In today’s briefing:
- Peak Asian Inflation Is In Sight but Rates Will Continue Trending Higher
- India: Upside Growth Story Risks Unravelling
- Difficult Times Lie In Wait For Asia’s Exporters
- CX Daily: China’s Steel Industry at a Crossroads as Long Winter Looms
- The Commodity Report #67
- The Week That Was in ASEAN@Smartkarma – Ace Hardware SSSG Turns Up, United Tractors, and CPALL
Peak Asian Inflation Is In Sight but Rates Will Continue Trending Higher
- Recent inflationary woes have been the product of supply issues rather than excess demand. This is implied by output levels in many Southeast Asian economies being below pre-pandemic levels.
- A reprieve from rising prices should be on the horizon, with a global slowdown taking shape alongside an easing in supply chain bottlenecks.
- However, inflation could still see a resurgence, especially if governments start to cut back on fuel subsidies. As global interest rates rise further, expect monetary tightening in Asia to persist.
India: Upside Growth Story Risks Unravelling
- India’s growth story risks unravelling, following the disappointing 2Q22 GDP print.
- To be sure, we think some form of measurement error in manufacturing and industrial growth is clearly at work.
- The mooted capex upturn will be key to ensure India clocks growth in excess of 7%.
Difficult Times Lie In Wait For Asia’s Exporters
- Economic growth in Asia’s key markets is faltering, with the latest PMI data showing a slowdown in manufacturing activity in China as well as the G3 economies.
- A bevy of business and economic indicators also do not bode well for Asian exporters. Fixed investment and international capital goods orders are slumping, signalling weaker demand for Asian exports.
- With flagging external demand, domestic spending will be an important lifeline for Asia. ASEAN in particular continues to demonstrate resilience in manufacturing demand, despite a widespread drop-off in export orders.
CX Daily: China’s Steel Industry at a Crossroads as Long Winter Looms
Steel / Cover Story: China’s steel industry at a crossroads as long winter looms
Covid-19 / 33 cities in China are under some sort of lockdown
Hack / China accuses the U.S. of hacking a leading aerospace university
The Commodity Report #67
- Global food prices fell for the fifth month but remain at highly elevated levels.
- On a nominal basis, we’re basically now back to levels seen last time at the peak of the Arab Spring back in 2011.
- Meanwhile, we should keep in mind that we should keep an eye on the spread between farmers’ input costs for growing stuff and the selling prices based on the futures market.
The Week That Was in ASEAN@Smartkarma – Ace Hardware SSSG Turns Up, United Tractors, and CPALL
- 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 Ace Hardware Indonesia, United TractorsCP ALL, and Selamat Sempurna
- There were also insights on Thai macro, Link Net, Avanseus Holdings, Adaro Energy, and Singapore’s first green bond.
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