The Week Ahead - Trade data, inflation, GDP, FOMC meeting

Improving economy: Balance of trade is expected to be at RM24.2bil by the end of this quarter.

Trade data

THE Statistics Department is expected to release trade data for December 2021, leading index and producer price index this week.

Balance of trade is expected to be at RM24.2bil by the end of this quarter, according to Trading Economics global macro models and analysts expectations.

In addition, a raft of corporate earnings results are due this week. Bursa Malaysia Bhd has scheduled to release its financial results for the fourth quarter ended Dec 31, 2021 on Friday while Lotte Chemical Titan Holding Bhd will release its results on Thursday.

Westports Holdings Bhd and Pavilion Real Estate Investment Trust are also expected to release their financial results this week.

Meanwhile, Bank Negara will release its international reserves as at Jan 14 today.

Rising inflation

SINGAPORE is expected to release December 2021 consumer price index (CPI) as well as industrial production and unemployment rate this week.

Bloomberg estimates CPI to expand 3.4%-3.7% year-on-year and 3.8% year-on-year in November 2021.

ING said Singapore’s December 2021 inflation is expected to remain elevated.

Core inflation, the inflation measure monitored by monetary authorities, likely rose to 1.8%, prompting the authorities to implement supply-side measures to mitigate inflationary pressures on food items.

ING said elevated inflation would keep the Monetary Authority of Singapore leaning towards a hawkish change ahead of its April meeting.

GDP reports

SOUTH Korea, the Philippines, Taiwan and Hong Kong are expected to release their gross domestic product (GDP) for the fourth quarter of 2021 this week.

Bloomberg estimates South Korea’s GDP to grow 3.9% year-on-year from 4% in the third quarter of 2021.

ING said South Korea’s prospect of a much stronger fourth-quarter figure had been thrown into doubt by the December surge in Covid-19 cases in South Korea that likely weighed on service sector activity, along with a flat full quarter for industrial production and likely reversal of the positive swing in net exports in the third quarter of 2021.

But GDP probably has little bearing on the outlook for the Bank of Korea, which is more focused on financial distortions and the housing market at present.

In the Philippines, fourth-quarter 2021 GDP is expected to hit 6.7% with the full-year growth to 5.4% for 2021, according to ING.

First FOMC meeting

THE first Federal Reserve’s (Fed) Federal Open Market Committee meeting of the year will unfold this week.

IHS Markit said recent indications have pointed to the Fed commencing its rate hikes as early as the March meeting, which leaves the upcoming meeting one to track the Fed’s signals for the imminent hike.

UOB expects three rate hikes in 2022 (in line with the December 2021 Dotplot guidance), with the first one likely in June.

UOB also expects Fed to shed more light on its balance sheet run-off timeline and magnitude.

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