Public Post QTC: Taiwan – semi still sluggish Taiwan's exports were a bit better in June. But they still aren't as strong as TSMC sales suggest they should be.
Public Post QTC: Japan – consumption a bit better The BOJ's consumption index has ticked up so far in Q2. That is welcome, but even now, the index is 2% below the pre-covid level. Consumption remains the weak spot in the economy.
Public Post QTC: Japan – JGB net purchases falling Latest data show that even before the BOJ makes its postponed decision about cutting gross new JGB purchases, on a net basis, the flow of new buying is already falling.
Public Post QTC: China: PPI to 0%, but no more Industrial prices in China have hardly changed since September 2023. So there isn't upstream price deflation...but equally, there are no signs of inflation either.
Public Post QTC: Japan – output gap turns negative The BOJ's latest estimate of the official output gap turning negative in Q1 is puzzling when the Tankan, also produced by the central bank, shows utilisation not just tight, but tightening further.
Public Post QTC: China – muddle through gets more difficult The June drop in the Caixin/S&P services PMI closes the gap with the already-weak official version. This might be noise, but there's a risk that the muddle through of the last few months is running out of road.
Public Post QTC: China – PPI still heading to zero Like high-frequency local data, global commodity prices indicate PPI deflation in China has largely been a cyclical phenomenon, and will end in the next couple of months.
Public Post QTC: China – does FCI explain the PMI The gap between the weak official and strong Caixin manufacturing PMI shown again in the June data is puzzling. But the Caixin version does make some sense given the loosening suggested by an FCI.
Public Post QTC: Taiwan – services even stronger than manufacturing We've been expecting a transition away from domestic services growth to externally led mfg. Instead, both exports and services are picking up. The non-mfg PMI has rarely been higher than it was in June.
Public Post QTC: Korea – semis and nothing else Semiconductor exports are growing strongly, but they only account for one-fifth of total exports. Without other products rising too, there's limited upside for exports overall.
Public Post QTC: China – net exports still boosting GDP This week's May service export data suggests the net export contribution might be a bit lower in Q2 than Q1. But it will still be positive, and so boost headline GDP growth in a way that didn't happen in 2023.
Public Post QTC: Korea – underperforming domestically too Export performance is the most obvious driver of Taiwan's outperformance relative to Korea since the pandemic, but the domestic story has been stronger too.
Public Post QTC: Taiwan – cycle momentum doesn't get better than this The official Monitoring Indicator that was updated today through May includes equity prices, but also real economy inputs like IP. It paints a picture of a pretty punchy recovery.
Public Post QTC: Japan – retail sales stronger Retail sales in May bucked the weakening of consumer confidence in recent months. That said, real retail sales remain lower than in September 2023. Consumption is still weak.
Public Post QTC: China – macro "lying flat" If you want to follow just one indicator in China, this is a good candidate. Li Yang has referred to it as "lying flat". If it doesn't change, it is very unlikely the trajectory of nominal growth will either.
Public Post QTC: China – a new step-up in export volumes After flat-lining for much of 2022 and 2023, China's exports have now risen anew. After rising 20% during the pandemic, volumes have now increased a further 5%. That lift isn't being seen elsewhere in Asia.
Public Post QTC: China – not an outlier in export prices With YoY export prices falling, China is exporting deflation. But most of the region has been too. The data continue to suggest export deflation from China is more cyclical than structural.
Public Post QTC: Korea – no change in consumer sentiment There's nothing in the June consumer confidence survey to shift the BOK. Confidence was neither strong nor weak. General price expectations ticked down, but picked up for property.
Public Post QTC: Taiwan – labour market still tightening Employment in May hitting a record high and unemployment edging down to a 23-year low aren't strong reasons to think the tightening cycle is over.
Public Post China – PPI firming further in June 10D prices show YoY PPI is on track to turn positive in June. That might, though, be it: MoM prices have ticked down so far this month, with the YoY rise all about the base effect.
Public Post QTC: China – liquidity preference down again Regulatory changes are causing big swings in deposit data, so caution is needed. But looking at M1 in relation to M2 should cancel some of the noise, so the fall in that ratio is concerning.
Public Post QTC: Japan – tight labour market, strong capex In today's Q2 BSI survey, overall sentiment didn't change much. But firms continued to report record levels of worker insufficiency, and capex intentions remained strong.
Public Post QTC: Korea – exports solid not spectacular The export data for the first 10 days tell the same story as other recent indicators: there is an export recovery, but it is modest, and doesn't look to be gaining further momentum.
Public Post QTC: Japan – inflation bites The fall in the EW survey isn't surprising given higher inflation. But it shows the BOJ's dilemma: keep policy loose as aggregate demand is weak, or normalise to try to lift the JPY and real incomes.
Public Post QTC: China – consumption share highest since 2005 Consumption isn't as weak as consumer confidence suggests: recently released full-year 2023 data show the consumption share surpassing – albeit only slightly – pre-covid levels.
