October export growth was the strongest in 20 years. That doesn't tell us what happens next. If 2025 is any guide, even the slowdown suggested by equities might not happen. What the data do say is that AI tech demand remained extremely strong in October, leaving Taiwan with an enormous trade surplus

The surge in the Taiex of recent years means potential for big foreigner selling of TWD. But, inflows haven't been big, equities won't all be sold, and CBC has ability to fight back. The bear case is Taiwan recession versus US resilience, though even then, "fundamentals" for TWD would be strong.

CPI is being affected by cross-currents including very high upstream price inflation, government subsidies and holidays. The underlying picture is inflation of around 2%, which by Taiwan standards is high. I think an economic slowdown is needed to prevent it moving higher.

Taiwan's overall PMIs look fine. The details are shakier, but so far, it looks like the weakness is coming from softer demand for consumer tech as semi prices boost the cost of electronics devices. The data don't (yet) show obvious deterioration in the data centre component of the AI boom.

Rather than slowing as the government had forecast just a couple of months ago, GDP growth re-accelerated in Q3 to 14.4% YoY. That was because of domestic demand rather than net exports, and while that was mostly capex, consumption is growing more than 5%, and the positive output gap widened.

September money and credit data for September are like other indicators for Taiwan: quite strong, but not high enough on their own to think that they suddenly break the CBC's apparently strong desire not to change policy.

Like so much else in Taiwan, labour market dynamics will be determined by the fortunes of the AI cycle. If that turns down, it will be hugely important. A sharp downturn hasn't, however, been the CBC's expectation, but existing wage trends seem inconsistent with the bank's view that inflation slows.

Taiwan's price data still don't suggest the economy is overheating. But pipeline pressure is strong, computer prices are surging, indirect energy prices can't be easily controlled by policy, and underlying inflation still looks firm. That all stands out when real interest rates are still negative.

The CBC last week claimed that even with the policy rate staying at 2%, its monetary stance "remains on the tight side". I am not persuaded, but it is worth studying the bank's argument.