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The Philippines’ central bank (BSP) left the reverse repo rate unchanged at 4.0% today, as expected. The economic upswing should hold strong in coming months while the policy rate looks set to remain negative in real terms for a while. External threats to …
3rd June 2010
Bank Indonesia (BI) left rates at 6.50% today, as expected. The economic upswing will stay strong but the high level of the rupiah is helping to hold down prices. Nevertheless, inflation will probably accelerate sharply in the second half of 2010 and we …
Australia’s economy expanded for the fifth consecutive quarter in Q1 but at a slower pace than in late 2009. GDP should accelerate again soon with private sector investment set to take the lead. Policy interest rates will still probably rise in Q3 and are …
2nd June 2010
The Bank of Thailand (BoT) left its policy rate unchanged at 1.25% today, as was universally expected. The economy warrants higher rates but the political situation needs to stay calmer for longer. We still anticipate that the BoT will start to tighten at …
The Reserve Bank of Australia (RBA) held its cash rate at 4.50% today, as expected. The risk of an extended pause in policy rates has increased. Nevertheless, we still forecast that the next move will be up, and will most likely come through in August. … …
1st June 2010
The central bank of Vietnam (SBV) yesterday, as expected, announced that its key policy rate will stay unchanged at 8.0% during June. Nevertheless, the cash rate looks too low for an economy that will probably expand at a 7.0-7.5% pace in the second half …
Q1 GDP data published today were strong. Private sector spending will probably ensure that the economy continues to expand at an 8-9% pace in coming quarters, even as stimulatory policies are withdrawn. The Reserve Bank (RBI) appears too concerned about …
31st May 2010
It will probably be India’s turn on Monday to report another spectacularly strong Q1 GDP gain – we think that the economy expanded by 9.5% y/y. There is little doubt that the upswing will continue and should stay impressive in coming quarters. Private …
We expect the world recovery will lose momentum in 2010-11 but do not anticipate that the recent turmoil in the markets will derail the global upswing. The implication for Asia is that the regional rebound will slow rather than stall and it remains likely …
27th May 2010
Today it was the turn of the Philippines to publish impressive Q1 GDP data. Base effects played a part but q/q growth was rapid too. The economic recovery is on solid foundations and will stay strong even as stimulatory policies are withdrawn. The first …
The State Bank of Pakistan (SBP) today, as expected, left its policy rate unchanged at 12.50%. We forecast that rates will be kept on hold into 2011. The economic upswing should continue but inflation will probably remain too high while financing the …
24th May 2010
Q1 GDP in Thailand, published today, beat expectations but the most significant announcement in recent days was one from the Finance Minister, who stated that the government was “highly unlikely” to serve its full term in office. The holding of early …
The central bank in Vietnam will set interest rates for June over the next few days and will probably keep the base rate unchanged at 8.00%, rather than move rates up. The easing of credit conditions, following the clampdown in Q1 which ended up being too …
Today’s Budget in New Zealand aims to boost savings and business spending, whilst pulling back consumption and investment in the property market. The target is to eliminate the budget deficit by 2015/16, but the GDP forecast beyond 2010-11 looks too …
20th May 2010
Taiwan’s economy will be one of the world’s best performers in 2010, but underlying structural problems will increasingly weigh on growth as the year goes on. … Taiwan on top of the world, but not for …
Political unrest will continue in Thailand but we suspect that the level of instability will subside to where it was in 2006-09 when the economy was still able to perform reasonably well. We still forecast that GDP growth will be strong in 2010 and will …
Data from India released late last week showed inflation pressures remain high while the economic upswing has stayed strong. Further monetary tightening is only a matter of time and we expect that policy rates will be lifted 25bp in June, as well as in …
17th May 2010
The risk that the political instability is prolonged, and spreads beyond a small area of Bangkok, will stay very high for a while. Nevertheless, we continue to expect that the latest crisis will be resolved soon and that the conflict will not spread. …
A hike in the GST, and reforms designed to lift investment, will be the centrepiece of this week’s New Zealand budget. The changes overall are likely to be fiscally neutral in 2010-11 to help protect the economic upswing, which is still patchy and at an …
Bank Negara (BNM) today raised the overnight policy rate by 25bp to 2.5%, as expected, while the double-digit surge in GDP in Q1 has been confirmed. The economic upswing looks set to remain strong and BNM needs to tighten further to ensure that inflation …
13th May 2010
The Bank of Korea (BoK) left its policy rate at 2.0% today, as expected. The economy is picking up strongly and inflation pressures are rising. However, BoK Governor Kim is sympathetic to the government view that monetary tightening can be delayed. We …
12th May 2010
The new counting system was up to the job and the presidential election in the Philippines has produced a clear winner. The new government will target fiscal consolidation and measures to lift investment. We expect some good progress. Central bank policy …
Today’s Federal Budget in Australia was a low-key affair even in the context of an imminent general election which will be a close contest. The aim of moving back to a fiscal surplus by 2012-13, some three years ahead of the previous schedule, should be …
11th May 2010
Indonesia’s Q1 GDP growth accelerated to 5.7% y/y and all the key indicators point to a further pickup in coming quarters, with domestic private sector demand leading the way. Monetary tightening will probably start in Q3, which will hit bonds, but the …
10th May 2010
Malaysia’s central bank (BNM) will probably raise policy interest rates again this week, provided the debt crisis in the euro-zone periphery and the disorder in the markets does not escalate further. Malaysia, and the rest of Asia too, is well-positioned …
