Focus on IPI numbers

       THIS week will see the release of Malaysia’s industrial production index (IPI), retail sales and unemployment rate for October 2021.

       The October IPI will be published on Dec 10. Analysts expect to see stronger IPI numbers at around 4.5% as activities have picked up.

       The IPI is expected to be 5% by the end of this quarter, according to Trading Economics global macro models and analysts’ expectations.

       Malaysia’s IPI increased 2.5% in September 2021 compared to the same month of the previous year.

       Meanwhile, Top Glove Corp Bhd will be releasing its first-quarter financial results for the period ended Nov 30 on Dec 10.

       Bank Negara will be announcing its international reserves as at Nov 30 tomorrow.

       The international reserves of Bank Negara amounted to US$116.5bil as at Nov 15. The reserves position is sufficient to finance 8.1 months of retained imports and is 1.2 times the total short-term external debt.

       China data dump

       CHINA’S November 2021 trade data, foreign reserves, consumer price index (CPI) and producer price index (PPI) will be due over the week.

       Bloomberg estimates China’s November exports will expand 18% year-on-year (y-o-y) from 27.1% y-o-y in October.

       It expects imports to grow 21.5% y-o-y from 20.6% in October while trade surplus to be at US$80.77bil from US$84.54bil in October

       According to a Bloomberg poll, CPI inflation may accelerate to 2.5% y-o-y in November from 1.5% in October, while the PPI may ease slightly to 12.1% y-o-y from 13.5% in October.

       ING said China’s trade data should show a y-o-y slowdown, although the growth rate will still be in the double digits.

       It said exports are expected to slow, given that most orders for western holiday demand have been fulfilled.

       Some last-minute urgent orders, however, may still be placed but these may show up in the December report.

       RBA, RBI meetings

       THE Reserve Bank of Australia (RBA) and the Reserve Bank of India (RBI) will decide on their monetary policies this week.

       UOB Global Economics & Markets Research expects the RBA’s current quantitative easing (QE) programme to continue until February 2022.

       RBI building

       The research house has also flagged the potential for rate hikes to come earlier than its initial projection of early 2024, although it still believes the current market pricing of RBA rate hikes is too aggressive.

       UOB now expects rate hikes beginning the fourth quarter of 2023 (Q4’23).

       UOB believes that the RBI will likely keep its policy rate at 4% for December. Owing to the better prognosis thus far, it pencils a 25-basis-point rate hike in Q4’22.

       RBA

       ING is not expecting either central bank to change policy at these meetings, and the Omicron variant provides some fresh cover for dovish central banks to hide behind.

       All 34 economists expect the cash rate to stay at 0.10% at the Dec 7 meeting, according to a Reuters poll.