September 27, 2024 06:06 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
- Late this week focus in Japan is on the LDP leadership race, which is now down to two - Sanae Takaichi (a BoJ dove) and Shigeru Ishiba, who will face off in a run off soon. USD/JPY has risen to fresh highs for the week with Takaichi seen as favourite in the run off. Tokyo CPI, also out today, was in line with market expectations.
AUSTRALIA
- The RBA kept rates unchanged at 4.35% as was unanimously expected and noted that information since the August meeting hadn’t changed the outlook “materially”. The format of the September discussion changed with the focus on what was different since the August meeting and what would need to happen for rates to be moved in either direction. As a result, the explicit rate hike consideration was dropped and the RBA seems firmly on hold.
- Headline CPI fell in August to 2.7% y/y from 3.5%, as expected, but as the RBA said in its September statement it is currently impacted by temporary factors. It should be reassured though by the moderation in the underlying measures but the drop in services inflation was limited and it remains elevated.
SHORT TERM RATES
- Year-end official rate expectations softened over the past ten days in the US (-9bps) and New Zealand (-6bps), edged up in Canada (+3bps), and remained unchanged in Australia.
CHINA
- China’s central bank announced a series of policy changes aimed at supporting the ailing economy and reaching the government’s 5% growth target. PBOC governor Pan Gonsheng announced a cut to the short-term interest rate, lowering of mortgage rates and a reduction of the Reserve Requirement Ratio (“RRR”). China equities have risen to fresh highs for 2024.
SOUTH KOREA
- South Korean data has been mixed this past week. Export growth appears to be holding up, while retail sales have also recovered some ground. The PPI was softer, while consumer sentiment eased.
ASIA
- Malaysia CPI moderated, but Singapore’s firmed, suggesting little need for a MAS shift at the upcoming policy meeting. Indian PMIs continued to indicate a healthy expansion.
ASIA EQUITY FLOWS
- Taiwan has continued to strong run lately with its largest inflow since Aug 16, while Indonesia & Philippines have ended their multi-week run on inflows.
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