Headline inflation
KEY highlights of this week’s economic calendar include readings on the consumer price index, external trade data, and both leading and coincident indices.
UOB Global Economics & Markets Research estimates exports in July to grow 8.5% year-on-year (y-o-y) while the trade surplus is at RM14.3bil.
UOB Research projects headline inflation to inch up to 2.1% in July, largely reflecting year-ago low base effects amid steady fuel pump prices during the month.
According to Trading Economics global macro models and analysts’ expectations, the inflation rate in Malaysia islikely to hit 1.5% by the end of this quarter.
Inflation is expected to be 2.1% while exports to expand 7.9% in July, according to the median by a Reuters poll of economists.
Meanwhile, Bank Negara is expected to announce its international reserves as at Aug 15 on Thursday.
Singapore CPI
INFLATION for July will likely show a slight increase from 2.4% y-o-y in June to 2.7% in July, interrupting its erratic trajectory lower, according to ING.
It said the core rate, currently 2.9% y-o-y, is probably of more interest to rate setters at the Monetary Authority of Singapore.
UOB Research estimates overall CPI to expand 2.5% y-o-y while Bloomberg expects a growth of 2.7% y-o-y from 2.4% in June.
LPR fixing
CHINA will announce its August one-year and five-year loan prime rate (LPR) fixings this week.
According to a Bloomberg poll, all 12 analysts surveyed expect the one-year LPR and the five-year LPR fixing to be unchanged at 3.35% and 3.85% respectively.
UOB Research, however, believes there is a likelihood of the LPRs being further adjusted lower following the off-schedule 20 basis points (bps) cut to the one-year medium-term lending facility rate on July 25.
Chinese banks cut the one-year and five-year LPRs by 10 bps to 3.35% and 3.85% respectively last month.
UOB Research still see room for an additional 15 bps rate cut for the rest of this year to bring the one-year LPR lower to 3.2% by the end of the fourth quarter of 2024.
Monetary policy meetings
BANK of Thailand (BoT), Bank Indonesia (BI) and Bank of Korea will announce their policy decisions this week.
According to a Bloomberg survey, all nine economists polled expect no change in the BoT’s policy rate, which is currently at 2.5%.
UOB Research also expects the BoT to keep its policy rate unchanged at 2.5% during this meeting.
Separately, a Bloomberg survey of 16 economists found that all but one expect the BI seven-day reverse repo rate to remain unchanged at 6.25%, except for one analyst predicting a 25-bps rate cut.
