The Week Ahead - Jobless rate, inflation data, monetary policy, China data,

Car assemblyEconomists expect IPI to grow 0.5% in February, attributable to Chinese New Year holidays. They added that the IPI performance would continue to be supported by steady global demand.

IPI, jobless rate

THIS week will see the release of industrial production index (IPI) figures for February and the manufacturing sales value. Unemployment rate data is also due on Thursday.

Economists expect IPI to grow 0.5% in February, attributable to Chinese New Year holidays. They added that the IPI performance would continue to be supported by steady global demand.

They also estimated the unemployment rate in February to be around 4.8%. Malaysia’s IPI saw a 1.2% growth in January 2021, compared with the same month of the previous year.

Unemployment rate rose to 4.9% in January compared with 4.8% in December.

Meanwhile, Bank Negara is expected to release its international reserves data as at March 31 on Wednesday.

Inflation data

SEVERAL countries including China, Thailand, the Philippines and Taiwan are due to release their inflation data for the month of March.

According to ING, the Philippines will take the spotlight for its runaway inflation that has surged past the central bank’s 2%-4% target.

ING forecasts inflation in the Philippines accelerated to 4.9%, up from 4.7% in February.

China is expected to release its consumer price index (CPI) on Friday. Bloomberg estimates inflation to rise 0.4% year-on-year. Its CPI dropped by 0.2% year-on-year last month.

Monetary policy decisions

THE Reserve Bank of Australia (RBA) and Reserve Bank of India (RBI) are expected to maintain their current policy at this week’s meeting.

ING said that like the Federal Reserve, the RBA is likely to stick to the dovish rhetoric and maintain its current stance until 2024, when it expects inflation to recover to the 2%-3% policy target although such inflation expectations appear to be misplaced against the rapid rise in jobs recently.

ING shared the consensus view that governor Phillip Lowe is going to keep the policy interest rate and yield curve targets at 0.1% this week. All seven economists polled in the Bloomberg survey expect the RBA to keep both the cash rate target and the three-year yield target at 0.1%.

UOB Global Economics & Markets Research continued to expect the cash rate to remain unchanged, but now expected a full A$100bil (RM315.1bil) extension of quantitative easing beyond the second round. That said, UOB believes that yield curve control will not be extended past the April 2024 bond.

According to a Bloomberg survey, all nine economists polled expect the RBI to keep all its policy rates – RBI repurchase rate, RBI reverse repo rate and RBI cash reserve ratio unchanged at 4%, 3.35% and 3.5%, respectively.

China data in focus

A HANDFUL of data releases will be coming up this week including Caixin Services PMI for March, foreign reserves, producer price index (PPI) and money supply.

China’s Caixin/Markit services PMI fell to 51.5 in February from 52.0 in January while PPI rose 1.7% from a year earlier in February.

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