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Korea – May 20-day exports
Export growth looks to have moderated in the first 20 days of May. The surprise was that there wasn't more of a material weakening.
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China – where we're at
The Covid-19 situation has improved, but not by enough to declare the all-clear. Policy has eased, but not by enough to ensure recovery when lockdowns do end. There's more debate about giving help to households, but further loosening still seems likely to focus on companies and investment.
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China – May LPR
The 5-year Loan Prime Rate was cut 15pb today. That was bigger than market expectations, but property equities rose only modestly. That is likely a reflection of how weak activity currently is, and thus how much work still needs to be done to turn things around.
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Taiwan – April export orders
It has been clear for a while that the Asian export cycle has peaked and is moderating. The sharp fall in Taiwan export orders in April is the first sign that the slowdown is not becoming much sharper.
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Japan – April CPI
CPI rose in April, with the BOJ's preferred measure rising above 2% YoY for the first time in Governor Kuroda's tenure at the BOJ. The leads now suggest a peaking, which if right, would likely be positive for domestic economic momentum.
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Japan – April exports
Headline YoY export data in April were reasonably firm. But exports fell quite sharply MoM. Downside risk for the regional export cycle is increasing.
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Japan – March machine orders
Japan's machine orders bounced in March, but not by enough to change the overall picture. That continues to look like a continuation of the sluggish recovery in domestic capex of recent months, and export growth slowing to zero.
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Japan - Q1 GDP
Q1 GDP data show no change in Japan's sluggish recovery out of Covid-19. The leads suggest GDP bounces in the next 3M, which is believable, given the potential for better domestic services activity. At the same time, the downside risks for exports appear to growing.
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China – April property prices
As was seen with other indicators for the property market in April, the tentative recovery in housing prices of the last few months also lost momentum last month.
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The East Asia Economist
Neither the drop in Korean CPI before 2019, nor the demographic and deflationary experience of Japan, tells us anything definitive about the outlook for price trends in Korea. In fact, it is likely that the country's fiscal position allows Seoul to respond to ageing in a way that isn't deflationary.
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China – where we're at
Economic activity came to a halt in April, and given the government's priorities, can't restart until lockdowns end. The PBC has offered more policy support, but given the hole the economy is in, not enough yet.
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China – April activity
Chinese GDP is almost certainly contracting once again. The quality of the data makes it difficult to say how deep the fall is, but by my rough estimate, RGDP declined by perhaps 2-3% YoY in April.
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China - April credit
The credit data were weak in April. That's certainly in part due to the covid lockdowns, but it doesn't feel like there is enough policy support yet to ensure recovery if and when the virus situation improves.
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Japan – April EW survey
The Economy Watchers survey was solid in April, which suggests a constructive outlook for the cycle, with perhaps a touch of upside risk compared with the other advanced economies.
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Korea - April labour market
There's nothing in the labour market data for April to make the BOK less hawkish.
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China - April inflation
Food price inflation rose in April, pushing up overall CPI. But core remains subdued, and PPI inflation fell back.
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China - weekly update
Probably, the all-out approach to beating covid is the government merely repeating the 2020 Wuhan play book rather than giving up on growth. But there are other explanations, and it isn't yet clear where growth will come from this year.
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Taiwan - April exports
Quite a few warning signs of a real slowdown are now appearing, but Taiwan's exports aren't showing much weakness yet.
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China - April foreign trade
Exports declined 6% MoM in April, the biggest fall in any normal month since April 2019. As they did then, the lockdowns probably explain some of the decline, and the leads, while clearly pointing down, don't point to the rate of decline in April being sustained. Still, this is an important data point. Across the region, there's growing indicators of a real export slowdown that will
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Japan - April Tokyo CPI
Overall CPI inflation in Tokyo rose to 2.5% YoY in April. The measure of all items less food, which is the official target for the BOJ, reached 1.9% YoY, which excluding the sales-tax boosted inflation of 2014, was the highest in several decades. A lot of this reflects rising energy prices, a trend which more recently has started to fade. But core CPI (inflation excluding food and energy
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China - April services PMI
For Li Keqiang and his mission impossible to get to 5.5% growth this year, the only silver lining in the very weak April Caixin PMI was that respondents were somewhat positive about the medium-term.
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Taiwan - April PMI
The robust growth momentum of the last couple of years hasn't completely disappeared, but the foundations are now definitely looking shakier.
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Korea - April CPI
The last BOK monetary policy meeting clearly showed that inflation was front and centre for the bank. Today's inflation data do nothing to change that prioritisation
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Japan - April consumer confidence
Consumer confidence managed to improve in April, but just a touch. The optimistic argument would be this is just the beginnings of a more sustained lift as recovery in the services industry from covid finally gets under way.
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Korea - April exports
The export cycle is showing clearer signs of at lest peaking, if not starting to roll over, with headline YoY export growth slowing again in April from 18.2% in March to 12.6%.