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The latest PMI data support our view that growth in China remains strong. However, the People’s Bank appears to disagree, with potentially major implications for the policy outlook. … People’s Bank signals sharp growth slowdown in …
2nd November 2009
This report is only available as a PDF. Click to download. … Indonesia on course for return to investment grade …
The recovery in the Thai economy gathered momentum in the third quarter, boosted by investment and household consumption. While growth is likely to stay strong in the final quarter and over 2010 we still think the Bank of Thailand will keep rates on hold …
30th October 2009
The Bank of Japan has announced a timetable for the withdrawal of some emergency facilities that have become increasingly redundant. But the Bank’s own forecasts of persistent deflation confirm that the most important monetary stimulus (in the form of …
The Reserve Bank of New Zealand (RBNZ), as expected, left its cash rate unchanged at 2.5%. More surprisingly, the RBNZ also remained committed to keeping rates low into the second half of 2010, an extremely cautious stance probably aimed at holding back …
29th October 2009
Vietnam’s central bank today confirmed that its key base rate will be left unchanged for the rest of 2009. But rate hikes look necessary from early 2010 and the policy tightening next year is likely to be the most aggressive in Asia. We are forecasting …
28th October 2009
Bank Negara, as expected, kept policy rates unchanged today and will likely keep rates low for a long time. Malaysia’s upswing is less established and inflation pressures are low, especially when compared to Korea and India which are likely to hike rates …
Our China Activity Proxy (CAP) suggests that seasonally-adjusted, q/q growth in China’s economy has peaked, but growth is expected to remain strong for some time. … China’s growth …
27th October 2009
India’s Reserve Bank (RBI) kept its key policy rates unchanged today, but also put the markets on notice to expect monetary tightening soon. Worries about the recovery are diminishing fast and the RBI’s inflation forecast has been raised. We expect that a …
Korea’s Q3 GDP, published overnight, surprised on the upside yet again. The economy is unlikely to grow so strongly in coming quarters but continued recovery is not in doubt. The Bank of Korea’s policy rate now looks too low at 2.0% and we expect that a …
26th October 2009
This report is only available as a PDF. Click to download. … India and Vietnam in next wave to hike after Australia …
Today’s 2010 budget aims to cut the fiscal deficit but Malaysia’s move to the exit will be more of a stroll than a sprint. Lower personal tax rates and higher relief on incomes will support household spending. Partly as a result, the GDP upswing is likely …
23rd October 2009
Looking beyond the headline year-on-year figures, Japan’s export volumes jumped again in the third quarter. The strength of the yen is not an insurmountable hurdle as long as global demand is rebounding, although exporters’ margins are being squeezed to …
22nd October 2009
Nearly a year after exports collapsed, China’s economy is once again expanding at a frenetic pace. There are medium term risks in the form of industrial overcapacity, weaker banks and the threat that lending growth coupled with possible hot capital …
Economic upswings across the region have remained strong and, although inflation pressures remain generally low, asset price concerns are climbing and the need to keep policy rates at super-loose levels is steadily diminishing. After Australia, we expect …
21st October 2009
The Bank of Thailand left policy interest rates on hold at 1.25% today, as was widely expected. Although the economic recovery is gaining some traction, there is little risk that inflation will develop into a problem anytime soon. We expect rates to …
This report is only available as a PDF. Click to download. … Is it time to rein in China’s stimulus? …
19th October 2009
China’s foreign exchange purchases, and hot inflows into its economy, have steadied. But they are likely to rise in the months ahead, adding to the threat of asset price bubbles next year. … China’s hot money worries set to …
14th October 2009
There was no let-up last month in the lending growth that is fuelling China’s stimulus. For now, the Chinese recovery is benefitting the rest of the world through stronger imports. But as commodity stockpiling eases, the trade surplus will rebound and …
The Bank of Japan’s silence on when it will end its purchases of bank-owned corporate debt is being interpreted by some as a lack of faith in the recovery and by others as a response to government pressure. To our mind, it was simply too soon to expect an …
Business conditions in China improved across the board in Q3, but small and privately-owned firms are far less exuberant than their large and state-owned counterparts. … Business conditions continue to improve in …
13th October 2009
Asia’s second Q3 GDP release showed Singapore’s recovery remained powerful. We expect the upswing to stay strong for some time, even though manufacturing will be thrown around by the volatile biomedicals sector, and external conditions will likely …
12th October 2009
This report is only available as a PDF. Click to download. … Singapore set to soar but risks hang over 2010 …
The Bank of Korea (BoK) left its policy rate unchanged today, as expected. Mortgage lending curbs are tackling property bubble concerns and core inflation will likely trend lower. Korea’s GDP recovery should be sustained and strong but a fiscal tightening …
9th October 2009
The improvement in the main balances of Japan’s Economy Watchers Survey in September is a relief after the dips in the previous one-two months. Indeed, these balances are now back at levels last seen in 2007, when the economy grew by 2.3%. … Near-term …
