ASEAN Morning Bytes
The coronavirus is now the global emergency
EM Space: The global emergency
- General Asia: The coronavirus is now the global emergency, having a significant bearing on global growth. The downward adjustments to growth forecasts for the affected countries are already underway with expectations of China of facing about 1.5% dent to its GDP growth and the US and Eurozone about 0.1%. We are reviewing forecasts for Asian countries.
- Thailand: December balance of payments data is due. The expectations of a higher current surplus of $3.6 billion than $3.4 billion in November should be some relief for the THB selloff. The currency has lost a significant ground coming into 2020 with 3.7% depreciation against the USD this month, the worst among Asian currencies. The USD/THB rate has now moved up to a higher range of 31-33 and we see it trading close to the top of this range by the end of this quarter.
- Philippines: The Bangko Sentral ng Pilipinas (BSP) Governor Diokno kept up his dovish rhetoric, indicating that he could still cut policy rates by up to 50 basis points in 2020. Noting upside risks to inflation and a possible slowdown in growth due to a recent volcanic eruption, Diokno highlighted that inflation should remain within target for both 2020 and 2012. Meanwhile, the Philippines confirmed its first case for the 2019-nCov and market panic may cause the Peso to weaken today.
- Indonesia: Bank Indonesia (BI) Governor Perry Warjiyo attempted to calm fears, indicating that financial markets are “stabilizing” after the initial selloff linked to panic over the global spread of the 2019-nCov. He called for closer coordination between the fiscal and monetary authorities, noting that monetary policy “isn’t the only game in town”, though 2020 presents challenges and that the central bank would maintain its accommodative stance. The IDR is the Asian top-performing emerging market currency, which keeps doors open for more BI easing ahead.
What to look out for: US core PCE inflation and Brexit
- Thailand balance of payments (31 January)
- EU GDP (31 January)
- US core PCE (31 January)
- UK exit deadline
Download
Download article
31 January 2020
Good MornING Asia - 31 January 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).