ASEAN Morning Bytes
Not much is happening in Asia today apart from China’s industrial profits data. The US political saga continues to rattle markets in the absence of significant economic events or data.
EM Space: Looks like a slow day ahead
- General Asia: The US political saga continues to rattle markets in the absence of significant economic events or data. Not much happening in Asia today apart from China’s industrial profits data for August. Nearly two-decade low production growth suggests profits growth slipping back into negative territory after a one-off positive in July. Meanwhile, Chinese government bonds failed to qualify for entry in the FTSE Russell’s global bond index on accessibility grounds.
- Indonesia: Finance minister Sri Mulyani Indrawati warned that ongoing protests over new law weakening the Corruption Eradication Commission could threaten the business sentiment. This explains some of the depreciation pressure on the Indonesian rupiah over the last two weeks besides global factors such as oil price spike contributing to the currency's weakness. Our end-2019 USD/IDR forecast is 14,300 (spot 14,165).
- Malaysia: Not an exclusion just yet but the Malaysian government bonds remain on FTSE Russell's watch-list for exclusion from its global bond index as the index provider seeks more measures to deepen the market while the central bank continues to bar the offshore currency trading. In more positive news for the bonds though, finance minister Lim Guan Eng expressed the government's commitment to the 3.4% of GDP fiscal deficit target for 2019.
- Philippines: As expected, the BSP delivered a 25bp rate cut at the meeting yesterday as inflation dipped below the central bank’s 2-4% medium-term policy target. Governor Diokno sees continued benign inflation outlook providing room for a further rate reduction to support growth. We see inflation downtrend nearing its trough, and so is the BSP policy rate. That said, we won’t rule out one more rate cut before the yearend.
- Singapore: (From Rob Carnell) After several months of roughly stable production which had begun to drag trend rates of growth back into positive territory, the 7.5% seasonally adjusted monthly decline in the August production figures was a blow to our hopes that the worst of the global tech slump has passed. The Monetary Authority of Singapore (MAS), which is due to reset the SGD nominal effective exchange rate path and band in October, is, in our opinion, bound to ease from the moderate appreciation it currently has in place (read more here).
Download
Download article
27 September 2019
Good MornING Asia - 27 September 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).