June 14, 2024 06:13 GMT
MNI Asia Pac Weekly Macro Wrap
A round up of some of the key Asia Pac market developments from the past week.
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.
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