ASEAN Morning Bytes
Tech rally overnight to help boost sentiment on Friday
EM Space: US fiscal stimulus could bolster markets to close out the week
- General Asia: Asian markets will likely open on a high note on Friday with investors reacting to the strong showing of the technology sector overnight. US President Biden’s rescue plan sparked a rally in equity markets with the stimulus set to lift the general economy in the coming months. Investors will be looking to US data on industrial production and consumer sentiment later on Friday for further direction with market players also waiting to see US consumers’ outlook on inflation.
- Malaysia: January industrial production (IP) data today comes as another test of the hit to the economy from the nationwide Covid-19 Movement Control Order (MCO 2) from mid-January. The first test was the trade data for January showing a significant tapering of export strength. We anticipate the same for Industrial Production. However, MCO 2 was much less restrictive for factories than MCO 1 a year ago. Therefore, the damage to production should be much smaller too -- we forecast a -10% MoM fall as against -30% MoM plunge last April. This will bring the year-on-year IP fall of -9.5% YoY, supporting our view of a steeper GDP fall in the current quarter (ING forecast -6.2% YoY vs. -3.4% in 4Q20). We don’t think this is going to sway Bank Negara Malaysia towards any policy easing this year, however.
- Philippines: January trade data is set for release today with market participants waiting to see if import demand has remained subdued given the ongoing recession. Soft corporate demand for the dollar has caused the overall current account balance to shift back into surplus over the past couple of months and has helped stabilize PHP. The continuation of this trend may translate to modest appreciation pressure for PHP in the near term with the current account surplus helping Bangko Sentral ng Pilipinas (BSP) build up its gross international reserves level to $109.1 bn in February.
What to look out for: Covid-19 developments
- Philippines trade balance (12 March)
- Malaysia industrial production (12 March)
- US industrial production (12 March)
- US University of Michigan sentiment (12 March)
"THINK Outside" is a collection of specially commissioned content from third-party sources, such as economic think-tanks and academic institutions, that ING deems reliable and from non-research departments within ING. ING Bank N.V. ("ING") uses these sources to expand the range of opinions you can find on the THINK website. Some of these sources are not the property of or managed by ING, and therefore ING cannot always guarantee the correctness, completeness, actuality and quality of such sources, nor the availability at any given time of the data and information provided, and ING cannot accept any liability in this respect, insofar as this is permissible pursuant to the applicable laws and regulations.
This publication does not necessarily reflect the ING house view. This publication has been prepared solely for information purposes without regard to any particular user's investment objectives, financial situation, or means. The information in the publication is not an investment recommendation and it is not investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Reasonable care has been taken to ensure that this publication is not untrue or misleading when published, but ING does not represent that it is accurate or complete. ING does not accept any liability for any direct, indirect or consequential loss arising from any use of this publication. Unless otherwise stated, any views, forecasts, or estimates are solely those of the author(s), as of the date of the publication and are subject to change without notice.
The distribution of this publication may be restricted by law or regulation in different jurisdictions and persons into whose possession this publication comes should inform themselves about, and observe, such restrictions.
Copyright and database rights protection exists in this report and it may not be reproduced, distributed or published by any person for any purpose without the prior express consent of ING. All rights are reserved.
ING Bank N.V. is authorised by the Dutch Central Bank and supervised by the European Central Bank (ECB), the Dutch Central Bank (DNB) and the Dutch Authority for the Financial Markets (AFM). ING Bank N.V. is incorporated in the Netherlands (Trade Register no. 33031431 Amsterdam).