Central Bank Rate Decision, South Korea Trade, Australia Unemployment, New Zealand GDP

Emerging markets outside Asia to suffer from inflation in 2023, says JP Morgan

Excluding Asia, emerging markets are expected to face very strong inflation in the first quarter of 2023, said Jahangir Aziz, chief emerging markets economist at JP Morgan.

However, Asia will not see inflation as the region’s inflation has not reached what he called “strata zone levels” as it did in Central Europe or Latin America.

Aziz said the downward trend in the level of price inflation would be “strongly captured” in other emerging markets outside Asia.

“I think that’s going to be a big driver of how markets reprice emerging market assets,” he added.

– Charmaine Jacob

The Philippine central bank has raised interest rates by 50 basis points

Central Bank of the Philippines Raised Interest rates rose 50 basis points to 5.5%, raising the key rate to a 14-year high, in line with analysts’ forecasts in a Reuters poll.

The Bangko Sentral ng Pilipinas (PSP) will follow the US Federal Reserve in raising rates in early 2023, Bank of America Global Research’s ASEAN economist Mohamed Faiz Nakuta said on CNBC’s “Squawk Box Asia.”

He added that the central bank would continue to raise its benchmark interest rate by 6% or 50 basis points from the current rate.

– Charmaine Jacob

China must reopen to reduce US inflation: Siegel

Wharton School of Business professor Jeremy Siegel said on CNBC’s “Street Science Asia” that the reopening of China’s economy has been slow but necessary to contain inflationary pressures in the United States.

“For the U.S., we import a lot from China, and if those supply chains are normalized, that will bring down inflation, so I applaud China’s move,” he said. “It’s too late, it should have been earlier, but it’s needed,” he said.

Siegel said he expects the U.S. Federal Reserve to raise rates once again by 25 basis points at its February meeting.

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Jihye Lee

China’s November retail sales see significant slippage

China’s Industrial Production Grows 2.2% in November, after seeing a 5% growth in October, according to official data. That was lower than the 3.6% growth expected in a Reuters survey.

Retail sales fell 5.9% on an annual basis, compared with a 3.7% drop in a Reuters survey and a 0.5% drop in the previous month.

Jihye Lee

China’s reopening brings both risks and opportunities, says Asian Development Bank

Albert Park, chief economist at the Asian Development Bank, said China’s reopening would be upside-down and negative for its economy.

He said that while the lifting of Covid restrictions would increase growth prospects for China and other economies, it would also lead to an increase in Covid-19 cases.

“One area where there could be upside risk is the reopening of China. Of course, there are both downside and upside risks to the China case because we know that when they reopen, cases will spread very quickly,” Park said.

Persistent lockdowns in China are one of the three biggest headaches slowing the region’s recovery from the pandemic, according to ATP. Monetary policy tightening by central banks around the world and the protracted war in Ukraine are also contributing factors to slower growth, the bank said.

Read the full story Here.

– Charmaine Jacob

JP Morgan expects Asian markets to end the week on a cautious note after the central bank hike

JP Morgan expects markets in the Asia-Pacific region to end the week on a cautious note following the Federal Reserve’s interest rate hike of 50 basis points.

“Given the US market reaction after the FOMC meeting, we expect Asian markets to end the week on a more cautious tone,” Tai Hui, the firm’s Asia-Pacific chief market strategist, said in a note.

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Dai added that a weaker inflation axis is needed before the central bank’s hawkishness fades away, while the region may be more optimistic about China’s expected reopening.

“Medium-term prospects for China’s economic reopening and Asia’s domestic demand slowdown will be a bright spot, as the US and Europe face more growth challenges,” Dai said. “We will need more weak inflation data for the Fed to reduce its hawkishness.”

Jihye Lee

South Korea’s revised trade data shows a slightly narrower trade deficit

South Korea’s revised trade data for November was flat, Official data Shown from Bank of Korea.

Imports rose 2.7% while exports fell 14%, in line with the previous month’s readings, resulting in a trade deficit of $6.99 billion, slightly lower than the previous month’s reading of $7.01 billion.

Prices for imports grew 14.2% from a year ago, after seeing a 19.8% growth in the previous month. Export prices rose 8.6% in November from a year earlier, after growing 13.7% in October.

Jihye Lee

Japan’s trade data beat estimates, reporting a wider-than-expected trade deficit

Japan’s exports and imports for November grew more than expected on an annual basis. Official data showed.

Exports rose 20% for the month, beating expectations in a Reuters survey of 19.8%. Imports rose 30.3%, beating the 27% expected in a Reuters poll.

The result was a wider-than-expected trade deficit of 2.02 trillion yen ($14.91 billion) after posting 2.16 trillion yen ($15.96 billion) in the previous month.

Jihye Lee

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Australia’s unemployment rate is in line with expectations

Australia’s unemployment rate for November was 3.5% on an annual basis, in line with expectations in a Reuters poll and flat from the previous month.

Official data from the Australian Bureau of Statistics The labor force participation rate was 66.7% and the population rate was 64.4%.

The monthly working hours increased to 1.89 billion.

Jihye Lee

The central bank has announced a 50 basis point rate hike

The central bank announced a 50 basis point hike in interest rates, ending the streak of 75 basis point hikes seen in recent months.

Prior to the move, the central bank had raised rates by 75 basis points in the last four meetings. One basis point is equal to 0.01%.

A 50 basis point hike was widely expected ahead of the meeting.

This is the final policy decision expected from the central bank in 2022.

Alex Haring

Powell wants ‘substantial additional evidence’ that inflation is cooling

Federal Reserve Chairman Jerome Powell said on Wednesday that recent positive signs for inflation were not enough to ease the central bank’s rate hikes.

“Confidence that inflation continues to be on a downward path will require substantial additional evidence,” Powell said during his post-meeting news conference.

The Fed raised its benchmark rate by another half percentage point and indicated at least three more quarter-point hikes are coming. The result comes a day after the consumer price index rose 0.1% in November, a sign that inflation may have peaked.

However, inflation remains a problem, Powell said.

“Price pressures are evident across a wide range of goods and services,” Powell added.

– Jeff Cox

The U.S. economy has slowed significantly from its fast pace last year: Fed Chair Jerome Powell

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