ASEAN Morning Bytes
General market tone: Risk-off.
Investors to move sideways with a downward bias, digesting trade war concerns and the Fed beige book
EM Space: More Asian central banks joining in the global easing wave
- General Asia: Asian markets will likely move sideways with persistent downward bias from trading in the US market. The central banks in Korea and Indonesia are meeting to review their monetary policies today. We see both cutting the policy rates by 25bp.
- Thailand: As we argued last week’s move by the Bank of Thailand to tighten rules on capital inflows in its bid to rein in THB appreciation aren’t enough. Indeed, the central bank is considering more curbs. At his quarterly briefing yesterday Governor Veerathai Santiprabhob pointed to the reduction of bond supply among tools they could use for the purpose. Separately, Deputy Governor Mathee Supapongse hinted at easing rules on capital outflows. Any efforts to curb THB appreciation pressure are countered by the USD weakness as the Fed policy rate cuts loom, though a BoT policy rate cut may help to some extent.
- Indonesia: Bank Indonesia's (BI) policy decision is expected by 2 pm local time today. We are part of the solid consensus in the Bloomberg survey forecasting BI to slash policy rates by 25bp. The IDR has been performing better this year, while BI's aggressive tightening in 2018 has created room for more easier policy ahead to support growth as inflation continues to be well-behaved.
- Philippines: The government is looking to make adjustments to its recently implemented rice tariff law as the agricultural lobby groups decry the falling farmgate prices for the staple. The new law which allows unimpeded rice imports to help stabilize supply has forced rice prices lower, which in turn has helped push headline CPI inflation within the BSP's policy target. The government intends to study implementing a suggested retail price for imported rice, which could stall the recent precipitous drop in rice prices and temper headline inflation’s deceleration.
What to look out for: regional central bank meetings
- Hong Kong policy meeting (18 July)
- South Korea policy meeting (18 July)
- Fed Bostic speech (18 July)
- Bank Indonesia policy meeting (18 July)
- Japan inflation (19 July )
- Fed Williams and Bullard speeches (19 July)
Download
Download article
18 July 2019
Good MornING Asia - 18 July 2019 This bundle contains 2 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).