There is some uncertainty over whether the new counting system is up to the job but the 10th May presidential election in the Philippines should bring a clear-cut result. The new government will target fiscal consolidation and measures to lift investment. …
6th May 2010
Bank Indonesia (BI) left rates at 6.50% today, as expected. The upswing will stay strong but the high level of the rupiah is helping to keep inflation pressures contained. We now expect the first rate hike to be delayed until September, and then see rates …
5th May 2010
The Reserve Bank of Australia (RBA) lifted its cash rate to 4.50% today, as expected. Policy rates should move from neutral to being restrictive over the next 12 months, although rate hikes from now on will be less frequent. We expect the next hike to …
4th May 2010
The April manufacturing PMIs for emerging Asia (ex-China) were a mixed bunch and the "V-shaped" phase of the regional economic upswing has now largely worked through. But exports and industry should still remain on a strong track in coming months. …
3rd May 2010
Thailand data published over the last few days have been strong, with exports leading the way. The political situation remains volatile but we continue to expect that an agreement to hold new elections will be reached during May. Accordingly, we …
Australia’s Reserve Bank (RBA) meets on Tuesday and, although it is a close call, will probably lift the cash rate again by 25bp to 4.50%. This is now the markets’ view too. The economy is moving from recovery into a boom period at a time when spare …
The emerging Asia upswing continues to pick up speed, inflation has accelerated, and India has started to lift policy rates. In May, we expect that rates will move up again in Australia and Malaysia. Worries over contagion from Greece have curbed the rise …
30th April 2010
The Reserve Bank of New Zealand (RBNZ) held its cash rate at 2.50% overnight, as expected. In its guidance on future moves, the RBNZ stated that it would tighten in “coming months”, which means either June or July. It is not far from a coin-toss, but we …
29th April 2010
The central bank of Vietnam (SBV) today announced that its key policy rate will stay unchanged at 8.0% during May. Staying on hold was expected given that the authorities in Q1 engineered a sharper slowdown in credit growth than was originally intended. …
27th April 2010
Korea’s GDP accelerated in Q1 and growth is set to stay high in Q2. Inflation pressures should rise during the course of the year and the risk is that the Bank of Korea continues to move slowly and delays the start of monetary tightening for too long. We …
The central bank in Vietnam (SBV) should set interest rates for May over the next few days and will probably keep the base rate on hold at 8.00%. Monetary policy has been effectively tightened in recent weeks by the large move up in commercial bank …
26th April 2010
The Philippines central bank (BSP) left its key policy rate unchanged at 4.00%, as expected, but a first rate hike is now close. We expect a move at the next meeting on 3rd June once the 10th May presidential and congressional elections are out of the …
22nd April 2010
The Bank of Thailand (BoT) left its policy rate unchanged at 1.25% today, as was universally expected. The economy warrants higher rates but the political situation needs to calm first. We are not as confident as we were but still anticipate that the BoT …
21st April 2010
The minutes for the Reserve Bank of Australia (RBA) April meeting, released today, have underlined yet again that the outlook for the economy is very good. The cash rate is virtually certain to move up again soon, and the RBA will probably be the first …
20th April 2010
India raised its two policy interest rates by 25bp earlier today, which was in line with the consensus view but was less than our forecast of a 50bp hike. Nevertheless, we continue to believe that the Reserve Bank (RBI) is moving too slowly. Rates will …
Reports over the weekend suggest that Pakistan and the IMF have patched up their differences. Renewed funding under the Standby Agreement will help to sustain the economic upswing but inflation looks set to stay too high. Policy rates will probably remain …
19th April 2010
The Bank of Thailand (BoT) is virtually certain to leave the repo rate unchanged at 1.25% at its monetary policy meeting on Thursday. Economic conditions probably warrant a move up in the policy rate but the tense political situation is likely to keep the …
Wholesale price data released today in India were not as bad as widely expected. Nevertheless, the only uncertainty ahead of the 20th April monetary review meeting is whether policy rates move up by 25bp or by 50bp. We still expect that rates will be …
15th April 2010
Resumed renminbi appreciation against the dollar looks only a matter of time. Other currencies in Emerging Asia should rise too but the overall impact of a move by China should be small. The Korean won, Singapore dollar, and Indian rupee, should …
14th April 2010
Bank of Korea (BoK) Governor Kim shares the government view that policy rate rises should be delayed until the labour market improves significantly. The large employment gain in March, reported today, is a positive development but non-economic factors …
Preliminary Q1 GDP data from Singapore were stunningly strong and, as we had expected, encouraged the authorities to tighten monetary policy by allowing the currency to appreciate. Economic growth will almost certainly ease back during the rest of 2010 …
The shocking weekend events in Bangkok could make it more difficult to reach a compromise on the date of new elections, or may bring new urgency to the negotiations. We suspect that new elections will be agreed sooner rather than later. The tensions will …
12th April 2010
The Monetary Authority of Singapore (MAS) meets on Wednesday and, we forecast, will shift to an appreciation bias on the SGD nominal effective exchange rate. Q1 GDP growth was almost certainly very strong and inflation pressures are likely to rise during …
The Bank of Korea (BoK) left its policy rate at 2.00% today, as expected. New BoK Governor Kim is sympathetic to the government view that monetary tightening can be delayed, while imminent elections also lessen the likelihood of a rate hike soon. We still …
9th April 2010
Yesterday’s declaration of a state of emergency in Thailand could mark the start of a dangerous escalation in the confrontation between street protestors and the government. But while the stand-off will probably continue for a while, we still believe the …
8th April 2010
