The Week Ahead - Monetary poicy, China output

Natural rubber production declined by 4.1% in September 2021 (41,180 tonnes) as compared to August 2021 (42,942 tonnes).

Quiet week

IT’S going to be a quiet week ahead in terms of calendar events for markets.

The Statistics Department is expected to release the October 2021 monthly rubber production data on Wednesday.

Natural rubber production declined by 4.1% in September 2021 (41,180 tonnes) as compared to August 2021 (42,942 tonnes).

Export of Malaysia’s natural rubber amounted to 62,332 tonnes in September 2021, rising by 5.3% against August 2021 (59,172 tonnes).

Gloves were the main exports of rubber-based products with a value of RM3.1bil in September 2021, a decrease of 2.2% as compared to August 2021 (RM3.8bil).

Monetary policy decisions

BANK Indonesia (BI), Bangko Sentral ng Pilipinas (BSP) and Central Bank of the Republic of China (Taiwan) or CBC will meet this week for their monetary policy decisions.

Pedestrians wearing protective mask walk near the Philippine National Bank (PNB) Center in Makati City, Metro Manila, the Philippines, on Monday, July 27, 2020. President Rodrigo Duterte pushed for corporate tax cuts and targeted support for pandemic-hit industries as part of a recovery plan, and told lawmakers he'd asked Chinese President Xi Jinping to help the Philippines get priority access to a Covid-19 vaccine. Photographer: Geric Cruz/Bloomberg

UOB Global Economics & Markets Research expects BI to maintain its rate at the current level of 3.5% till mid-2022, where it forecast BI to start hiking rates. A Bloomberg poll showed a unanimous expectation of BSP to maintain its rates at 2.00%.

UOB continues to expect a steady reverse repurchase (RRP) rate of 2.00% until mid-2022. Thereafter, the research house anticipates a 25-basis-point rate hike in the third quarter of 2022, which will bring the RRP rate to 2.25% by end-2022.

This is primarily premised on signs of solid growth recovery, the build-up of demand price pressures in tandem with the improvement in labour market conditions in the second half of 2022 and changes in global monetary policy next year.

China industrial output

China economy manufacturing

CHINA will be releasing its slew of data including industrial production, retail sales and the jobless rate for November 2021 on Wednesday.

Bloomberg estimates China’s November industrial production to expand 3.8% year-on-year (y-o-y) from 3.5% in October 2021. It estimates retail sales to grow 4.8% y-o-y from 4.9% in October.

Industrial production in China is expected to be 5% by the end of this quarter, according to Trading Economics global macro models and analysts’ expectations.