In today’s briefing:
- Fed’s Quantitative Tightening Plans: No Quick Return to Pre-Pandemic Balance Sheet
- The Week That Was in ASEAN@Smartkarma – Total Acess & True, Carro & Ninja Van Plus Indonesian Banks
- UK: Labour Levels Knocked Down
- More Interventionist Policies in Developed Economies – Positive for Asia?
- CX Daily: Ant Group Rebuilds for Regulators, but at What Cost?
Fed’s Quantitative Tightening Plans: No Quick Return to Pre-Pandemic Balance Sheet
- The Fed’s plans to shrink its balance sheet will accelerate this month. Investors should be wary of changes in US financial conditions as the Fed reduces its holdings of securities.
- The Fed estimates that a $2.5 trillion reduction in assets by 2024 Q3 will be equivalent to a 50 basis points increase in the federal funds rate.
- Quantitative tightening will be gradual and the Fed’s balance sheet will not return its pre-pandemic level, but the timing of its cessation depends on success in restoring price stability.
The Week That Was in ASEAN@Smartkarma – Total Acess & True, Carro & Ninja Van Plus Indonesian Banks
- The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across South East Asia.
- The past week saw insights on Total Access Communication and True Corp, as well as Carro and Ninja Van in the private digital space.
- There were also insights on Muangthai Capital (MTC TB) in Thailand and Sea Ltd (SE US) plus an interesting screen on the Indonesian banks.
UK: Labour Levels Knocked Down
- The UK unemployment rate was shockingly cut by 0.2pp to 3.6% in July amid resampling effects rather than genuine change.
- Participation of the over 50s has crashed further. Vacancies trend down while the stabilisation of wage settlements suggests that the labour market cycle will still move towards burning out soon.
- Inflation is consuming pay rises for most workers. The energy price guarantee will avoid some intensification and lessen second-round effects from firms trying to keep up.
More Interventionist Policies in Developed Economies – Positive for Asia?
- Governments in developed economies are more actively intervening to reshape their industrial structures, with significant and mostly positive implications for Asia ex-China.
- Competition in the semiconductor industry and production relocation hits China the hardest while the rest of Asia stands to benefit.
- Defence and commodities exports from Asia will see a boost from increased government military expenditure and green industrial policies in the advanced economies.
CX Daily: Ant Group Rebuilds for Regulators, but at What Cost?
Ant Group / In Depth: Ant Group rebuilds for regulators, but at what cost?
Foreign affairs / Xi to make first foreign trip since pandemic began
Holiday / Tougher Covid measures weigh on Mid-Autumn Festival spending
💡 Before it’s here, it’s on Smartkarma
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