1% y/y from 3.3% but core non-tradeables remains sticky.
  • Card transactions rose sharply in December suggesting that rate cuts are helping households.
     
  • SOUTH KOREA 
  • Weaker GDP to end 2024 should pave the way for a BoK rate cut next month. 
     
  • ASIA
  • In signs that the Central Bank could be on hold for 2025, Bank Negara (‘BNM”) held rates at 3.00% where it has been since May 2023. The BNM maintains a positive outlook for growth and hinted at expectations for upside potential given an anticipated rise in the ‘tech cycle’ which will support exports, and robust domestic demand. The MAS eased policy in Singapore for the first time since 2020.
  • Asian equity flows have been mixed this past week, with India still seeing outflows though. 
     
  • GLOBAL
  • On the first day of his second term, President Trump has said that he thinks a 25% tariff on imports from Canada and Mexico will be enacted from February 1. Both countries have export shares to the US over 75% but there are likely to be intense negotiations and if there’s no deal, retaliation.


PLEASE FIND THE FULL REPORT HERE: weekly macro round up (January 24 2025) .pdf