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Australia's GDP and inflation both come in below expectations. Upcoming, China and other Asian PMI reports and Indonesia's inflation - a busy day in Asia
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Global Macro and Markets
- Global Markets: Further uncertainty plagued equity markets yesterday. Both the S&P 500 and NASDAQ did trade up during the session but failed to hold on to gains and both ended slightly down from the previous day’s close. Chinese equities were mixed, with the Hang Seng making a 0.79% decline, while the CSI 300 pushed up 0.63%. US Treasury yields reversed the previous day's declines and the 2Y yield rose 3.8bp, while the 10Y was basically unchanged at 3.92%, though was as high as 3.98% at one stage. The USD is a bit stronger than this time yesterday, trading at 1.0578 against the EUR currently, though it was also a choppy session, and it rose above 1.064 before retreating. The AUD has also been very choppy, but currently is a bit down on this time yesterday, at 0.6732, and it is a similar story for most of the G-10 currencies. Big on volatility, but low on direction. That just about sums up the Asian FX group, where, with the exception of the THB, which lost 0.69% yesterday, and the PHP, which gained 0.36%, most of the other currencies lie pretty close to where they were a day ago.
- G-7 Macro: Disappointing French and Spanish inflation data yesterday has encouraged thoughts of a 4% refi rate from the ECB and we get some additional German CPI inflation numbers today that could cement these thoughts. US Conference Board data showed confidence weakening from the previous month. The manufacturing ISM index later today is a timely reminder that payrolls is looming, though due to the shortness of the last month, will not be released until next Friday. Considering what payrolls did to markets last month, it is no wonder markets are a bit jittery.
- Australia: 4Q22 GDP came in a lot weaker than had been expected rising just 0.5%QoQ, though thanks to upwards revisions to previous data, the year-on-year rate managed 2.7% as expected. We have also had January 2023 CPI inflation data. And that too came in softer than expected, at 7.4%YoY, after last month's surprise surge to 8.4%.
- India: India delivered 4.4% YoY growth in 4Q22, which equates to a 6.7% YoY growth rate for 2022 as a whole. The release also shows growth momentum remaining strong as India heads into 2023, and we anticipate another 6%+ growth figure this year.
- China: Official PMI data for February help fill the data vacuum of the Lunar New Year period until we get the next hard data releases in a couple of weeks. We are expecting the PMIs to support a view of a modest recovery in February after a stronger January.
- Indonesia: Inflation is set for release today. The market consensus points to inflation ticking higher to 5.4%YoY (from 5.3%) although core inflation could inch lower to 3.2% (from 3.3%). Bank Indonesia recently declared victory in the inflation fight, keeping policy rates untouched at the last policy meeting. With BI indicating it would not be hiking rates anymore this year, the IDR is expected to come under additional depreciation pressure.
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What to look out for: China manufacturing and non-manufacturing PMI
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China PMI and Caixin PMI (1 March)
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Indonesia CPI inflation (1 March)
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US ISM (1 March)
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South Korea industrial production (2 March)
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Hong Kong retail sales (2 March)
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US initial jobless claims (2 March)
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Japan Tokyo CPI inflation and Jibun PMI services (3 March)
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China Caixin PMI services (3 March)
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Singapore retail sales (3 March)
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US ISM services (3 March)
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Emerging Markets Asia Pacific Asia Markets
Disclaimer
This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
