The week ahead - Trade data, CPI, GDP,


The CPI for August fell 1.4% to 120.1 from 121.8 a year ago, mainly due to lower transport and fuel prices but food prices continued to increase.

CPI, corporate earnings

AFTER a dip in headline inflation in August, the September Consumer Price Index (CPI) numbers will be watched closely. The Statistics Department is expected to release the CPI on Wednesday.

The CPI for August fell 1.4% to 120.1 from 121.8 a year ago, mainly due to lower transport and fuel prices but food prices continued to increase.

In monthly terms, however, the August CPI reading increased 0.2% from July, according to the department. Year-to-date, the CPI reading for January to August 2020 decreased 1% when compared to the same period a year ago.

Meanwhile, Bank Negara will also be releasing its international reserves figures as at Oct 15 on Thursday.

The international reserves of Bank Negara amounted to US$105bil as at Sept 30. The reserves position is sufficient to finance 8.4 months of retained imports and is 1.1 times total short-term external debt.

A slew of corporate earnings are expected to be announced this week including by Axis Real Estate Investment Trust and Pavilion Real Estate Investment Trust.

China 3Q GDP

CHINA’S gross domestic product (GDP) will be out today together with September data on industrial production, retail sales and fixed-asset investment. China will also announce its October loan prime rates (LPR) fixing on Tuesday.

China’s economic growth is expected to have accelerated in the third quarter (Q3), with IHS Markit projecting the GDP to have expanded at a 5.9% annual rate.

ING Asia senior economist Prakash Sakpal opined that China’s Q3 GDP performance should be better than that of Q2, imparting upside risk to the house forecast of 2.5% year-on-year GDP growth in the last quarter (3.2% in Q2).

ING does not see any reason for the People’s Bank of China (PBoC) to alter the current monetary policy setting.

UOB Global Economics and Markets Research expects a growth of 4.9% year-on-year while Bloomberg consensus forecast for Q3 GDP is at 5.5% year-on-year.

Additionally, UOB expects the PBoC to continue to hold rates into 2021.

Trade data

TRADE data is due in Japan, Taiwan and Thailand this week.

IHS Markit said Taiwan’s export orders and Thailand’s trade figures will be closely scrutinised for clues into global trade performance.

This followed global PMI data indicating a revival of global goods trade during September.

ING said taking a cue from firmer exports elsewhere in the region and look for the same in Japan and Thailand, though their export growths are yet to turn the corner into positive territory.

It added that Taiwan’s export orders would be a key indicator of electronics-led recovery coming into the final quarter of the year.

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