ASEAN morning bytes
General market tone: Slight risk-on.
Investor sentiments remain mixed given the lack of fresh leads although bargain hunting may lead to slight gains.
EM Space: Market looking for direction with eye still on US-China trade negotiations
- General Asia: Market will likely move sideways with an upward bias as investors are still grappling for direction amid lack of fresh developments.
- Indonesia: Indonesia posted a better-than-expected 4Q growth of 5.18% to lift full-year growth to 5.17%, supporting President Jokowi's re-election bid in the upcoming elections scheduled for April. Consumption helped offset a substantial trade gap. The economy is seen to enjoy better economic prospects in 2019 with consumption receiving a boost from cash transfers and with the trade deficit likely to narrow given the government’s efforts to curb imports.
- Thailand: As widely expected, the Bank of Thailand left policy rate at 1.75% yesterday noting that “accommodative monetary policy would remain appropriate in the period ahead”. Two policy committee members still voted for a 25bp rate hike. The policy statement revealed no concern about strong THB appreciation threatening exports; 4.2% year-to-date currency appreciation is the most among Asian currencies. We remain of the view that the BoT will leave policy on hold throughout 2019, but we are reviewing our call of the USD/THB rising to 33 on rising political risks.
- Philippines: The Bangko Sentral ng Pilipinas (BSP) holds a policy meeting today with market expectations pointing to the central bank leaving rates unchanged. January inflation of 4.4%, a sharp slowdown from 5-6% in the second half of 2018, gives the central bank more reason to pause after hiking very aggressively to nip inflation in 2018. Market participants will be looking for changes in BSP’s tone as well as any surprise cuts to the reserve requirement ratios (RRR) after Governor Espenilla indicated that recent inflation trends give BSP some “scope” to cut the RRR.
What to look out for: Central bank meetings
- Philippines policy meeting (7 February)
- India policy meeting (7 February)
- Bank of England meeting (7 February)
Download
Download article
7 February 2019
Good MornING Asia - 7 February 2019 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).