The Week Ahead

International reserves

IT will be a quiet week ahead with data limited to the production price index for August and export-import statistics by state.

According to Trading Economics’ global macro models and analyst expectations, producer prices change is expected to be 12% by the end of this quarter.

It added that in the long-term, the PPI is projected to trend around 2% in 2022 and 2.5% in 2023.

Bank Negara (pic) will be releasing the detailed disclosure of international reserves as of end-August on Friday.

Industrial production data

JAPAN, South Korea, and Singapore are expected to release their industrial production data for August.

Bloomberg expects Singapore’s industrial production in August to grow 2.1% month-on-month and a contraction of 0.5% year-on-year. In Japan, despite a boost from the economic reopening, industrial production in August is expected to take a breather and decline moderately after a strong gain over the past two months, according to ING.

The research house said South Korea’s industrial production is expected to contract more intensely on the back of weak output from automobiles as well as information technology and semiconductors.

ING also expects Singapore to report a modest monthly decline as the manufacturing PMI fell in August.

However, as the material shortage situation has improved since June, the magnitude of the decline should be smaller than in the previous month.

Interest rates

THE Bank of Thailand and the Reserve Bank of India (RBI) will decide on their monetary policy this week.

According to a Bloomberg survey, two analysts expect a 25 basis points (bps) hike to 1%.

UOB Global Economics and Markets Research has kept its view for another 25 bps rate hike to 1%, and to remain for the rest of the year, before possibly resuming hikes in 2023.

A Bloomberg poll showed four analysts expecting a 35 bps hike to 5.75% while another four expect a 50 bps hike to 5.9%.

UOB thinks that the RBI would add 50 bps rate increase in the two remaining monetary policy committee meetings in 2022 to bring the repo rate to 5.9% by year-end.

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