ASEAN Morning Bytes
Market players brace for another week of rough sailing as the virus spreads globally
EM Space: Markets brace for full impact of virus as Covid-19 spreads across the globe
- General Asia: Regional PMI manufacturing data has come out as a mixed bag already. Though with no results as bad as those reported by China over the weekend. Markets will likely be in for a rough ride on Monday as the virus continues to spread across the globe and more importantly, now in the United States. Despite dovish comments from central bankers, the full-frontal impact from the virus is yet to be felt with safe-haven demand expected to keep bond yields lower.
- Malaysia: Has political standoff really ended? The King appointed former interior minister Muhyiddin Yassin as eighth Prime Minister, taking over the reins from Mahathir Mohamad. However, Mahathir still claims to have majority support to form the government and has called for an urgent parliamentary session to prove this. We expect investors to stay on the sidelines until the political dust settles completely. And, with the prospects of any fiscal stimulus continuing to be dim, the central bank (BNM) will have to do all heavy-lifting to support the economy. We expect a 25bp BNM rate cut on Tuesday (3 March).
- Thailand: The Bank of Thailand’s pursuit of weak currency (THB) continues. Effective today, the central bank allows businesses to hold back abroad up to $1 million of their foreign earnings, both exports proceeds and other income, up from the earlier limit of $200,000. The THB has been already a worst-performing emerging market currency so far this year with about a 5% depreciation. We don’t expect the latest measures to cause a further dent. Meanwhile, February CPI data is likely to show slower inflation of 0.8% than 1.1% in January, paving way for another BoT rate cut at the March meeting.
- Indonesia: Indonesia will be reporting inflation for February with the market looking at price gains to settle well within target at 2.9%, picking up slightly from 2.7% the previous month. We, however, do not expect Bank Indonesia (BI) to be able to cut policy rates in the near term given the recent heightened risk-off tone although Governor Warjiyo will likely keep an accommodative stance to help support sagging growth momentum with Covid-19 expected to hurt the export and manufacturing sectors.
What to look out for: Regional PMI and Covid-19
- Regional PMI manufacturing (2 March)
- Indonesia inflation (2 March)
- Hong Kong retail sales (2 March)
- US ISM manufacturing (2 March)
- Malaysia BNM policy rate meeting (3 March)
- Singapore PMI manufacturing (3 March)
- China Caixin PMI services (4 March)
- Malaysia trade (4 March)
- Philippines inflation (5 March)
- Thailand inflation (5 March)
- US initial jobless claims (5 March)
- Taiwan inflation (6 March)
US trade balance and jobs report (6 March)
Download
Download article
2 March 2020
Good MornING Asia - 2 March 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).