ASEAN Morning Bytes
Risk sentiment is on the mend with investors looking past the economic impact of the virus
EM Space: Asian markets to tiptoe higher on hopes for quick recovery
- General Asia: Emerging markets are set to inch higher with investors betting on a quick recovery from the virus episode. Meanwhile, disappointing growth figures from the region (Malaysia and Taiwan) could spur further stimulus call to support growth in 2020. US inflation and China’s domestic liquidity reports should give investors further impetus to trade on.
- Malaysia: BNM Governor Shamsiah Mohd Yunus told media at the GDP release yesterday that the central bank had ‘ample room’ for further monetary easing as inflation continued to be subdued. We now expect two more 25bp BNM rate cuts at each of its March and May meetings. This would take the OPR down to 2.25%, just shy of the 2% low reached during the global financial crisis a decade ago (read more here).
- Thailand: Deputy Prime Minister Somkid Satusripitak sees GDP growth slumping below 1% in the first quarter, noting the impact of the coronavirus denting Chinese tourist arrivals. He is hopeful of spending from the delayed budget helping the recovery in the second half of the year. We expect the Bank of Thailand to cut rates by another 25bp in March, the second rate cut this year, though it could do more as inflation would remain low throughout the year.
- Indonesia: Moody’s affirmed the Baa2 rating with stable outlook for Indonesia, citing stable economic growth and the country’s manageable debt and fiscal discipline. Meanwhile, President Jokowi plans to limit steel imports via non-tariff measures in order to help bolster the country’s steel industry. The President noted the still wide current account deficit with the trade balance an integral reason for the external vulnerability.
What to look out for: Developments on the virus and US retail sales
- US inflation and initial jobless claims (13 February)
- US retail sales and consumer sentiment (14 February)
Download
Download article
13 February 2020
Good MornING Asia - 13 February 2020 This bundle contains {bundle_entries}{/bundle_entries} articles"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).