Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Macroeconomics

<ul>
<li>Real GDP grew 2.5% in CY23, helped by exports (+2.7%), PCE (+2.2%), government spending (+4.4%), and falling imports (-1.7%). Slower PCE and government-spending to reduce growth to ~1% in H1CY24. </li>
<li>Core PCE inflation (the Fed's target) eased to 2.93%YoY in Dec'23, the lowest in 33 months. More crucially, MoM annualized gains in core PCE averaged 1.85% in H2CY23. </li>
<li>13 months of M2 contraction, and deceleration in RGDP and core PCE, provide the perfect backdrop for a rate cut in Jun'24. Expect FOMC to hint at that this week. </li>
</ul>


Real GDP grew 2.5% in CY23, helped by exports (+2.7%), PCE (+2.2%), government spending (+4.4%), and falling imports (-1.7%). Slower PCE and government-spending to reduce growth to ~1% in H1CY24. 
Core PCE inflation (the Fed's target) eased to 2.93%YoY in Dec'23, the lowest in 33 months. More crucially, MoM annualized gains in core PCE averaged 1.85% in H2CY23. 
13 months of M2 contraction, and deceleration in RGDP and core PCE, provide the perfect backdrop for a rate cut in Jun'24. Expect FOMC to hint at that this week. 


US: On Track for a Rate Cut in Jun'24 as Core PCE Inflation Eases MoM and YoY

<ul>
<li>Policy volatility/uncertainty has generated negative surprises in inflation, especially with core PCE rising 0.3%MoM in Jan'25 and 0.4%MoM in Feb'25, causing the YoY increase of 2.8% in Feb'25.  </li>
<li>M2 growth was only 4.4%YoY in Feb'25, certainly not an inflationary factor.  The 'reciprocal tariffs' (an effective new tariff of 20% across the board) will add 0.4pp to near-term inflation. </li>
<li>10yr-2yr yield curve remains upward sloping (+0.29pp); tariffs are just 1/4th those of Smoot-Hawley, and unlike them will likely result in mutual tariff reductions. The selloff is a buying opportunity.</li>
</ul>


Policy volatility/uncertainty has generated negative surprises in inflation, especially with core PCE rising 0.3%MoM in Jan'25 and 0.4%MoM in Feb'25, causing the YoY increase of 2.8% in Feb'25.  
M2 growth was only 4.4%YoY in Feb'25, certainly not an inflationary factor.  The 'reciprocal tariffs' (an effective new tariff of 20% across the board) will add 0.4pp to near-term inflation. 
10yr-2yr yield curve remains upward sloping (+0.29pp); tariffs are just 1/4th those of Smoot-Hawley, and unlike them will likely result in mutual tariff reductions. The selloff is a buying opportunity.


US: Policy Volatility Generates Inflation Setbacks, but Recession Fears Overblown

Podcast Exploring Themes Driving Global Markets, Nomura - The Week Ahead

Nomura – The Week Ahead

Podcast Exploring Themes Driving Global Markets

Nomura - The Week Ahead

We explore the main themes that will drive global markets over the coming week, discussing the key market moving events and risks to keep on your radar.

Cross Asset Strategy

<ul><li>The Fed, Bank of England, and BOJ all left rates unchanged with their own unique perspectives</li><li>Market volatility continues with equities bouncing and the dollar rebounding</li><li>Fed Chair Powell emphasized keeping options open and uncertainty in the economy, with no immediate rate cuts expected</li></ul>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

The Fed, Bank of England, and BOJ all left rates unchanged with their own unique perspectivesMarket volatility continues with equities bouncing and the dollar reboundingFed Chair Powell emphasized keeping options open and uncertainty in the economy, with no immediate rate cuts expectedThis content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

The Week Ahead – In The Eye of The Storm

Podcast by J.P. Morgan analysts on global markets, At Any Rate

At Any Rate

Podcast by J.P. Morgan analysts on global markets

Analysts from J.P. Morgan’s Research team take a closer look at the stories behind some of the biggest trends, themes and developments in markets today.

