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MNI Asia Pac Weekly Macro Wrap

EXECUTIVE SUMMARY

JAPAN

  • Japan will have a new Prime Minister as incumbent PM Kishida will not seek a second term. Q2 GDP surprised on the upside, somewhat validating the recent hawkish BoJ shift. Yen spent the week softening though as global recession fears eased.

AUSTRALIA

  • July data showed that the labour market remains “quite tight” with employment in the year to date greater than for the same period in 2023. The unemployment rate ticked up 0.1pp to 4.2% as growth in the labour force continues to exceed the rise in new jobs. The RBA looks firmly on hold on for now.
  • Wages growth was broadly in line with expectations at 4.1% y/y in Q2 driven by stronger public sector pay while the private sector moderated.
  • Business and consumer surveys were consistent with sub-trend growth but not signalling a further deterioration. The NAB survey gave indications that it is getting harder for businesses to pass higher costs onto final product prices.

NEW ZEALAND

  • The RBNZ cut rates 25bp to 5.25% and made significant revisions to its GDP, CPI and OCR forecasts based on a material deterioration in higher frequency data. It was “confident” that inflation would return to the band in Q3 2024 due to greater excess capacity and inflation expectations declining to 2%, the band mid-point.

SHORT TERM RATES

  • NZ outperformed the $-Bloc after the RBNZ commenced its easing cycle.

CHINA

  • Growth concerns for China continue after this week’s housing/July activity data releases. Further policy stimulus is likely. Bond volatility continues but the path likely remains towards low or lower yields.

ASEAN

  • Philippines central bank kicked off its easing cycle, while Thailand political uncertainty returned. Singapore and Malaysia data outcomes were stronger than expected.

ASIA EQUITY FLOWS

  • Equities mostly recover from August 5 sell-off, but offshore flows are yet to fully return after sell-off (still running negative month to date for August).

See the attached below for more details.

weekly macro round up (August 16 2024).pdf

AnalysisAnalysisCommoditiesAnalysisEM Market AnalysisEmerging Market NewsMarketsCredit
AnalysisAnalysisCommoditiesAnalysisEM Market AnalysisEmerging Market NewsMarketsCredit

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