ASEAN Morning Bytes
General market tone: Wait and watch.
With increased odds of the Fed easing, it’s hard to see Asian central banks resisting easing pressure for too long now.
EM Space: Market looks to FOMC decision but strong US retail sales could stay the cut for now
- General Asia: Heavy global and Asian central bank calendar makes it an exciting week amid persisting headwind to risky assets from the US-China trade war. The key focus will be on the US Fed's policy statement which is widely expected to signal an easing bias. And with increased odds of the Fed easing, it’s hard to see Asian central banks resisting easing pressure for too long now.
- Thailand: Somchai Jitsuchon, member of the Bank of Thailand’s monetary policy committee signaled that the central bank policy would be data dependent. He pointed to fallouts of the US-China trade war on Thailand’s economy, leaving the central bank “open to all possibilities”. With sub-3% GDP growth and low inflation, the case for the BoT reversing its late-2018 rate hike has become stronger, in our view. We expect a 25bp BoT rate cut at the 26 June meeting.
- Malaysia: Bank Negara Malaysia’s Governor Nor Shamsiah Mohd Yunus anticipates increased MYR volatility ahead amid growing global uncertainty. But she also expressed confidence in Malaysia’s ‘proven track record in managing these shocks well”. The economy is performing relatively well compared with Asian neighbours and this supports positive sentiment towards the MYR, in our view.
- Philippines: The current account deficit of $1.2bn in 1Q19 was a fourfold widening from a year ago, thanks to the continued widening of the goods trade deficit. The BSP's report today of April overseas workers' remittances will provide a glimpse of where the current account deficit is headed in the current quarter. Widening current deficit will continue to exert pressure on the PHP although the BSP appears more dovish despite these developments and is likely to leave policy on hold on Thursday.
What to look out for: Central bank super Thursday
- Singapore non-oil exports (17 June)
- Philippines remittances (17 June)
- Germany ZEW expectations (18 June)
- Hong Kong composite interest rates (19 June)
- FOMC meeting (19 June)
- BoJ meeting (20 June)
- Bank Indonesia meeting (20 June)
- Taiwan central bank meeting (20 June)
- Bangko Sentral Pilipinas meeting (20 June)
- BoE meeting (20 June)
Download
Download article
17 June 2019
Good MornING Asia - 17 June 2019 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).