THB: USD/THB Maintaining Positive Bias, NEER 2% Off Sep Highs

President Trump is potentially about to declare a national housing emergency, why is this ? Below are some excerpts related to the overnight announcement: 

• US (MNI): Trump May Declare National Housing Emergency In Fall - Bessent. US Treasury Secretary Scott Bessent told the Washington Examiner that President Donald Trump may declare a 'national housing emergency' this fall to address rising house prices. The Washington Examiner notes that there hasn't been a national housing emergency declared since the 2008 recession.
• John Wake on X: "Homebuilder inventory hits 2009 levels". https://t.co/FIEJgJSKnx. See Graph Below.
• Bob Elliott on X: ”Low activity and falling prices suggests the housing market is cracking at this point.”
• EndGame Macro on X: “We’re now back to the highest level of completed but unsold homes since 2009. Historically, when completed inventory rises this sharply, it’s a sign that demand is failing to keep pace. Builders don’t like to sit on finished product because every unsold house ties up capital and financing costs. The last time we saw this dynamic in 2006–2009, the oversupply collided with weakening demand and set up a multi year price correction.”
• “Based on historical precedent, inventories at this level almost always mark the start of builders offering discounts, incentives, and eventually price cuts to clear supply. In 2009, unsold inventory peaked just before the steepest leg down in home values. Today isn’t identical, credit quality is stronger, but debt loads, economic strain, and demographic headwinds point to the same pressure.”
• “Going forward, the most likely scenario is a correction, not a rebound. Housing cycles take years to play out, and this chart suggests we’re entering the phase where supply begins to overwhelm demand.” See Graph below.
• Thomas Thornton on X: “Either prices are too high or rates are too high.  Lower rates artificially and will see higher home prices.  You want both lower at the same time, let a recession happen.”

Fig 1: Number of Unsold Completed Homes For Sale

Source: MNI - Market News/@JohnWake

August headline and core inflation printed below the mid-point of Bank Indonesia’s (BI) 1.5-3.5% band. UOB warns that price pressures could “accelerate due to continued increases in gold prices and demand, rising food prices, and higher demand for non-subsidized fuel amid supply constraints”. There is also an inflationary risk from US tariffs. It is forecasting Indonesian inflation to average 2.2% in 2025 picking up to 2.5% in 2026.

• UOB notes that “Indonesia’s inflation held steady at 2.31% y/y in August, supported by rising food prices—especially rice, eggs, and cooking oil. Volatile food inflation reached 4.47% y/y, outpacing core and administered components.”
• “Inflation declined -0.8% m/m, led by lower airfares and communication equipment prices. Energy deflation also contributed, following non-subsidized fuel price adjustments. The Personal Care & Other Services category surged 8.66% y/y due to rising gold prices.”
• “Transportation costs contributed to the monthly decline, particularly airfares, which were discounted during Indonesia’s Independence Day celebrations.”
• “On the energy front, deflation was observed due to adjustments in non-subsidized fuel prices.”

While Q2 recorded its ninth consecutive quarterly current account deficit, it narrowed from Q1 driven by the primary income deficit. Q2 printed at -$13.7bn after $14.1bn with primary income at -$16.8bn down from Q1’s -$18bn but the goods and services surplus was down $1.2bn at $3.1bn, the lowest in 7 years. Net exports contributed 0.1pp to Q2 growth, as expected.

Australia current account A$bn

• Given that the balance of payments data is nominal, the 4.5% q/q fall in merchandise export prices pressured the trade surplus. The goods surplus fell $1bn to $12.7bn in Q2 while services deficit rose $0.2bn to $9.6bn.
• The terms of trade fell 1.1% q/q & 2.4% y/y due to lower prices for exported coal and iron ore.
• Goods exports fell 0.9% q/q to be up 0.4% y/y driven by a 1.5% q/q decline in non-rural goods. Services exports rose 3.6% q/q & 7.9% y/y, the third consecutive quarterly increase, due to increased visits from New Zealanders.
• Merchandise imports fell 0.2% q/q in Q2 driven by a 1.2% q/q decline in capex and a 6.5% q/q in intermediate goods, as imported petroleum prices fell 11.5% in the quarter. Consumer goods imports rose 3.9% q/q & 3.8% y/y, possibly signalling some recovery in spending. Services imports increased 3.4% q/q to be up 7.8% y/y driven by overseas travel.

Australia terms of trade 

Source: MNI - Market News/ABS