Subscribers Only
Korea - August exports
Exports fell in August at the sharpest rate since early 2020. The data are following our leading indicator, which points to exports falling 10% YoY in the next 3M.
Paul Cavey
Public Post
Taiwan – August PMI
The PMI suggests there's a big industrial cycle slowdown in the works. That is important for Taiwan and the TWD. Because it suggests more downside risk for the regional export cycle, the weaker PMI also has implications for Korea and China.
Public Post
China - August PMI
The August official PMIs suggest no change in the economy. Growth remains weak, and doesn't look likely to turn up any time soon. Price indicators continue to suggest deflation is a bigger risk in China than inflation.
Subscribers Only
Japan – July labour market
While headline coincident indicators were unchanged in July, a jump in the new offers:applicants ratio suggests the sluggish post-pandemic recovery might finally be taking a new step up.
Public Post
Last week, next week
This is what happened on East Asia Econ this week. Region Updating with the latest inputs from July and our model shows the outlook for regional exports continues to worsen. That is particularly important for Taiwan and Korea, given the large share of exports in the economy. In China, the simple export weight isn't so big, but in terms of overall growth external demand has been playing an
Public Post
Japan – inflation update
Different measures of inflation announced in the last few days show short-term inflation pressure remaining strong. Leading indicators suggest a peak in the next 6M, but that could be wrong if JPY commodity prices take another leg up, or services price inflation in Japan starts to appear.
Subscribers Only
Korea - August BOK decision
The BOK remains hawkish, continuing to stress that containing inflation is its number one goal. It will probably be at least another couple of month before the growth picture starts to challenge this stance.
Public Post
Korea – business sentiment
The business sentiment survey shows activity remains reasonably firm, while inflation momentum is fading. At a minimum, the pace of BOK tightening should be slowing.
Subscribers Only
Korea – August consumer confidence
The recent sharp rise in inflation expectations stalled in August. That takes some pressure off the BOK, but for the central bank to relax, services inflation and growth need to slow more.
Public Post
China - taking stock
Today's rate cuts were focused on mortgages. That follows Q2, when home loan rates fell at the sharpest pace on record, and yet property remains weak. There likely needs to be more direct help for developers and consumers, and a more united policy showing from Beijing, to get the cycle going.
Public Post
Region – foreign trade
Foreign trade data releases from Japan, Taiwan, and Korea today aren't entirely consistent, but it does look like exports are no longer growing, with signs of a slowdown in demand from the US beginning to appear.
Public Post
Last week, next week
This is what happened on East Asia Econ this week. Region The continued fall in upstream inflation in China is important for the rest of the region: as an example, Chinese input prices tend to lead those in Korea. But the deflationary trend in China should also have implications for the rest of the world. The current weather-related supply disruptions in Sichuan and elsewhere at most are only likely
Subscribers Only
Japan – July CPI
Inflation rose again last month, and further rises are likely. The steep coincident increase in inflation expectations raises the risk that the rise in CPI could be sustained, but that would seem more likely if services prices were also increasing more quickly, and the labour market tightening.
Subscribers Only
China – PPI and liquidity preference
PPI inflation and saver liquidity preference are two indicators worth monitoring as leading indicators for China's cycle. Data releases in the last few days don't suggest either are turning up, though corporate liquidity preference last month at least didn't worsen further.
Public Post
Japan - recent data
Q2 GDP shows economic recovery remains slow and uneven, with downside risks in early Q3. Capex is rising, but really only in nominal terms. Exports are going sideways, though there might be some upside risk from autos. Relatively high inflation will likely peak soon. The monetary base is shrinking.
Public Post
China – taking stock
The cycle is weak, and yet the market was surprised the PBC cut rates yesterday. Central bank rhetoric had been suggesting rates had bottomed. But low inflation and signs of rising real rates make it more likely that rates fall rather than rise.
Subscribers Only
China - July activity data
The cycle remains weak, with the growing risk of a further step-down in the reminder of the year as exports slow. Following today's interest rate cut, further monetary easing remains likely.
Public Post
China - July credit data
Headline credit growth weakened in July, and even though M1 growth strengthened, the data don't suggest "stimulus" that can turn around the current trajectory of the economy.
Subscribers Only
Korea - July labour market
Today's labour market report isn't of much consequence for the BOK. The pace of the recovery since 2021 has started to fade, but the labour market still remains very tight.
Subscribers Only
China - July inflation
Today's July PPI and CPI data in China suggest again that deflation is a bigger risk than inflation.
Public Post
China – taking stock
China's cycle remains weak. Perhaps money data and excavator sales for July will reinforce the message of the construction PMI that stimulus is feeding through. Otherwise, the risk remains of a growth accident that, via a weaker CNY, gets transmitted to the rest of the world.
Subscribers Only
Taiwan – July foreign trade
Taiwan exports look to have peaked. Shipments haven't started to fall yet, but the stalling in upwards momentum should still continue to weigh on the TWD.
Subscribers Only
Japan - July Economy Watchers survey
The Economy Watchers survey fell again in July, suggesting no change in the slow pace of economic recovery out of the Covid-19 pandemic.
Public Post
China - July foreign trade
Exports remain resilient, but the leading indicators continue to point down, with imports of components slowing again in July. It is likely exports are contracting before the end of the year.
Public Post
Korea – July foreign trade
Korean July trade data were consistent with three themes for the regional export cycle: momentum is slowing; so far, it is a slowdown, not a recession; but leading indicators point to exports starting to contract before year-end.