Inflation data
A RAFT of economic data is due this week, including Malaysia’s September inflation and external trade figures today.
According to Bloomberg estimates, exports are expected to rise 37.4% year-on-year (y-o-y) in September, moderating from 45.5% in August, while imports are forecast to increase 0.9%, compared with 41.4% previously.
The trade surplus is projected to widen to RM31.25bil from RM28.1bil in August.
Consumer price index (CPI) is expected to rise 1.9% y-o-y, according to Bloomberg estimates, unchanged from August.
UOB Global Economics and Markets Research, meanwhile, forecasts inflation to edge up to 2%, while exports are expected to grow 36% y-o-y in September, moderating from 45.5% in August.
It projects imports to rise 35% compared with 41.4% in August, while the trade surplus is expected to widen to RM29bil from RM28.1bil previously.
Meanwhile, Malaysia’s August leading and coincident economic indices are scheduled for release on Friday, providing further insights into the country’s economic outlook.
China GDP
CHINA’S third-quarter (3Q) gross domestic product (GDP) figures will be the highlight this week, alongside September industrial production, retail sales and October’s one-year and five-year loan prime rate (LPR) fixings.
According to Bloomberg estimates, China’s economy is expected to grow 4.4% y-o-y and 1% quarter-on-quarter (q-o-q) in 3Q.
UOB forecasts growth of 4.3% y-o-y and 0.9% q-o-q, unchanged from 2Q, while ING expects China’s economy to expand 4.4% y-o-y in 3Q.
ING forecasts retail sales and industrial production growth to improve slightly to 0.6% and 5.5%, respectively, in September, while fixed asset investment is expected to contract 7.5% y-o-y in the year to date.
ING also expects China’s one-year and five-year LPR to remain unchanged at 3% and 3.5%, respectively, when the latest fixings are announced this week.
A Bloomberg survey showed that all 13 analysts polled, including UOB expect China’s one-year and five-year LPR to remain unchanged at 3% and 3.5%, respectively, in October.
Monetary policy
BANK Indonesia (BI), Bangko Sentral ng Pilipinas (BSP) and the Bank of Korea are among the central banks scheduled to announce monetary policy decisions this week.
ING expects BI to keep its benchmark interest rate unchanged at 5.75%, supported by recent exchange-rate stability.
It said improving market sentiment had eased immediate pressure for a rate hike, although underlying balance-of-payments conditions remained largely unchanged.
According to a Bloomberg survey, eight of the nine analysts polled expect BI to hold rates steady at 5.75%, while one forecasts a 25-basis-point hike to 6%.
Meanwhile, UOB expects BSP to raise its benchmark reverse repurchase rate by 25 basis points to 5.25%, as both headline and core inflation rebounded in September despite a cumulative 75-basis-point rate increase this year.
The research house said the rebound pointed to persistent underlying price pressures amid a more hawkish US Federal Reserve outlook.
A Bloomberg survey showed that all nine analysts polled expect BSP to raise its overnight borrowing rate by 25 basis points to 5.25%, while the standing overnight deposit rate is projected to increase by the same margin to 4.75%.
