MNI ASIA PAC Weekly Macro Wrap:

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Executive Summary:

JAPAN 

• The Tokyo August CPI print was in line with expectations, but some services components rose in the month. Other data outcomes were mixed today, while a BoJ speech this week emphasized the importance of the upcoming Tankan survey to gauge economic momentum. 

AUSTRALIA 

• The RBA was clear that further rate cuts were consistent with underlying inflation returning to the 2.5% mid-point of the target band. It was the pace of future easing that “was not yet possible to judge” with the risks around the outlook “in both directions”.
• July trimmed mean CPI inflation jumped to 2.7% y/y from 2.1% and headline to 2.8% from 1.9%. There was a strong monthly rise in CPI ex volatile items & holiday travel at +0.6% m/m to be 3.1% y/y seasonally adjusted, highest in almost a year, after 2.5% y/y in June.

NEW ZEALAND

• NZ filled jobs rose for the second straight month in July, which is a tentative sign of some stabilisation in the labour market but the increases remain slight.
• The August ANZ business survey was consistent with a gradual but lacklustre recovery. The price components signalled that inflation should be stabilising and may not break above the top of the band.

CHINA 

• China industrial profits improved in July, but y/y momentum remained negative. Local stocks continued to rally, while USD/CNH broke lower. China sent trade negotiators to the US.

 SOUTH KOREA 

•  The Bank of Korea’s Monetary Policy Board opted to keep the benchmark interest rate steady at 2.50% for the second consecutive meeting. The Governor noted that the decision reflected concerns about rapidly rising mortgage debt. Fiscal stimulus is also expected to be larger next year.

ASIA 

• The BSP cut rates as expected, while trade data was slightly better than forecast. Thailand industrial production growth slowed noticeably. 

ASIA EQUITY FLOWS 

• Outflow pressures have mostly been evident in the past week. 

GLOBAL 

• Bloomberg container ship tracking data is showing some stabilisation in the number of vessels leaving for the US suggesting tariffs are yet to weigh on demand. While many details of trade deals still need working out, the signs of stabilisation in shipping suggest that exporters are less concerned.