MNI ASIA PAC Weekly Macro Wrap:

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Executive Summary:

JAPAN 

• Japan Aug core machine orders were below forecast and lost y/y momentum, implying some downside capex momentum risks (which has been a resilient source of Japan's GDP growth).

AUSTRALIA 

• Labour market conditions eased in September. This makes a November rate cut more likely but given the RBA’s inflation concerns, Q3 CPI on 29 October remains the key input.
• The RBA minutes clearly reflected the Board’s caution at the 30 September decision to keep rates unchanged. Its “decisions”, ie. not just last month’s, “remain cautious and data dependent”. Thus the outcomes of releases between now and 4 November are very important.

NEW ZEALAND

• The RBNZ and economists expect Q3 CPI to print at 3% - the top of the 1-3% target band. Underlying CPIs are expected to remain within the top half of the band though. A 25bp rate cut is expected in November.
• The BNZ services and manufacturing PMIs for September were consistent with the RBNZ’s assessment in its October statement that “economic activity recovered modestly in the September quarter”. Retail card spending also fell in September.

SHORT TERM RATES 

• Interest rate expectations across the $-bloc have softened over the past week, led by Australia (-15bps) and the US (-9bps), with New Zealand (-3bps) and Canada (-2bps) lagging.

CHINA

• The CPI at -0.3% missed estimates of -0.2% as one of the longest streaks of price declines in decades continues. To add to the PPI decline, factory gate prices (PPI) YoY declined -2.3% YoY.
• The moderation of exports in August was short-lived as September's numbers jumped +8.3% YoY, beating expectations and much stronger than the month prior. According to BBG estimates, the decline in exports to the US was significant, down -27% YoY.

SOUTH KOREA 

•  The BoK is seen on hold next week amidst housing/financial stability concerns. 

ASIA 

• The MAS held policy steady in Singapore this week (as expected). Easing risks are still likely to re-emerge in 2026 though.  

ASIA EQUITY FLOWS 

• Inflows are recovering some ground into India, whilst Taiwan has seen outflows this past week despite mostly positive local equity trends.