Article14 May 2019Reading time 3 minutes

ASEAN Morning Bytes

General market tone: Risk-off.

Escalation of US-China trade rift is seen to keep market players on the sidelines on Tuesday.

In this article

EM Space: It’s tit-for-tat as Beijing slaps tariffs on American imports

  • General Asia:  Trade war escalation with Beijing retaliating with tariffs on US goods is seen to send market players to head for cover in trading today.  Meanwhile, Fed officials took on a dovish tone with President Rosengren indicating rates may be cut if the trade rift leads to slower growth.    
  • Indonesia:  Bank Indonesia is likely to be in the market today to stabilize the currency (IDR) as emerging market currencies look poised for a sell-off amid an escalation of US-China trade tension. It may buy a “sizeable” amount of bonds in order to support the IDR. 
  • Thailand: The Bank of Thailand issued a statement yesterday denying any currency manipulation on its part to gain trade advantage. The central bank’s clarification comes just ahead of the release of the US Treasury’s semi-annual currency manipulator report later this month, which is feared to include Thailand on the watch list for currency manipulators. The THB has re-asserted its outperformer status even in the latest market rout triggered by escalation of the US-China trade tensions, as it continues to be backed by wide current surplus and the Bank of Thailand’s hawkish policy stance.
  • Philippines: Mid-term elections were held on May 13 with the ruling coalition seen securing several spots in the upper and lower house. President Duterte looks to solidify his grip on the legislative houses in order to push for economic reforms such as the remaining packages of his tax reform agenda.    

What to look out for: Lots of trade data from Asia

  •          China’s April economic data (15 May)
  •          EU revised 1Q19 GDP (15 May)
  •          India April trade (15 May)
  •          Indonesia April trade (15 May)
  •          Philippines March OCW remittances (15 May)
  •          US April retail sales and industrial production (15 May)
  •          Bank Indonesia policy decision (16 May)
  •          Malaysia 1Q19 GDP and balance of payments (16 May)
  •          Singapore April NODX (17 May)