- The sentiment pendulum swings positive "The past week was marked by a positive reversal in market sentiment, as expectations on the global outlook firmed, with upward growth revisions by the IMF adding to optimism. Central bank rate hikes in the region also indicated policymakers’ confidence in their economic growth prospects."
- Strong growth outturns continue, despite weakening external demand… "The region again posted strong growth indicators, including for Australia (falling unemployment), and Malaysia (industrial production), although economic weakness in Japan persists (machinery orders). The inflation picture remains benign, with the Philippines releasing a lower-than-expected figure for June, and Taiwan posting a higher-than-expected, albeit still tame reading of 1.2% yoy. Over the last weekend, China posted a surprisingly exports outturn for June of 43.9% yoy, showing that external demand is not cooling as much as previously expected."
- …causing central banks to resume monetary tightening "Interest rate hikes in Korea and Malaysia showed that the region’s policymakers are growing more confident in their economies’ growth outlooks. Monetary stances nevertheless remain accommodative,
given risks to the global outlook."
- In the coming week… "China will release a batch of new data for June including inflation and industrial production, and Q2 GDP. Elsewhere in the region, Thailand, the Philippines and Japan will hold monetary policy meetings. We expect the Philippines, Japan, and Thailand to remain on hold, although the latter is signaling rate hikes in the near future."
BBVA Asia Weekly Watch 20100712
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