ASEAN Morning Bytes
All about politics, little about economics push the markets in the risk-off mode.
| 1.25% |
Bank of Thailand policy rateING forecast with 25bp cut today |
EM Space: Will the Bank of Thailand cut rates again today?
- General Asia: Global risk aversion returns as democrats prepare to begin impeachment inquiry of President Trump, British Supreme Court rules parliament suspension unlawful, and the US-China trade tensions return into the news. The day in Asia will be marked by central bank policy decisions in New Zealand and Thailand.
- Indonesia: Finance Minister Sri Mulyani Indrawati pointed to persistent global headwinds challenging the government’s 5.3% growth assumption for 2020. She said, “A prolonged and escalating trade war between the US and China has created uncertainties that are becoming more unpredictable. Separately, director-general for financing and risk management at the finance ministry, Luky Alfirman, said the government budget for the current year was on track with the ‘frontloading’ strategy in the first half of the year. With inflation under control, we see a greater likelihood of the Bank Indonesia cutting rates again this year.
- Malaysia: August CPI is due. In line with consensus, we expect a slight uptick in inflation rate to 1.5% YoY from 1.4% in July. However, this is the result of a low base effect rather than underlying upward price pressure. More relevant for markets than the CPI data would be the FTSE Russell’s decision tomorrow on whether to keep the Malaysian government bonds in its global bond index. The uncertainty explains some of the recent bond market sell-off this month that has most of the 30bp fall in the 10-year MGS yields in August clawed back.
- Philippines: Speaking at Euromoney forum yesterday, BSP’s Governor Diokno vowed to keep inflation stable but he also ruled out any risk of the 2-4% inflation target despite the ongoing threat of oil price spike. Inflation drifted below the target to a three-year low of 1.7% in August, keeping the central bank on the path of easing. We anticipate another 25bp policy rate cut to 4.00% tomorrow.
- Thailand: The Bank of Thailand’s policy announcement is expected at 2 pm local time. Yesterday’s dismal manufacturing data for August showing a steeper-than-expected 4.4% fall in output forced another cut in our GDP growth forecast for the year to 2.5% from 2.8%, the third cut this year. This is why we buck the consensus with our view of a 25bp BoT policy rate cut to 1.25% today (read more here).
What to look out for: RBNZ, BSP, BoT policy meetings
- Malaysia CPI (25 Sep)
- New Zealand central bank meeting (25 Sep)
- Thailand central bank meeting (25 Sep)
- US New home sales (25 Sep)
- Philippines central bank meeting (26 Sep)
- Singapore manufacturing (26 Sep)
- US final 2Q19 GDP (26 Sep)
- China industrial profits (27 Sep)
- US durable goods and core PCE deflator (27 Sep)
Download
Download article
25 September 2019
Good MornING Asia - 25 September 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).