MNI ASIA PAC Weekly Macro Wrap:

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Executive Summary:

JAPAN 

• BoJ Board Member Noguchi spoke about the need to get rate hike timing rate, as hiking too early or too late can cause problems (but didn’t give any hints around the Dec meeting). We hear from BoJ Governor Ueda this coming Monday. Tokyo CPI was close to expectations, although services CPI remained steady near 1.6%y/y. Jobs data was weaker than expected, but IP growth surprised on the upside. 

AUSTRALIA 

• Both the new headline and trimmed mean monthly CPI annual inflation measures saw an increase in October from September. Services also rose which is likely to worry the RBA.
• Q3 private capex volumes soared 6.4% q/q, the fastest since Q1 2012, and is setting up the 3 December GDP release for a solid increase at this stage. Inventory data is out 1 December and the net export and public demand contributions on 2 December.

NEW ZEALAND

• The MPC voted 5-1 to cut rates 25bp to 2.25%, as was widely expected. The discussion was between a hold or 25bp of easing with no consideration for another 50bp cut. The updated OCR path showed that if the economy develops as expected then the RBNZ is now on hold but it also signalled an easing bias.
• Q3 retail sales volumes grew at the fastest pace since Q4 2021 and businesses were the most positive since 2014 in the November ANZ business survey.

SHORT TERM RATES 

• Interest rate expectations across the $-bloc moved sharply over the past week, with New Zealand (+21bps) and Australia (+14bps) firming notably, while the US and Canada both softened by around 5bps.

CHINA 

• Only industrial profits were out this week, which fell y/y after a recent firmer run higher. Official PMIs for Nov print this Sunday. USD/CNH broke to fresh year to date lows, but steadied as the CNY fixing bias turned less supportive for the yuan. 

SOUTH KOREA 

• The BoK held rates steady as forecast, but onshore rates rose, as the accompanying statement from the central bank removed the explicit easing bias. USD/KRW volatility remains in focus as the authorities try to address FX supply/demand imbalances.  

ASIA 

• The RBI has left the door open for a Dec rate cut. Stronger Singapore inflation leaves the near term MAS bias on hold. 

ASIA EQUITY FLOWS 

• Inflow momentum was better as the week progressed, aided by rising Fed easing prospects. Taiwan led the turnaround. This only modestly curbed November monthly outflows though for most markets.