MNI ASIA PAC Weekly Macro Wrap

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EXECUTIVE SUMMARY:

JAPAN

• When asked about the merits of a rate increase and the likelihood of a move this month, Ueda did not shy away from discussing specifics — including the probability of a hike — during the press conference. BOJ-dated OIS currently assigns an 80% probability to a 25bp hike in December, rising to 99% by March 2026.

AUSTRALIA

• Q3 GDP was lower than expected at 0.4% q/q & 2.1% y/y after an upwardly revised 0.7% q/q & 2.0% y/y. However, the details are a lot stronger than the headline with domestic demand rising 1.2% q/q to be up 2.6% y/y, the strongest since Covid-impacted Q1 2022. The softer GDP print was due to a 0.5pp inventory detraction.
• With Governor Bullock saying yesterday that the output gap has likely closed, this strength on the demand side is another reason for the RBA to be on hold beyond the 9 December decision given that inflation is above the top of the band.

NEW ZEALAND

• NZ’s terms of trade fell 2.1% q/q in Q3 driven by a 1.6% q/q drop in export prices as the dairy component was down 1.6% q/q. Import prices rose 0.5% q/q to be up 1.8% y/y.

CHINA

• The November RatingDog PMI Manufacturing declined to +49.9, missing estimates of +50.5. This breaks the run of four consecutive months of expansion.

SOUTH KOREA

• South Korea's November CPI was unchanged at +2.4% YoY , marginally above expectations of +2.3% YoY, whilst the MoM figure declined less than forecast at -0.2% YoY. Core CPI moderated from the prior month to 2.0% YoY. Market pricing continues to suggest that the BOK could be on hold for some time.
• For a second consecutive month, PMI manufacturing in Korea contracted and now has contracted nine out of the eleven months for the year.

ASIA

• S&P manufacturing PMIs across most of ASEAN were higher in November signalling stronger growth in activity across the sector. The aggregate ASEAN PMI rose to 53.0 from 52.7, the best performance since September 2022, with Thailand again posting the fastest growth followed by Vietnam.
• Indonesia’s headline inflation moderated 0.2pp to 2.7% y/y as volatile fresh food inflation eased 1.1pp to 5.5% y/y in November. Core held steady at 2.4% y/y, which was slightly more than consensus forecast. Bank Indonesia Governor said today there is room for further easing and that it just depends on timing.