MNI ASIA PAC Weekly Macro Wrap:

Download the Full Report here 

Executive Summary:

JAPAN 

• Expectations for a 25bp rate hike (from 0.50% to 0.75%) at the BOJ's December 18-19 meeting have strengthened over the past week. 

AUSTRALIA 

• In a unanimous decision, the RBA’s Board decided to leave rates at 3.6% where they have been since August, which was expected. Governor Bullock clarified that a rate cut was not considered. She said that 2026's discussions are likely to be around whether to leave rates at 3.6% or increase them, as the Board is uncomfortable with where inflation currently is.
• The November labour market data were consistently softer, apart from the stable unemployment rate. However, the data are volatile and averages need to be considered and they were mixed. Given the volatility, this release is likely to be consistent with the Board wanting more information.

NEW ZEALAND

• Card spending data for Nov showed a strong bounce versus Oct outcomes pointing to an improved Q4 consumer spending backdrop. Still, given seasonality the RBNZ may want to wait for early 2026 trends to see if firmer spending trends are being maintained. The PMI remained above the 50 expansion/contraction point. 

SHORT TERM RATES 

• Interest rate expectations across the $-bloc firmed over the past week out to June 2026, led by New Zealand (+18bps) and Canada (+12bps), while Australia firmed by 7bps and the US edged higher by 4bps.

CHINA 

• October CPI climbed back to positive at +0.2% after 2 consecutive months of deflation and was in line with forecasts of a further increase to +0.7% in November, representing the highest reading since February 2024 with core rising +1.2%.
• After the sudden contraction in October, November exports rebounded strongly topping expectations. November exports expanded +5.9%, above estimates of +4.0% and beating October's result of -1.1%. 

ASIA 

• Malaysian IP data reaffirmed a resilient domestic growth backdrop, which should keep BNM on hold. 

ASIA EQUITY FLOWS 

• Inflow momentum has been better for tech sensitive plays over the past week. Trends in SEA were mixed, while Indian markets await US-India trade news.