The Week Ahead: A trade data-packed week before the year ends

TheEdge Mon, Dec 09, 2019 03:00pm - 4 years View Original


It will be a busy week on the economic data front in Asia, even as more people head off for the year-end holidays.

First up is Malaysia’s October industrial production data, which will be released on Thursday and should shed some light on what stage the electronics cycle is in. “We have seen signs that it has bottomed out and would look for more evidence of the same,” ING said in a report last Thursday.

Singapore will release its November foreign reserves data on Monday and October retail sales on Thursday.

Elsewhere, China would have announced its import and export data for November on Sunday, while Taiwan is slated to release its own set of trade data on Monday and the Philippines on Tuesday.

Also of interest on Tuesday will be China’s Consumer Price Index (CPI), a main gauge of inflation, and the Producer Price Index (PPI) for November.

India’s November CPI data will be closely watched on Thursday, in light of a surprise pause in Reserve Bank of India easing last week. The benchmark repo rate — the rate at which it lends to commercial banks — remains at 5.15%.

The Philippines central bank policy meeting will also be held on Thursday and it is widely expected to keep its key policy rates unchanged.

“With domestic growth prospects expected to improve further while risks to the inflation outlook likely to stay contained, we too believe Bangko Sentral ng Pilipinas (BSP) will keep its overnight reverse repo rate and the BSP standing overnight deposit facility rate steady in December at 4% and 3.5% respectively. That said, we expect the BSP to resume its policy rate cuts by another 50 basis points in the first half of 2020,” says UOB Global Economics & Markets Research in a report last Friday.

Thailand’s markets will be closed on Tuesday for the Constitution Day holiday.

Apart from the Philippines, three other major central banks are due to make monetary policy decisions this week. The US Federal Open Market Committee will hold its meeting to set interest rates on Thursday, along with Swiss National Bank and the European Central Bank. All three are expected to keep their policy rates unchanged.

Manufacturing activity for Europe will also be in focus on Thursday. According to Bloom­berg polls, the contraction of October industrial production for the eurozone may worsen to 2.3% year on year (from -1.7% in September) while the UK’s October industrial production may see a smaller contraction of 1.2% y-o-y (from -1.4% in September).

UOB Global Economics & Markets Research says market attention will also be on US price data. “On Wednesday, we have the CPI, November PPI on Thursday, and November import and export prices, as well as November advance retail sales data on Friday.”

The research house also expects markets to continue to track US-China trade policy developments this week, that is, whether or not the US will impose an additional 15% levies on US$160 billion of Chinese imports come Dec 15.

British voters are set to go to the polls for the fourth time in less than five years on Thursday, after members of parliament backed Prime Minister Boris Johnson’s call for an election following months of Brexit deadlock. According to UOB Global Economics & Markets Research, this will be the third election for the UK since 2015 and the first held in December since 1923.

“The latest opinion polls show the Conservatives could secure 40% to 45% of the vote, leading by around 10 points over Labour. Nonetheless, pollsters conceded this election is tough to call as voters are prone to switching parties because Brexit polarisation disrupts traditional allegiances. Surprise results in the Brexit referendum vote and the last election also mean such surveys are seen as less reliable,” it said.

In the courtroom, former prime minister Datuk Seri Najib Razak will take the stand again on Monday morning to answer the charges against him related to SRC International Sdn Bhd.

His former deputy, Datuk Seri Dr Ahmad Zahid Hamidi, will also continue with proceedings this week. He is facing 47 charges involving millions of ringgit of Yayasan Akalbudi funds.

Bloomberg data shows that among the large companies slated to announce earnings for the full financial year ended Oct 31, 2019, this week are Eco World Development Group Bhd, Eco World International Bhd and Mynews Holdings Bhd. Gamuda Bhd, V.S. Industry Bhd and Hiap Teck Venture Bhd are scheduled to release their first-quarter results while SCGM Bhd will release its second-quarter results.

Companies that will be holding annual general meetings include Berjaya Land Bhd, Pan Malaysia Holdings Bhd, Malayan United Industries Bhd, MUI Properties Bhd, Only World Group Holdings Bhd, YTL Power International Bhd, YTL Corp Bhd and Berjaya Corp Bhd. Companies holding extraordinary general meetings include IHH Healthcare Bhd, Grand-Flo Bhd, DeGem Bhd, Al-‘Aqar Healthcare REIT and Daibochi Bhd.

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