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MNI Asia Pac Weekly Macro Wrap

EXECUTIVE SUMMARY

JAPAN

  • Japan June national inflation data didn’t give any fresh impetus to the near term BoJ outlook. The market consensus looks for no change at the July meeting. USD/JPY has remained volatile, but dips have been supported in recent sessions.

AUSTRALIA

  • Australian June jobs data showed that the labour market remains tight with only a slight easing of conditions in Q2. The economy was strong enough to provide jobs for 80% of the entrants into the labour force and hours worked rose 1.6% q/q.
  • The April/May CPI data make it unlikely that Australia will see inflation follow NZ’s in Q2 but the quarterly increase in the non-tradeables component could moderate.

NEW ZEALAND

  • Q2 headline and core CPI inflation made significant progress in returning to the RBNZ’s 1-3% band but the domestically-driven non-tradeables component continued to post solid increases. This makes an August rate cut unlikely but a number of forecasters brought the start of easing forward to November following the data.

SHORT TERM RATES

  • STIR markets within the $-bloc have softened slightly over the past week, with New Zealand outperforming. The NZ-AU 1Y3M Differential hits its lowest level since Sep 2020.

CHINA

  • Q2 growth figures disappointed this week. This has kept the market focus firmly on additional stimulus measures. Details are filtering out from the Third Plenum, although no large scale stimulus is expected at this stage.

ASIA EQUITY FLOWS

  • Foreign investors have dumped Taiwan equities this past week as geopolitical risks increase.

GLOBAL

  • OECD headline inflation looks set to have moderated further in June with most countries reporting a decline and if not it has been stable. Core has been more mixed. Non-Japan Asian inflation has been fairly stable since March, and with core below 2% should allow monetary easing to begin once the Fed cuts.
  • Many of the factors that pressured headline inflation lower have stabilized or are now inflationary though, such as shipping costs and oil. Supply-chain pressures are now close to neutral.

See the attached below for more details.

weekly macro round up (July 19 2024) .pdf

AnalysisAnalysisCommoditiesAnalysisEM Market AnalysisEmerging Market NewsMarketsCredit
AnalysisAnalysisCommoditiesAnalysisEM Market AnalysisEmerging Market NewsMarketsCredit

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