ASEAN Morning Bytes
Investors look to stimulus from governments to support economies likely to be battered by the COVID-19 fallout
EM Space: With US markets out on a holiday, focus shifts to regional GDP
- General Asia: COVID-19 should remain a major trading theme for the session with investors looking out for the size and scope of stimulus from governments from developed markets and the emerging markets sphere. With the fatality count rising outside China, traders are bracing for a long drawn out battle with the virus. Regional GDP will be reported on Monday with investors awaiting FOMC minutes later in the session for guidance on the Fed’s possible next move.
- Singapore: The final estimate confirmed the 4Q19 GDP growth of 1.0% YoY, better than 0.8% in the advance estimate and bringing the full-year growth to 0.7%, the slowest since the GFC. The Ministry of Trade and Industry downgraded its forecast for 2020 growth to -0.5% to 1.5% range from 0.5% to 2.5% earlier as the coronavirus depresses trade and tourism. However, the MAS affirmed the current monetary stance. All eyes are on the 2020 budget to be announced tomorrow. We are looking for a record deficit of about 2% of GDP as the authorities are dealing with an unprecedented crisis that calls for an unprecedented response. Not just fiscal support but we also think the MAS will contribute to damage control by easing policy in April (read more here).
- Thailand: 4Q GDP is due today with consensus centred on 2% YoY growth, a slowdown from 2.4% in the previous quarter. The risk remains tilted to the downside (ING forecast 1.8%). We expect growth to stay on a steady downward trend in the next few quarters as the virus depresses tourism. The Bank of Thailand resumed its easing cycle with a 25bp rate cut in January. We expect one more cut at the next policy meeting in March. Meanwhile, parliament finally passed the FY2020 Budget Bill, opening doors for fiscal support.
- Indonesia: Indonesia reports January trade figures later in the session with investors expecting a widening of the trade gap with export growth modest although import compression is still forecast by analysts. The trade gap will likely widen in the coming months as export growth dries up given the impending global slowdown from the fallout from COVID-19. The IDR could face renewed pressure if concerns about the current account gap re-surface with Bank Indonesia attempting to time a rate cut to cushion the economy from the COVID-19 trade slump.
What to look out for: regional growth numbers, FOMC minutes
- Singapore GDP and non-oil exports (17 February)
- Thailand GDP (17 February)
- Indonesia trade (17 February)
- Philippines OFW remittances (17 February)
- US empire manufacturing (18 February)
- US housing starts and PPI (19 February)
- Fed Bostic and Mester speeches (19 February)
- Fed Kaplan, Barkin and Kashkari speeches (20 February)
- Bank Indonesia policy (20 February)
- FOMC minutes (20 February)
- Malaysia inflation (21 February)
- US existing home sales (21 February)
Download
Download article
17 February 2020
Good MornING Asia - 17 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).