Asia week ahead: China data releases and trade reports up ahead

A flurry of data reports from China are due on Monday, including first quarter GDP, industrial production, retail sales and fixed asset investments. We don’t expect the full impact of the current lockdown in Shanghai will be reflected in this set of March data. However, we do expect retail sales to be in contraction on a yearly basis.

On 20 April, the Loan Prime rate is scheduled for release. It is highly expected that the loan prime rate will be trimmed by 10bps as authorities bank on the easing of monetary policy to help drive the economic recovery from Covid.

In the coming week, a number of trade figures from the region will be published, and will likely showcase the impact of the ongoing conflict in Ukraine. Indonesia is scheduled to release trade data on 18 April and we expect both exports and imports to sustain double-digit gains. Indonesia’s export sector benefits from the pickup in commodity prices, however imports are also likely to bloat given the country’s reliance on imported crude oil. Indonesia’s overall trade balance should remain in surplus, although we do expect this to narrow.

Japan trade data will be released next week, and the overall balance of trade is expected to widen its deficit. Given import price surges in energy and other commodities, import growth should outpace the growth of exports.

Korea’s early trade report will be out on 21 April. We expect that IT and petrochemical exports will continue to be strong, while weakness in auto and machinery exports will deepen. It will be worth closely monitoring this data point to monitor how the Ukraine war and China lockdowns are impacting regional/global trade in real time.

Lastly, Singapore's March non-oil domestic exports are set to reverse into contraction, largely due to base effects but we cannot rule out the impact of the conflict on global demand.

Bank Indonesia (BI) has kept policy rates at accommodative levels to support the economy’s recovery from the fallout from Covid. BI Governor Perry Warjiyo hinted that he would consider tightening policy should core inflation become a problem. With recent inflation reports showing a pickup both in headline and core inflation, we can expect Warjiyo to signal a potential rate hike in the near term, contingent on further acceleration in price pressures.