MNI Asia Pac Weekly Macro Wrap

EXECUTIVE SUMMARY

Japan

• The BoJ left rates on hold as expected. It also announced plans to curb bond buying but will announce details at the July policy meeting. This saw USD/JPY push to fresh multi-week highs. JGB futures also spiked, but unwound part of this move. Earlier this week data showed local investors dumping offshore bonds.

AUSTRALIA

• May data showed that the labour market remains tight with solid job gains and the unemployment rate easing to 4%. There was a 0.1pp deterioration in the underemployment rate which has been rising gradually. The update is unlikely to change the RBA’s stance at its June 18 meeting.
• The May NAB business survey showed deteriorating confidence and conditions but the price & cost measures were concerning showing a material pickup.

NEW ZEALAND

• May card spending data confirmed that consumption weakened in Q2. The retail quarterly average is down 1.9% q/q. Discretionary spending was weaker than for essential items.

SHORT TERM RATES

• STIR markets within the $-bloc are little changed over the past week, with year-end official rate expectations unchanged in Canada, Australia and NZ and 5bps firmer in the US.

CHINA

• China inflation data suggested a modest domestic demand backdrop persists. The yuan remains under pressure, but depreciation pressures remain very modest. China equity underperformance has continued this past week.

SOUTH KOREA

• South Korea’s first 10-days trade data for June pointed to a slight easing in export growth. The unemployment rate was steady in May, but jobs growth is slowing.

ASEAN

• The Bank of Thailand left rates unchanged but the number of votes for a rate cut fell to one from two at the previous two meetings. Forecasts were largely unaltered with only core inflation revised down slightly for 2024.
• Indonesian markets were spooked on Friday by reported plans for incoming President Prabowo to boost the debt to GDP ratio to 50%.

ASIA EQUITY FLOWS

• Equity flows recovered through the tail end of the week, although more so for tech sensitive markets.

See the attached below for more details.

weekly macro round up (June 14 2024) .pdf