The trade surplus boosted the current account surplus to 4.5% of GDP in Q3. Given the trade surplus, the current account surplus is potentially even bigger than today's data show, with the goods surplus in the BOP remaining smaller than in the customs data, a gap that didn't exist before 2020.
The credit impulse ticked up in October as CGB issuance rose. But overall credit growth continues to slow. Despite a stabilisation in household MLT borrowing, it is consumer lending that remains the big drag. M1 growth was a touch stronger in October, but the direction also still looks to be lower.
Yesterday's Q3 monetary policy report from the PBC showed that, except for mortgages, interest rates banks actually charge their customers are continuing to drift lower. Corporate loan rates are now below 3%, down from 4.6% in late 2021.
My nowcast, based on weekly data covering food and energy prices, shows headline CPI accelerating up this month back towards 3% YoY.
Relative to history, it is the current strength of export prices that stands out. But import price inflation did accelerate in October, and further upside is likely into year-end. That in turn will keep upwards pressure on PPI, which is another reason to think CPI inflation will also rise further.
Both regular and total wage growth did slow in September. That was partly base effect, and partly the end of the summer bonus season. I doubt this signals a turning point. Bonuses at Chinese New Year should be quite a bit bigger, and rising overtime points to labour demand remaining strong.
As it is in Korea, the semi boom is generating a tax income bonanza for Taiwan's government. Tax revenue jumped in October, and over the last 12 months has risen by more than 20%. In 2026, basically none of this income windfall has been spent.
Reserve money shrank in October. At first glance, that looks like the tightening that the CBC has been claiming. However, one of the reasons was tax payments, which were unusually high last month. The impact will reverse if the government successfully loosens fiscal policy in 2027.
The recent slowdown in YoY money growth continued in October. Some of that is base effect, but growth in sequential terms has also moderated, and there are now tentative signs that the rise in money multipliers might have peaked. These are developments worth monitoring.
Any damage from recent market events won't be in macro data yet. What the data in Korea (and Taiwan) do show is that the cycle through early November had strong momentum. In the first 10 days of the month, Korean export growth accelerated, with chip exports now larger than all other exports combined
Employment was flat in October, but there was another big fall in female participation. That helped push the unemployment rate down to 2.6%. The labour market isn't nearly as tight as that suggests, but with business confidence strengthening, the slack in the labour market should now be easing.
Exports ticked down in October, but that wasn't unexpected after September was so strong; at 35% YoY, export momentum remains strong. Imports are also growing at a rapid clip, mainly because of tech prices, a trend seen most clearly in the semiconductor sector.
October was yet another strong month for TSMC, with revenue rising by almost 60% YoY. The correlation with Taiwan tech exports isn't one-to-one, because TSMC is producing these days in other countries, and the definitions of "semiconductor" also change over time.
Today the BOJ released its monthly proxy for private consumption in GDP. That suggests consumption was down in Q3. However, some of that is noise from the change in regulations that caused a spike in durables purchases in Q2.
Inconsistency in Japan's wage data is one of the factors I've highlighted as a headwind for BOJ tightening in the medium-term. Today's data for September don't clear the picture up, with the big gap between headline and constant sample measures of scheduled full-timer wage growth sustaining.
For services, the gap between the S&P/RatingDog versus the official PMIs is much smaller than for manufacturing. The implication is that the message of very sluggish services momentum indicated by both the official PMI at the weekend and yesterday's S&P survey is likely reliable.
The BOP data through September are a reminder of just how big the cycle has been. The current account surplus rose vertically again to reach almost 30% of GDP. The market seems to believe that the best of the chip upturn is now in the past.
China's onshore data through the end of October show upstream industrial prices remaining elevated, and like input prices in the PMI, point to PPI inflation last month being around 5%.
In JPY terms, the monetary base expanded in October for the first time since early 2025. That, though is almost certainly noise, with the downwards trend firmly in place as the BOJ buys less new JGBs, and allows its existing stock to roll over.
The PBC once again injected liquidity in October. That was mainly via repos. There was no new Pledged Supplementary Lending in the month, despite the announcement at the end of September of looser terms and lower rates for the PSL facility.
Taiwan's PMIs softened in October, but in both manufacturing and non-manufacturing remain at quite high levels. The details were more mixed. In the official manufacturing PMI, order backlogs came down, but new orders didn't change much.
Korean exports, finally, did dip in October. But that doesn't necessarily signal a peak. Semi exports are still rising. Chip sales are now almost as large as all other exports combined, whereas in 2024 they only accounted for 20% of total exports.
China's service trade data aren't particularly important in themselves – trade in goods is much bigger. But they are one of the final releases needed to paint the most comprehensive picture of quarterly growth.
The latest decline in China's equity prices shows no sign of bottoming out. With M1 growth slowing too, I'd interpret that as a renewed strengthening of deflationary pressure. My (simple) measure of all-economy prices has already declined since June, and is likely to fall further in October.
Taiwan's economy is supposed to be slowing down, but the government's monitoring indicator in September remained at a level that consistent with a continued boom. It is unusual for the monitoring indicator to be this strong without triggering CBC rate hikes.