8th October 2009
The rupee has climbed 3% against the US dollar over the last few days which, by recent standards, is a big move. We have long expected the appreciation and more looks on the way as India’s balance of payments continues to improve and as the Reserve Bank …
7th October 2009
The Reserve Bank of Australia (RBA) raised its cash rate to 3.25% today, sooner than most had expected. Markets are now pricing in further rate rises back up to a “neutral” level of 5.0-5.5% by late 2010. We are not so convinced. Super-loose policy rates …
6th October 2009
Bank Indonesia (BI) left its overnight lending rate at 6.5% today, as expected, and retained its neutral bias. But inflation looks set to rise sharply over the next few months and we believe that the BI will need to hike by January next year, well ahead …
5th October 2009
This report is only available as a PDF. Click to download. … Bank of Korea to take back seat as fiscal policy set to tighten …
Asia’s PMI releases today add to the weight of evidence that Asia’s recovery has plenty of positive momentum. … PMIs add to impression of Asian …
1st October 2009
Today the Philippines’ central bank, as expected, left its policy rate unchanged at 4% and retained a neutral bias. The economic impact of Tropical Storm Ketsana should be small and the GDP upswing is likely to be strong. Policy rates will probably move …
The Bank of Japan’s September Tankan survey released today showed a further improvement in the business conditions faced by large manufacturers and large non-manufacturers. But the pick-up in sentiment amongst smaller companies, which are most focused on …
Thailand’s recovery faltered in August but GDP still looks on track to climb in Q3. Investment and household spending will continue to lead the way and will offset yet another drag from net exports. … Thailand’s recovery still up and running, but pauses …
30th September 2009
Vietnam is always the first in Asia to publish quarterly GDP and the Q3 data published today showed that its economic recovery is gaining strength. The improvement, as in China, is coming on the back of a big expansion of credit to the state sector and to …
29th September 2009
Our China Activity Proxy (CAP) suggests that China’s economy expanded at an annualised pace of 15% over the summer. With many companies only just starting to spend the proceeds of loans, rapid growth is set to continue for months to come. … China still …
28th September 2009
This report is only available as a PDF. Click to download. … India still set to lead Asian policy rates higher …
The Bank of Japan’s quarterly Tankan survey (released on 1st October) will show a marked improvement in business conditions faced by large manufacturers. However, a rebound in sentiment among smaller companies, and in non-manufacturing, would be much more …
25th September 2009
With deflation still a lingering threat, interest rates will probably remain at their current low level in Taiwan until well after they start to climb elsewhere in the region. … Deflation threat to keep Taiwan rates on prolonged …
24th September 2009
As usual, the headlines today have focused on the continued weakness of Japanese exports in year-onyear terms. But the more revealing monthly profile shows a sixth successive increase. … Japanese exports continue to …
Today’s data show New Zealand left recession behind in Q2 2009, when GDP climbed in q/q terms for the first time since Q4 2007. Sustained recovery should be expected but the upswing will probably be weak. The economy remains too dependent on household …
23rd September 2009
GDP growth across the region is likely to stay strong over the next few quarters as foreign conditions continue to improve and domestic demand stays resilient. Sustained capital inflows, higher external surpluses, and the prospect that central bank policy …
21st September 2009
This report is only available as a PDF. Click to download. … Further currency appreciation on the way …
The Vietnamese economy grew rapidly from 1995 to mid-2008 on the back of China-style free market reforms which have lifted exports and foreign investment, and brought a big reduction in poverty levels. Vietnam’s progress has been interrupted since …
16th September 2009
China’s August data provided further evidence that the upswing in activity is still gathering pace. Savers are moving funds to easier-to-access demand accounts, and lending is still growing rapidly, both of which suggest that activity will remain strong …
14th September 2009
This report is only available as a PDF. Click to download. … Asia heading for a strong and (mostly) sustained recovery …
China’s monthly data for August support our view that the economy is still accelerating. The current structure of growth may be unsustainable in the long-run, but the government appears unwilling to instruct state-owned backs to ease up on lending until …
11th September 2009
The Reserve Bank of New Zealand (RBNZ) left its policy rate unchanged at 2.5% today, as expected. The RBNZ appears to share our view that the durability of the GDP upswing, after an improvement over the next few quarters, is very uncertain. The official …
10th September 2009
The Bank of Korea (BoK) left its policy rate unchanged today. Property price concerns and improvements in the activity data have increased the chance that the BoK will raise rates sooner rather than later. But core inflation should trend lower over the …
This report is only available as a PDF. Click to download. … Korea’s upswing is fragile and set to weaken …
7th September 2009
Bank Indonesia (BI), as expected, today left its overnight lending rate at 6.5%, the first no change since mid-2008. The policy statement was neutral. BI is now more confident that Indonesia’s upswing will be sustained and strong but still expects …
3rd September 2009
