ASEAN Morning Bytes
General market tone: wait and see. US jobs numbers slip below estimates but the previous month’s numbers revised higher. Wage growth slowed but remains well above 2%.
International theme: US jobs data mixed, market awaits fresh developments
- US economic data was mixed with the latest print falling below market expectations although previous month’s numbers were bumped up substantially. Wage growth slowed although remained elevated enough to keep markets skittish.
EM Space: EM Asia digests US labor market data, looks to Fed speakers for direction
- General Asia: Asian markets will digest labor market data and likely await direction from China data and Fed speakers. China’s RRR cut over the weekend could help boost sentiment.
- Malaysia: In a disappointing data, exports surprisingly contracted by 0.3% YoY in August. Imports growth remained firm at 11.2%, and trade surplus narrowed sharply to MYR 1.6bn. The 1.3% fall in foreign reserves to $103bn in September was the fourth straight month of reserves outflow. The clawback of the MYR’s recent underperformance relative to the oil price hinges on the trajectory exports and GDP growth take going forward, though the latest trade report doesn’t bode well here. We maintain our end-year USD/MYR forecast of 4.25.
- Malaysia: As the fiscal strings tighten under the new government, the Star Malaysia reported about authorities cutting the overall development cost of the Pan Borneo High Project in Sarawak. All eyes are on the upcoming Federal Budget for 2019 to be unveiled in early November.
- Thailand: Finance Minister Apisak Tantivorawong urged for continued accommodative economic policy. In an interview to Bangkok Post he said, “The Thai economic recovery is on track but is still vulnerable in some areas”, and that, “The economy could lose momentum if any shocks such as political risk or interest rate hikes”. We maintain our view of the BoT keeping policy on hold this year and in the most part of 2019.
- Indonesia: The Bank of Indonesia (BI) Governor Warjiyo pledged continued support for the IDR as the currency remains pressured by global developments. Inflation is forecasted to remain within the target in 2018, while BI indicated they would work closely with the national government to help manage the widening current account deficit.
- Philippines: Gross international reserves slid to $75.16 as of end-September as the BSP looked to smoothen out volatility in the exchange market given the heightened risk of EM contagion. The current level is a 7 year low and reinforces the expectation that the government will be issuing foreign denominated debt before the year ends.
- Philippines: September inflation came in at 6.7%, slightly below market consensus but still accelerating from the previous month. Base effects helped limit the year-on-year gain, while the month-on-month increase was steady at 0.9%. Core inflation slowed to 4.7% in September from 4.8% in the previous month. With non-monetary measures to combat inflation underway, inflation may decelerate going into 2019, diminishing the probability that the BSP will hike by 25 bps at its November meeting.
What to look out for: Fed speakers, IMF-WB meetings
- China FDI and PMI services (8 October)
- Fed Bullard speaks (8 October)
- Fed Williams speaks (9 October)
- Fed Harker and Williams (10 October)
- PH trade balance (10 October)
- US Producer prices (10 October)
- Fed Evans and Bostic speak (11 October)
- US inflation (11 October)
- China trade balance (12 October)
- IMF-WB annual meeting in Bali (12-14 October)
Download
Download article
8 October 2018
Good MornING Asia - 8 October 2018 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).