The Week Ahead - results, monetary policy, PMI Data,


THE economic calendar will see the release of the IHS Markit Malaysia Manufacturing Purchasing Managers’ Index (PMI) today and Bank Negara’s international reserves as at July 30 on Friday.

Results season

THE economic calendar will see the release of the IHS Markit Malaysia Manufacturing Purchasing Managers’ Index (PMI) today and Bank Negara’s international reserves as at July 30 on Friday.

The international reserves of Bank Negara amounted to US$111.1bil (RM468.84bil) as at June 15.

The reserves position is sufficient to finance 8.0 months of retained imports and is 1.1 times total short-term external debt.

On the corporate front, Hartalega Holdings Bhd is expected to announce its first-quarter financial results for the period ended June 30 tomorrow.

Investors will be on the lookout whether the glove manufacturer repeats its impressive performance in the first quarter. For the financial year ended March 31, 2021, Hartalega posted a net profit of RM2.88bil on a revenue of RM6.69bil.

Monetary policy meetings

THE Reserve Bank of Australia (RBA), Bank of Thailand (BoT) and the Reserve Bank of India (RBI) policy meetings are scheduled this week.

Economists believe all central banks will likely leave policy settings as they are.

ING said the RBA would probably leave all aspects of its current stance unchanged despite a pick-up in inflation in the second quarter of 2021.

It added that both the BoT and RBI were also likely to be on hold.

RBARBA

UOB Global Economics & Markets Research said the RBA is widely expected to keep its policy rate unchanged at 0.1%.

Following the RBA’s meeting in July, UOB affirmed its view that the conditions for rate hikes are unlikely to be met until at least late 2023.

UOB expects the BoT to leave its benchmark rate unchanged at 0.50% and RBI to keep its policy repo rate unchanged at 4% for the rest of 2021.

Impending PMI data

THE manufacturing Purchasing Managers’ Index (PMI) is due in Asia this week. The data will be of interest to assess not just the output trends, but also for signs of disruption and supply chain delays.

ING expects a pick-up in China’s Caixin PMI manufacturing to 51.5 (versus 51.0 consensus) as semiconductor chip production offsets slower output from the automobile sector.

Meanwhile, manufacturing activity for the rest of the region is expected to remain on expansion mode, although Indonesia and Taiwan are both expected to see a less pronounced pace of growth, as recently imposed mobility restrictions start to weigh on overall economic activity.

According to a Bloomberg survey, China’s manufacturing PMI is likely to ease slightly to 50.8 in July (from 50.9 in June), while the non-manufacturing July PMI may also ease slightly to 53.3 (from 53.5 in June).

As for China’s Caixin manufacturing PMI, the Bloomberg median forecast is for a lower 51.0 reading in July, while the services PMI is likely to edge higher to 50.5.

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