Paid Members Public Taiwan - August IP and retail sales Industrial output was stable in August, remaining below the peak of March, and leads suggest a further slowdown in the next few months. It is unlikely consumption will be robust enough to compensate for this industrial slowdown, even though retail sales ticked up in August. Paid Members Public Taiwan - not much tightening With the labour market not particularly hot, and the CBC forecasting inflation of less than 2% next year, it isn't surprising that tightening remains slow. That creates depreciation pressure on the TWD, but for the time being, that's not a trend the CBC will feel a need to fight very hard against. Paid Members Public Taiwan - China orders dropping sharply Taiwan's export orders to China continued to drop sharply in August. That is an indication of just how weak Chinese growth is, but is also a warning that a big change may be coming in overall world demand. Paid Members Public The East Asia Economist Since the pandemic began, productivity has probably increased more quickly in Taiwan than any other major economy. As a result, Taiwan isn't facing the higher inflation and rates being experienced elsewhere. Taiwan's competitiveness instead reinforces structural trends for a stronger TWD. Paid Members Public Taiwan - August foreign trade Taiwan's exports fell sharply MoM in August, matching the deterioration seen in the Korean export data that were released last week. Leading indicators continue to point to more downside ahead. Paid Members Public Taiwan – August CPI Inflation has likely peaked, and should decline in the coming months. The two risks round that are first, rising food prices, and second, cost inflation in services. There are reasons to think that services price might rise further from here, but for now, that seems like a tail risk. Paid Members Public 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. Paid Members Public 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. Paid Members Public Taiwan – July CPI Inflation in Taiwan looks quite well contained, particularly as the manufacturing sector looks to be rolling over. That said, given the disruption caused by the recent Covid-19 outbreak, there's probably more upside risk from services prices than there usually would be at this point in the cycle. Paid Members Public Taiwan – July PMI The sharp fall in the PMI highlights downside risks for the export cycle. That matters for Taiwan and the TWD, but also for the macro picture in Korea and China. Paid Members Public Taiwan – June export orders Incoming data remain mixed. However, the picture seems to be that exports have peaked, but remain somewhat resilient. Paid Members Public Taiwan - June CPI Headline inflation rose again in June to the highest since 2008. That was mainly food and goods prices. There are some signs of inflation broadening out, but for now, they remain tentative, and core is stable at around 2% YoY. Paid Members Public Taiwan - June foreign trade Exports held up again in June, but the outlook is changing as expectations for the semiconductor industry become more bearish. The recent equity sell-off suggests Taiwan's exports could be falling 10-20% YoY in the coming months. Paid Members Public Taiwan - June PMI Taiwan's manufacturing PMI has been surprisingly weak the last couple of months. There is a risk this is directly related to the China lockdowns which are now easing, but the internals of the survey are also soft, suggesting the underlying cycle is still weakening. Paid Members Public Taiwan – May export orders Orders data continue to suggest that Taiwan's headline export growth slows towards zero in the next 3-6 months. That probably represents a best case outcome for export data for the rest of the region. Paid Members Public Taiwan – May exports The USD level of exports remained elevated in May, but it is increasingly likely that shipments will be falling in the next 6M. Paid Members Public Taiwan – May CPI Inflation is high relative to history, but remains modest compared to much of the rest of the world, and there aren't yet signs of a sharp acceleration from here. Paid Members Public Taiwan – May PMI The PMI suggests Taiwan is experiencing a usual down cycle in manufacturing. The caveats to this conclusion are that the recent slowdown has been worsened by the covid disruption in China and continuing supply shortages. Paid Members Public Taiwan – April monitoring index Regional leads are deteriorating, and are certainly pointing to a slowdown ahead. But the message from the indicators is somewhat mixed, so for the moment the slowdown looks likely to be modest rather than particularly sharp. Paid Members Public 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. Paid Members Public 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. Paid Members Public 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. Paid Members Public Taiwan - Q1 GDP & March LI Q1 growth was strong. The official leading indicator for March is pointing to a clear slowdown, but more gradually than the path suggested by equities. Paid Members Public Taiwan - March exports Export growth remained strong in March. Leading indicators are pointing to somewhat weaker growth ahead. Paid Members Public Taiwan - April PMI The cycle has clearly peaked in Taiwan, but the gradient of the slowdown still isn't clear.