November 01, 2024 06:07 GMT
MNI Asia Pac Weekly Macro Wrap
A weekly wrap of some of the key Asia Pac macro events and themes.
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MNI (SYDNEY) - Executive Summary:
JAPAN
- Japan faces a period of political uncertainty after weekend lower house elections from Sunday showed the LDP coalition had lost its majority.
- As widely expected, the BoJ kept rates on hold at 0.25%. In terms of the central bank forecasts, for core CPI in financial year (FY) 2025, it was nudged down to 1.9% from 2.1% previously, the 2024 and 2026 forecasts at 2.5% and 1.9% respectively were unchanged.
- The bias is clearly for the BoJ to remove easy financial conditions further. BoJ Governor Ueda left the door ajar for a December hike.
AUSTRALIA
- Q3 trimmed mean inflation moderated to 3.5% as expected, while headline was heavily impacted by temporary electricity rebates and lower fuel prices. The details showed that services inflation remained sticky in both Q3 and September, which is likely to continue to concern the RBA. It is highly likely to be on hold in November and want to wait for another quarter of CPI data before considering easing.
- Other data were mixed with trade prices pointing to another terms of trade deterioration but real retail sales were positive and building approvals are recovering, while private credit growth remains solid.
NEW ZEALAND
- Q3 filled jobs fell 0.7% q/q signalling that not only has employment slowed but there are now job losses. Thus, the unemployment rate is likely to rise and employment contract in Wednesday's Q3 labour data.
- The October ANZ business survey showed that both current and expected activity is improving, although the present situation remains bleak. Inflation expectations eased but pricing intentions continued to drift higher, something the RBNZ is likely to monitor.
SHORT TERM RATES
- Except for Canada, STIR markets have firmed in the dollar-bloc over the past week
CHINA
- China data outcomes have generally been firmer than expected, with manufacturing PMIs moving back above 50.0. Focus is on next week’s NPC meeting, while fallout from the US election will also be key. USD/CNH implied short term vols have surged higher.
SOUTH KOREA
- Poor domestic data outcomes look set to nudge down BoK growth forecasts for this year. Export growth is also slowing. Rhetoric around FX weakness picked up from the authorities this week.
ASIA
- Pressure is still on Thailand’s BoT to have easier policy settings.
ASIA EQUITY FLOWS
- Equity outflows continued this week in the lead up to the US election next week.
GLOBAL
- August global trade volumes grew at their fastest annual pace since October 2022 with positive DM and EM export growth helping. Trade growth has been trending higher this year supporting IP.
PLEASE FIND THE FULL REPORT HERE: weekly macro round up (November 1 2024) .pdf
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