Asia Morning Bites
Japan's PPI beats expectations, though the BSI business survey disappoints. Indian inflation and Philippines' trade figures are out ahead of the US inflation report
Global Macro and Markets
- Global Markets: US Treasury markets looked a bit jittery yesterday ahead of the February CPI release later today, which may well show only very slight progress towards the Fed’s goals. 2Y US Treasury yields rose 6.3 basis points and 10Y yields rose 2.3bp to 4.098%. EURUSD slid back slightly to 1.0926. The AUD dropped slightly too to 0.6612. Cable also lost ground, but the JPY was steadier at 146.75. Asian FX didn’t do very much on the whole yesterday, though the KRW continued to strengthen and has fallen to 1310.2. The CNH also made modest gains dropping to 7.1795. US stocks continued to lose ground on Monday. But Chinese stocks had a good day. The Hang Seng rose 1.43% and the CSI 300 rose 1.25%. The CSI 300 is now up for the year by 4.6%.
- G-7 Macro: After a quiet start to the week, things hot up today with the US February CPI inflation release. The Bloomberg consensus expects a 0.4% MoM increase to the headline CPI index, which would leave inflation at 3.1% YoY. A slightly smaller 0.3% MoM rise in the core index will allow core inflation to decline from 3.9% to 3.7%. The US small firm NFIB survey is also released today. Business optimism is forecast to improve slightly. Elsewhere, the UK releases its January labour report.
- Japan: PPI inflation for February came in slightly above expectations, rising from 0.2% YoY in January to 0.6%. The 1Q24 BSI survey was less positive. The all-industry figure fell from 4.8 to zero, while the manufacturing index fell to -6.7 from 5.7. This data is a diffusion index, so a negative figure suggests more firms seeing a negative outlook than a positive one.
- India: Our forecast for Indian inflation for February lies exactly on the consensus forecast of 5.05%. This is virtually unchanged from the January reading. Despite the apparent concurrence in our and the consensus forecasts, the consensus spread is very wide, veering from 4.7% to 5.5%. Some further moderation in vegetable prices is the only notable change in our forecast from last month, and there are no strong base effects to whip the headline inflation rate around. Today’s figures would mark six months of inflation within the RBI’s inflation target range.
- Philippines: Trade data will be reported today. We expect exports to manage a modest gain for January, possibly supported by the electronics subsector while imports are likely to pull back on lower energy imports. The overall trade balance should remain in deep deficit of roughly $4.5bn, suggeting that the current account also stays in deficit. This supports the expectation that any possible rally by the PHP could be capped.
What to look out for: US and India CPI plus Philippine trade
- Philippines trade balance (12 March)
- India CPI inflation (12 March)
- US CPI inflation (12 March)
- South Korea unemployment (13 March)
- India trade balance (13 March)
- US MBA mortgage expectations (13 March)
- US retail sales (14 March)
- China MLF (15 March)
- Indonesia trade (15 March)
- Philippines remittances (15 March)
- US industrial production and University of Michigan sentiment (15 March)
Download
Download article"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).