ASEAN Morning Bytes
Hopeful trends emerge on the Covid-19 front but growth data later in the week should remind investors of the downturn ahead.
EM Space: Central bank meetings and GDP data to give cues for trading
- General Asia: Investor sentiment will take its cue from economic data reports from major markets in the coming week even as previous virus hotspots rollout plans to gradually reopen their economies. GDP data and meetings of key central banks will be the focus for the coming days while hopeful trends on the virus front will likely be countered by rounds of expectedly poor economic data and the continued rise in new Covid-19 cases in other jurisdictions.
- Thailand: The Thai government is planning to extend its state of emergency by a month until 31 May. Meanwhile, the country’s tourism authority has dashed hopes of a near-term economic recovery as it expects a 60% plunge in tourist arrivals this year with this, in turn, denting tourism income by at least half. All this adds to the downside risk to our view of a 7.7% YoY GDP fall in 2Q20 and full-year contraction of 4.3%. We expect an additional 50 basis point central bank (BoT) rate cut this quarter, taking rates to a record low of 0.25%, fueling the need for unconventional easing after that.
- Philippines: Bangko Sentral ng Pilipinas (BSP) predicts GDP growth to slip to -0.2% in 2020 as Governor Diokno pledged additional stimulus to help stave off an impending economic downturn. Diokno indicated that he was open to cutting rates further and reducing reserve requirements but we believe he may be running out of conventional policy space after committing several rounds of rate cuts to date. Meanwhile, the Treasury announced a fresh round of Dollar-denominated borrowing with the Philippines set to issue $1bn worth of bonds likely split between the 10-year and 25-year tenors. The issuance should help bolster the PHP in the near term but reports that up to 90,000 migrant Filipinos are now unemployed should limit the Peso’s gains.
What to look out for: GDP data, central bank meetings and Covid-19 developments
- Philippines remittances and GIR (28 April)
- US wholesale inventories and consumer expectations (28 April)
- Singapore unemployment (29 April)
- US GDP and pending home sales (29 April)
- FOMC meeting (30 April)
- China PMI manufacturing and non-manufacturing (30 April)
- Thailand trade (30 April)
- Taiwan GDP (30 April)
- ECB meeting (30 April)
- US personal spending and core PCE (30 April)
- US ISM PMI manufacturing (1 May)
Download
Download article
28 April 2020
Good MornING Asia - 28 April 2020 This bundle contains 4 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).