Asia Morning Bites For Friday, January 19

By Robert Carnell and Min Joo Kang of ING Economics

Thursday, January 18, 2024 10:20 PM EDT

Hands, World, Map, Global, Earth, Globe, Continents

Image Source: Pixabay

Global Macro and Markets

Global markets: US Treasuries had a fairly quiet session on Thursday after recent swings. The 2Y yield is almost unchanged at 4.352%, while the 10Y yield edged 4bp higher to 4.142%. Fed funds futures still have more than 140bp of easing by the year-end and more than a 50% chance of a March hike, so there is still likely some unwinding of this to go before we can start thinking again about easing. The Atlanta Fed’s Raphael Bostic joined the ranks of Fed speakers urging a cautious and pragmatic approach to easing. He suggested a 3Q start to easing. Bostic is a Fed voter this year. EURUSD has pushed slightly higher in the last 24 hours, getting above 1.09 at one point before settling back at just under 1.088 now. The AUD has also crept slightly higher to 0.6578 and Cable is also stronger at 1.2708, while the JPY has also made some gains, dropping to 148.06. The KRW is the best performer of the rest of the Asia FX pack at 1340. The THB was at the other end of the spectrum rising to 35.6 currently. There wasn’t much action elsewhere. US stocks had a decent day. The S&P 500 rose 0.88% and the NASDAQ rose 1.35%. Chinese stocks were also brighter. The Hang Seng rose 0.75% and the CSI 300 gained 1.41% amid rumours of official support.
G-7 macro: It was a pretty quiet day for macro releases yesterday, although there was a noticeable drop in US weekly jobless claims. Today we get the University of Michigan consumer sentiment numbers and inflation expectations. The US also has existing home sales figures for December. The consensus expects marginal gains for both series.
Japan: CPI inflation eased for a second month to 2.6% YoY in December (vs 2.9% in November, 2.5% Market consensus) mostly due to continued government subsidies for utilities and energy and a high base last year contributing as well. Core-excluding fresh food and Core-excluding fresh food & energy moved down to 2.3% and 3.7% YoY respectively, and were in line with the market consensus. The government’s energy/utility subsidy programs have been the main reason for the recent inflation decline over the past two months and utility prices dropped even further to -13.2% in December (vs -11.4% in November). But we expect inflation to pick up again from February, mainly due to one-off utility price cuts last year. In a monthly comparison, inflation rose 0.1% MoM sa with goods and services all up by 0.2% and 0.1% each. We still see that underlying inflationary pressures are alive with the most notable rise in entertainment. But, the cooling inflation and the earthquake in Ishikawa will probably give the BoJ a reason to hold at its January meeting.
Malaysia: 4Q23 GDP is published later today. The consensus 4.1% YoY estimate will deliver a 4% full-year growth rate, which is not too far below where we would estimate trend GDP to be, which, if it happens this way, won’t be a bad outcome in what has been a difficult year.

What to look out for: Malaysia GDP and US University of Michigan sentiment

Japan CPI inflation (19 January)
Malaysia trade balance and GDP (19 January)
US University of Michigan sentiment and existing home sales (19 January)
Fed President Daly speaks (19 January)

More By This Author:

Rates Spark: A Hawkish Send Off
Italy: Exit From Stagnation Looks Set To Be Slow
Asia Week Ahead: Bank Of Japan Likely To Retain Yield Curve Control

Disclaimer: This publication has been prepared by the Economic and Financial Analysis Division of ING Bank N.V. (“ING”) solely for information purposes without regard to any ...

Disclaimer: This publication has been prepared by the Economic and Financial Analysis Division of ING Bank N.V. (“ING”) solely for information purposes without regard to any particular user's investment objectives, financial situation, or means. ING forms part of ING Group (being for this purpose ING Group NV and its subsidiary and affiliated companies). The information in the publication is not an investment recommendation and it is not investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Reasonable care has been taken to ensure that this publication is not untrue or misleading when published, but ING does not represent that it is accurate or complete. ING does not accept any liability for any direct, indirect or consequential loss arising from any use of this publication. Unless otherwise stated, any views, forecasts, or estimates are solely those of the author(s), as of the date of the publication and are subject to change without notice.

The distribution of this publication may be restricted by law or regulation in different jurisdictions and persons into whose possession this publication comes should inform themselves about, and observe, such restrictions.

Copyright and database rights protection exists in this report and it may not be reproduced, distributed or published by any person for any purpose without the prior express consent of ING. All rights are reserved. ING Bank N.V. is authorised by the Dutch Central Bank and supervised by the European Central Bank (ECB), the Dutch Central Bank (DNB) and the Dutch Authority for the Financial Markets (AFM). ING Bank N.V. is incorporated in the Netherlands (Trade Register no. 33031431 Amsterdam). In the United Kingdom this information is approved and/or communicated by ING Bank N.V., London Branch. ING Bank N.V., London Branch is deemed authorised by the Prudential Regulation Authority and is subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. The nature and extent of consumer protections may differ from those for firms based in the UK. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website.. ING Bank N.V., London branch is registered in England (Registration number BR000341) at 8-10 Moorgate, London EC2 6DA. For US Investors: Any person wishing to discuss this report or effect transactions in any security discussed herein should contact ING Financial Markets LLC, which is a member of the NYSE, FINRA and SIPC and part of ING, and which has accepted responsibility for the distribution of this report in the United States under applicable requirements.

less

How did you like this article? Let us know so we can better customize your reading experience.