MNI Asia Pac Weekly Macro Wrap

EXECUTIVE SUMMARY

JAPAN

• Japan data on wages was better than forecast in terms of the headline result, although the same sample base figures were more mixed. Real household spending rose for the first time since February last year. USD/JPY is lower, largely thanks to softer US yields. Focus for next week is the BoJ meeting on Friday, with speculation the central bank could curb its bond buying program.

AUSTRALIA

• Q1 GDP confirmed that growth is weak rising only 0.1% q/q and 1.1% y/y. Net exports and capex weighed on growth, but household and government consumption were stronger than expected. The outcome would not have been a surprise to the RBA and so is unlikely to change its on hold stance. But productivity growth will remain a point of focus, as it was unchanged in Q1.
• RBA Governor Bullock answered questions from the senate and said that if inflation is stickier than projected the Board won’t hesitate to hike rates.
• Minimum wages will rise 3.75% on July 1, slightly above inflation.

NEW ZEALAND

• The NZ housing market is soft despite strong immigration with Q1 residential construction declining and CoreLogic house prices recording their second straight monthly drop in May.

SHORT TERM RATES

• STIR markets within the $-bloc have shown varied performances over the past two weeks with BoC leading the group in easing. The US and Canada have outperformed, softening by 12-13bps in year-end expectations, while Australia and NZ remain virtually unchanged.

CHINA

• China trade figures for May were mixed, exports firmer, but imports softer. Still commodity import volumes were generally positive for the month. Private PMI surveys pointed to a resilient economic backdrop this week. A survey of FX reserve managers suggested reluctance to add to yuan holdings in the current backdrop.

SOUTH KOREA

• South Korean inflation eased further, with core back close to the BoK’s target. PMI data for the country and Taiwan suggests a positive global trade backdrop in the near term.

ASEAN

• Headline and core CPI inflation for Indonesia and the Philippines were little changed in May, whereas Thailand saw a food and energy driven jump in headline while core remained unchanged and subdued. Higher-than-expected Thai inflation should help the central bank resist political pressure to cut rates at its June 12 meeting.
• The ASEAN S&P Global manufacturing PMI for May increased moderately to 51.7 from 51.0 with all countries posting results above the breakeven-50 level.

ASIA EQUITY FLOWS

• Equity inflows are still trending negative, although tech sensitive countries have seen a better flow backdrop in recent sessions.

See the attached below for more details.

weekly macro round up (June 7 2024) .pdf