<ul><li>Canada has been in the spotlight with developments related to tariffs and retaliatory measures, as well as the Bank of Canada cutting rates</li><li>The FOMC meeting this week comes at a time of rising downside growth risks and upside pressure on core inflation, with expectations for the Fed to hold rates steady</li><li>Swap spreads have widened in recent weeks due to deregulatory optimism, with expectations for them to narrow towards fair value, driven by supply in the treasury market and demand side factors.</li></ul>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Canada has been in the spotlight with developments related to tariffs and retaliatory measures, as well as the Bank of Canada cutting ratesThe FOMC meeting this week comes at a time of rising downside growth risks and upside pressure on core inflation, with expectations for the Fed to hold rates steadySwap spreads have widened in recent weeks due to deregulatory optimism, with expectations for them to narrow towards fair value, driven by supply in the treasury market and demand side factors.This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Podcast by Joe Weisenthal & Tracy Alloway, Odd Lots

Odd Lots

Podcast by Joe Weisenthal & Tracy Alloway

Bloomberg's Joe Weisenthal and Tracy Alloway explore the most interesting topics in finance, markets and economics. Join the conversation every Monday and Thursday.

<ul><li>Ray Dalio, founder of Bridgewater and author, discusses big numbers and debt cycles in a social and political context</li><li>Tracy and Joe host a podcast episode with Ray Dalio, known for his insights on finance and the invention of the chicken nugget</li></ul>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Ray Dalio, founder of Bridgewater and author, discusses big numbers and debt cycles in a social and political contextTracy and Joe host a podcast episode with Ray Dalio, known for his insights on finance and the invention of the chicken nuggetThis content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Ray Dalio on the Coming Crisis in US Debt

United States

IShares US Treasury Bond is an exchange-traded fund incorporated in the USA. The ETF seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the ICE U.S. Treasury Core Bond Index.

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iShares US Treasury Bond ETF (GOVT US)

US: On Track for a Rate Cut in Jun'24 as Core PCE Inflation Eases MoM and YoY

Real GDP grew 2.5% in CY23, but slower PCE and government spending will reduce growth to ~1% in H1CY24. Core PCE inflation eased to 2.93%YoY in...

Prasenjit K. Basu

US: Policy Volatility Generates Inflation Setbacks, but Recession Fears Overblown

Policy uncertainty caused inflation spikes, but M2 growth tame at 4.4%YoY. Reciprocal tariffs to increase inflation 0.4pp, but mutual tariff...

Prasenjit K. Basu

The Week Ahead – In The Eye of The Storm

Central banks maintained unchanged rates, with Fed revising growth forecast downward while raising inflation projections, Bank of England showing...

Nomura – The Week Ahead

US Rates: Loonie Tunes

Canada is facing economic challenges with tariffs, Bank of Canada rate cuts, while the FOMC meeting is expected to keep rates steady despite risks,...

At Any Rate

Ray Dalio on the Coming Crisis in US Debt

Ray Dalio, founder of Bridgewater and author, discusses big numbers and debt cycles in a social and political context Tracy and Joe host a podcast...

Odd Lots

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

US: On Track for a Rate Cut in Jun'24 as Core PCE Inflation Eases MoM and YoY

​Real GDP grew 2.5% in CY23, but slower PCE and government spending will reduce growth to ~1% in H1CY24. Core PCE inflation eased to 2.93%YoY in...

Prasenjit K. Basu

US: Policy Volatility Generates Inflation Setbacks, but Recession Fears Overblown

​Policy uncertainty caused inflation spikes, but M2 growth tame at 4.4%YoY. Reciprocal tariffs to increase inflation 0.4pp, but mutual tariff...

Prasenjit K. Basu

The Week Ahead – In The Eye of The Storm

Central banks maintained unchanged rates, with Fed revising growth forecast downward while raising inflation projections, Bank of England showing...

Nomura – The Week Ahead

US Rates: Loonie Tunes

Canada is facing economic challenges with tariffs, Bank of Canada rate cuts, while the FOMC meeting is expected to keep rates steady despite risks,...

At Any Rate

Ray Dalio on the Coming Crisis in US Debt

Ray Dalio, founder of Bridgewater and author, discusses big numbers and debt cycles in a social and political context Tracy and Joe host a podcast...

Odd Lots

Real GDP grew 2.5% in CY23, but slower PCE and government spending will reduce growth to ~1% in H1CY24. Core PCE inflation eased to 2.93%YoY in...

Policy uncertainty caused inflation spikes, but M2 growth tame at 4.4%YoY. Reciprocal tariffs to increase inflation 0.4pp, but mutual tariff...