ASEAN Morning Bytes
General market tone: Wait and see.
Asian markets will likely tread water on Tuesday ahead of Fed Chairman Powell’s testimony.
EM Space: All eyes on Fed Chairman Powell's congressional testimony
- General Asia: Investors will likely opt to keep to the sidelines ahead of Fed Chairman Powell’s testimony to the Congress as hopes for deep rate cuts are being scaled back. With the data release calendar thin before Wednesday, anxiety has built up and will likely keep investors from making any substantial bets.
- Malaysia: Bank Negara Malaysia, the central bank, announces its monetary policy decision at 3 pm local time. We are part of the solid consensus forecasting no change to the BNM policy. In a pre-emptive move at the last meeting in May, the BNM cut its policy rate by 25bp to 3.00%. And just It has also eased guidelines for bank lending to SMEs. The economy is holding up well with growth likely picked up in 2Q from 4.5% in 1Q. And inflation continues to be negligible, allowing plenty of space for more easing if required though we believe the BNM will preserve this space for the future.
- Indonesia: Growth targets in Indonesia have been lowered for 2020 to 5.2-5.5% (from 5.3-5.6%) given the current global outlook on the US-China trade war. Meanwhile, the government expects the IDR to trade within the 14,000-14,500 range next year while inflation will settle within the 2-4%.
- Thailand: The Bank of Thailand Governor Veerathai Santiprabhob told media yesterday that the central bank was ready to adjust policy, noting that the benchmark rate could go up or down depending on what the central bank sees suitable for the economy. The economy is sputtering and the next move in the BoT policy rate will be down, in our view. We anticipate two 25bp cuts to the policy rate in August, and in the fourth quarter, taking it to 1.25% by end-2019. Echoing our view, the World Bank has warned prolonged political uncertainty as being a key risk for the economy ahead (see our “Political stalemate hurts Thailand’s economy”).
- Philippines: Government spending rose 6% YoY in May following the passage of the spending bill. However, the year-to-date spending is still down by 0.8% YoY, dragged down by 4% contraction in infrastructure spending, a key component to the administration’s flagship build-build-build agenda. We expect sustained soft spending growth pushing the central bank for another policy rate cut in August.
What to look out for: Fed speakers, US inflation data
- Malaysia BNM meeting (9 July)
- US JOLTS jobs opening (9 July)
- China money supply (9 July)
- China trade (10 July)
- Fed Bostic and Powell speak
- Philippines trade (10 July)
- US wholesale inventories (10 July)
- FOMC meeting minutes (11 July)
- Fed Bullard speaks
- US inflation (11 July)
- Singapore GDP and retail sales (12 July)
- Malaysia industrial production (12 July)
- Japan industrial production (12 July)
- India inflation (12 July)
- US PPU (12 July)
- China trade (12 July)
Download
Download article9 July 2019
Good MornING Asia - 9 July 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).