Ahead Today
G3: Eurozone Industrial Production
Asia: China 1 year MLF
Market Highlights
US yields fell as US PPI moderated more than expected, with PPI excluding food and energy remaining unchanged (vs consensus for a 0.2% mom rise). On the back of the PPI print, estimate for the upcoming core PCE inflation, which is the measure the Fed targets, is likely to come in soft at around 0.2% given the CPI numbers which are already out. Meanwhile, China’s CPI continued to remain in negative territory at 0.3% year-on-year. We will have the 1-year MLF rate decision up today, together with key economic data such as GDP and industrial production. We together with the consensus expect a 10bps cut by the PBOC to help support economic growth.
Taiwan’s election result was announced over the weekend, with a status quo in cross-strait relations likely in the near-term. Lai Ching-Te from the DPP won Taiwan’s presidential elections with 41% of the vote. However, no party secured a majority in the Legislative Yuan, and as such, the DPP will likely need to work with opposition parties to push through economic reforms. The new President in his victory speech also committed to maintain peace and stability in the Taiwan Strait and seek for dialogues with China.
Regional FX
Asian FX were mixed against the Dollar, with VND (-0.5%) and KRW (-0.3%) underperforming. India’s inflation came in a touch softer than expected at 5.7%yoy, with volatile food prices pushing up the headline print. Core inflation trends in India were quite positive, coming in at 3.9%yoy. We continue to think that RBI has the space to cut rates from 3Q2024 as inflation moderates closer towards its inflation target.
