It will be a quiet week on Malaysia’s economic calendar as data watchers continue monitoring the progress of the National Recovery Plan (NRP) and look out for refinements on standard operating procedures. Developments on when parliament reconvenes will also be of interest. Regionally, the spotlight will be on Japan and Thailand, which are due to release their report cards for the second quarter of 2021 (2Q2021).

A resurgence in Covid-19 cases and tighter restrictions to break the chain of infection have probably stalled recovery in both economies in 2Q2021, according to ING.

“Having contracted 1% quarter on quarter in 1Q2021, Japan is on the verge of falling into recession. The same applies to the Thai economy, which at 0.2% q-o-q barely grew in 1Q2021 and likely contracted as much as 2.7% q-o-q in 2Q2021. But rising political risks evident from the latest anti-government protests could be an added drag on the Thai economy for the rest of the year,” said ING in its weekly report last Thursday.

On Wednesday, Japan will release its machinery orders for June and July trade balance data, followed by Consumer Price Index data for July on Friday. Bloomberg estimates the CPI will contract 0.4% year on year in July, after a 0.5% y-o-y drop in June.

In Singapore, the focus is on its July non-oil domestic exports (NODX) data to be released on Tuesday. ING said the city state had been a beneficiary of the global semiconductor upswing. “Judging by the strong July exports from South Korea and Taiwan, NODX likely remained strong last month; our forecast is 1.8% month-on-month and 14% y-o-y growth.”

According to UOB Global Economics and Markets Research, Singapore’s Phase 2 (Heightened Alert) measures, which took effect from July 22 to Aug 18, and the recent downward trend of daily Covid-19 infections could mean that the government may relax more of the social restrictions, although it is likely to be based on vaccination status.

China’s July industrial output and retail sales figures are due on Monday, and an update of its loan prime rate on Friday. “This data should capture the impact of devastating floods in Henan. We expect a more pronounced impact on retail sales than manufacturing activity, as the latter remains supported by strong export demand,” said ING. Earlier, the Caixin China General Manufacturing Purchasing Managers’ Index showed that output growth slowed amid a slight drop in new orders in July.

In Asia-Pacific, central bank meetings will be held in New Zealand, China and Indonesia this week. ING believes that, as growth continues to take a hit from the Covid-19 pandemic and transitory inflation spikes have now passed, easy policy stances remain the norm for central banks in much of Asia.

On Monday, South Korea’s markets will close in observance of the National Liberation Day, while Indian markets will be closed on Thursday on account of the holiday for Muharram. It will also be a short week for Indonesia as the country celebrates Independence Day on Tuesday. The Philippines will celebrate Ninoy Aquino Day holiday on Aug 21.

In major developed markets, a series of economic data will be closely watched, including the eurozone and UK inflation data, in addition to the eurozone’s 2Q2021 gross domestic product data.

“The final print for 2Q2021 GDP for the eurozone on Tuesday is expected to remain unchanged from preliminary estimates of 2% q-o-q and 13.7% y-o-y. But the interesting one to watch is the July CPI print on Wednesday, which is expected to be significantly revised to 2.2% from preliminary estimates of 1.9%, while core CPI is expected to stay unchanged at 0.7% y-o-y, according to a Bloomberg poll,” said UOB.

In the US, the spotlight will be on the Federal Reserve’s minutes from the July 27 and 28 meeting, with the timing of the tapering at the top of everyone’s mind. In a report last Thursday, IHS Markit said while Fed chair Jerome Powell said officials had taken a “first deep dive” into the scaling-back of bond purchases, there was no mention of timing. This week’s Fed FOMC minutes could also offer clues on the Fed’s thoughts ahead of the Aug 26 to 28 Jackson Hole Policy Symposium, where more details are expected to be disclosed.

Over in the courts, the trial of former prime minister Datuk Seri Najib Razak’s 1Malaysia Development Bhd (1MDB)-

Tanore case will resume at the Kuala Lumpur High Court on Tuesday. The case was last heard on May 27 and had been postponed several times because of ongoing lockdowns.

Najib faces four charges of using his position to obtain bribes totalling RM2.3 billion from 1MDB funds and 21 charges of money laundering involving the same amount.

Lim Guan Eng’s graft trial involving the Penang undersea tunnel project will also resume on Monday.

Lim is accused of soliciting gratification to help a company to secure the project in his capacity as the then chief minister of Penang. He is alleged to have sought 10% of the profit to be made by the company from Datuk Zarul Ahmad Mohd Zulkifli, who is a director at Consortium Zenith Construction Sdn Bhd.

On the corporate front, listed companies that will be holding their annual general meeting this week include Pantech Group Holdings Bhd, Matrix Concepts Holdings Bhd, IQ Group Holdings Bhd and Tiong Nam Logistics Holdings Bhd. Those that will hold their extraordinary general meeting are Kumpulan H & L High-Tech Bhd and Priceworth International Bhd. On Friday, Carlsberg Brewery Malaysia Bhd is set to hold a virtual briefing on its results for the second quarter and first half of FY2021.