Rubber statistics

       THE Statistics Department is expected to announce the monthly rubber statistics and external trade statistics this week.

       Natural rubber production increased by 36.7% in December 2021 (41,690 tonnes) as compared to November 2021 (30,493 tonnes).

       Exports of natural rubber amounted to 45,982 tonnes in December 2021, down 24.5% from 60,942 tonnes in November 2021.

       Gloves were the main exports of rubber-based products with a value of RM2.3bil in December 2021, a decrease of 6.5% as compared to RM2.5bil in November 2021.

       The balance of trade in Malaysia is expected to be RM39.76bil by the end of this quarter, according to Trading Economics global macro models and analysts’ expectations.

       BI, CBC meeting

       BANK Indonesia (BI) and the Taiwan Central Bank (CBC) will meet to decide on their policy rates this week.

       All the five economists polled in the Bloomberg survey expect the BI to keep the policy rate steady at 3.5%.

       UOB Global Economics & Market Research expects the same as well, and reiterated its view for BI to continue keeping its benchmark rate unchanged in the first half of 2022.

       Nevertheless, UOB is of the view that the rate hike cycle will begin soon, with its forecast for two 25-basis-point (bps) hikes in the third quarter (Q3) of 2022 to 4%, followed by another two 25bps hikes in Q4 of 2022 to 4.50%.

       Meanwhile, the two economists polled in the Bloomberg survey expect the CBC to keep the policy rate steady at 1.125%.

       UOB sees the possibility for CBC to hike by 12.5bps at this upcoming meeting.

       IHS Markit said the CBC is expected to commence hiking rates in the March meeting to reflect the United States monetary policy tightening and higher local import costs, though keeping the path of rate increases gradual amid external uncertainties.

       China’s data barrage

       A barrage of data from China is due this week including industrial production, retail sales, money supply, the jobless rate and new home prices.

       Bloomberg estimates its industrial production to expand 4% year-on-year (y-o-y) from 9.6% in the same period last year.

       It also expects retail sales to grow 3% y-o-y from 12.6% in the same period last year, with February M2 money supply growth at 9.6% y-o-y from 9.8% in January.

       Fed FOMC meeting

       THE US Federal Open Market Committee (FOMC) meeting will be held on March 15-16.

       The Fed is widely expected to kickstart its rate hike cycle in the March meeting, commencing with a 25bps increase, despite the uncertainties caused by the Ukraine invasion.

       According to a Bloomberg survey, 63 out of 67 economists expect the Fed to kickstart the rate hike cycle in the March FOMC with a 25bps hike to the Fed funds target rate or FFTR range of 25 to 50bps.