MNI Asia Pac Weekly Macro Wrap

EXECUTIVE SUMMARY

JAPAN

• Offshore investors returned to the Japanese equity market buying a net ¥80.0bn last week. We saw some Japanese purchases of offshore bonds.

AUSTRALIA

• The RBA left rates at 4.35% at its June meeting but the tone was more hawkish. A rate hike was discussed again and the Board will “remain vigilant to upside risks to inflation”. Rates are likely to stay “higher for longer” to return inflation to target.

NEW ZEALAND

• Q1 GDP was slightly stronger than expected rising 0.2% q/q to be up 0.3% y/y, which was in line with the RBNZ’s projection. Consumption was strong on the quarter but investment and net exports were a drag on growth.
• As a share of GDP the current account deficit in the year to March moderated slightly to 6.8%, while still elevated it is a 2pp improvement from its peak.

SHORT TERM RATES

• As it currently stands, the RBA-dated OIS market attaches a 23% chance of a 25bp hike in August, with an expected terminal rate of 4.38%.

CHINA

• May data showed stronger-than-expected retail sales but weaker IP growth and a struggling property market. However, China’s statistics bureau expects the economy, including domestic demand, to continue its recovery despite challenges.

ASEAN

• Bank Indonesia has been concerned that the depreciation in the rupiah will add to inflation through the import channel. Looking at the NEER, import price inflation is likely to rise further in the months ahead.
• Indonesia is seeing some improvement in trade trends helped by a rising terms of trade but exports to key export market China remain weak.

ASIA EQUITY FLOWS

• Asian technology stocks continue to see inflows.

See the attached below for more details.

weekly macro round up (June 20 2024) .pdf