In today’s briefing:
- Monthly Monitor: China Activity Data (May 2024)
- Revisiting the Japanese Market – Time to Increase Allocations?
- CHINA: Do You Like AI? BUY Utilities!
- CX Daily: Maternity Wards Are Latest Victim of China’s Falling Birthrate
- BoE Rolls Hints to August
- Indonesia Policy Rate 6.25% (consensus 6.2) in Jun-24
- Norway Policy Rate 4.5% (consensus 4.5%) in Jun-24
Monthly Monitor: China Activity Data (May 2024)
- Weak industrial output and urban fixed asset investment pose concerns to the health of the economy
- The beat in retail sales is likely due to holiday season in May and thus its significance should be discounted
- Going forward, we expect these three activity data to be weak unless the authorities launch more fiscal and monetary stimuli.
Revisiting the Japanese Market – Time to Increase Allocations?
- The main Japanese indices have been moving sideways this year
- Continued weakness in the JPY has diminished returns in USD terms
- Technically the market has similar weak underlying breadth as the US market
CHINA: Do You Like AI? BUY Utilities!
- AI is poised to drive a large increase in power consumption on the mainland. Data demand from generative AI necessitates more data centers and consequently more power.
- China energy consumption is at the beginning of a super cycle as AI becomes integral to everyday corporate and eventually personal lives.
- China’s clean energy names will benefit from the China’s energy strategy as its power needs from data centers surge.
CX Daily: Maternity Wards Are Latest Victim of China’s Falling Birthrate
- Maternity / In Depth: Maternity wards are latest victim of China’s falling birthrate
Flood / Fatal flooding leaves 13 dead in South China
Monetary policy / China’s monetary policy will stay ‘accommodative’ despite deflated data, PBOC chief says
BoE Rolls Hints to August
- The BoE unsurprisingly maintained the Bank rate at 5.25% with only two dovish dissents. However, the decision was “finely balanced” for probably at least four others.
- August is explicitly identified as an occasion to review the Bank rate in light of the forecast round. High services inflation is being downplayed in at least the interim.
- We see a lower hurdle to an August cut, reinforcing our call for that, although we still see it as a premature step that risks a reversal through rate hikes in 2025.
Indonesia Policy Rate 6.25% (consensus 6.2) in Jun-24
- Bank Indonesia kept the BI-Rate unchanged at 6.25%, aligning with market expectations to manage inflation and stabilize the Rupiah amid global uncertainties.
- Future interest rate decisions will be influenced by global financial market dynamics, particularly US monetary policy shifts, and the strong performance of the domestic economy driven by robust consumption and investment.
- Ensuring Rupiah stability and maintaining inflation within the 2.5 ± 1% target range remain central to Bank Indonesia’s strategy, supported by monetary, macroprudential, and payment system policies to foster sustainable economic growth.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
Norway Policy Rate 4.5% (consensus 4.5%) in Jun-24
- The Norges Bank kept the policy rate at 4.5%, aligning with expectations, to maintain a tight monetary stance amid high but slowing inflation.
- Despite low growth, economic activity exceeded projections in Q1, and employment remains high, supporting household consumption and overall economic stability.
- While inflation has slowed, it remains above target, necessitating the continuation of a tight monetary policy; adjustments will depend on inflation trends, economic growth, and global factors.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
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