ASEAN Morning Bytes
Bargain hunting seems to be the order of the day again on Wednesday despite more confirmed cases of 2019-nCoV
EM Space: Bargain hunting even as virus cases increase
- General Asia: Looks like bargain hunting is going to be the order of the day again on Wednesday despite more confirmed cases of 2019-nCoV. Investors could take some direction from China services data and regional central bank meetings for the week, though gains will likely be capped with analysts still gauging the economic impact of the virus.
- Thailand: It’s decision day for the Bank of Thailand. The consensus is split between a ‘25bp rate cut’ and an ‘on hold’ policy. Just a week or so ago it was tilted towards ‘on hold’ decision. No guessing that a spike in the risk of the coronavirus outbreak denting tourism and the overall economic growth has caused this shift in the consensus, while the prospect of any fiscal stimulus to the economy continues to be dim. The monetary easing seems to be all that the economy could rely on for stimulus as inflation continues to be subdued. We expect a 25bp rate cut today.
- Malaysia: Trade ended 2019 on a firmer note with a 2.7% YoY growth beating the consensus of 2.5% fall. But 2020 is off to a weaker start. If uncontained, the spread of the coronavirus poses a significant threat to trade, tourism, and the overall growth outlook in 2020. We don’t rule out more BNM rate cuts this year if the global economic situation gets worse.
- Indonesia: 4Q GDP report today is expected to show steady growth of about 5%. keeping the full-year growth to 5.0%, down from 2018 rate and the official target of 5.2%. Slower domestic growth and looming global headwinds will be enough to prod Bank Indonesia (BI) into easing. Meanwhile, BI Governor Warjiyo kept up is dovish rhetoric, indicating that the central bank remained open to easing monetary policy further in light of the recent 2019-nCoV episode. We expect BI to resume its easing cycle once IDR gains some stability.
- Philippines: January CPI data is due with inflation likely to accelerate to 2.9% YoY from 2.5% in the previous month (consensus 2.7%) on higher food prices. Crop damage due to typhoons and a volcanic eruption likely caused supply disruptions although lower utility and transport costs could offset the food price gain. Despite the faster inflation reading, we expect the central bank to follow through with another round of easing at the meeting this Thursday.
What to look out for: Developments on the virus and central bank meetings
- Philippines CPI (5 February)
- China Caixin PMI services (5 February)
- Indonesia 4Q GDP (5 February)
- Bank of Thailand (5 February)
- US trade (5 February)
- US PMI services (5 February)
- Thailand CPI (6 February)
- India RBI meeting (6 February)
- Philippines BSP meeting (6 February)
- Taiwan CPI (6 February)
- US initial jobless claims (6 February)
- Malaysia industrial production (7 February)
- Taiwan trade (7 February)
- US nonfarm payrolls (7 February)
Download
Download article
5 February 2020
Good MornING Asia - 5 February 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).