MNI Asia Pac Weekly Macro Wrap

EXECUTIVE SUMMARY

JAPAN

• Japan wages data was mixed with headline softer than expected, but the same sample based data painted a resilient backdrop for wages. This is a key input into the BoJ outlook as the market assesses further tightening risks as we approach the June meeting and into H2.

AUSTRALIA:

• The RBA left rates at 4.35% and maintained a neutral stance at its May meeting. However, a rate hike was discussed and inflation forecasts revised up in 2024. Governor Bullock said that she thinks the Board has rates at the right level but they will hike again if they must, especially if services prices get “stuck”. It remains “vigilant to upside risks”.
• Q1 retail sales volumes fell 0.4% q/q confirming that private consumption is weak, especially discretionary spending.
• The federal budget is released on May 14 and the Treasurer faces pressures to contain inflation but also support growth.

NEW ZEALAND:

• April SEEK data showed a large drop in vacancies and increase in applicants per job ad driven by a sharp increase in the labour supply.

CHINA:

• China trade figures for April were better than forecast, particularly on the import side. This points to some resilience in terms of the domestic demand backdrop. The other focus point has been easing housing restrictions in a number of major cities. Our China policy team expects this trend to continue. Such a backdrop has buoyed equity related sentiment in the housing space this past week.

PHILIPPINES:

• Philippines CPI and GDP printed this week. CPI was a touch weaker than forecast, while GDP was close to expectations. Still, the GDP print showed domestic demand cooling. This should be enough to see the BSP hold steady at next week’s policy meeting.

ASIA EQUITY FLOWS:

• China equity market flows have been mixed over the past week, Thursday saw an inflow of 8b yuan to take the total for the past 5 trading sessions to 2.5b yuan, with the CSI300 up 1.12% over the same period, and is on track to close the week above the 200-day EMA, a level which we haven't been able to hold above since August 2023. Looking ahead to the coming week CPI is due out on Saturday, with consensus at 0.2%, up from 0.1% in March and Industrial Production and Retail Sales next Friday.

See the attached below for more details.

weekly macro round up (May 10 2024) .pdf