adminBank Negara Malaysia meets on Thursday, with most economists surveyed by Bloomberg expecting borrowing costs to be kept on hold.
Analysts predicting a pause generally place greater weight on the stabilisation of inflation, while Bloomberg Economics says the central bank may cut the rate in the wake of a double-digit contraction in 2Q GDP.
Malaysia’s 10-year benchmark yield fell about 5 basis points last week.
Peru’s central bank is expected to hold its key interest rate at 0.25% on Thursday, according to economists surveyed by Bloomberg.
The nation last week recorded the highest number of coronavirus deaths per capita in the world.
Policy makers in Kazakhstan meet Tuesday, and Serbia’s gather on Thursday.
China’s recovery
China’s August trade data on Monday showed exports continuing to rebound from a year earlier. The 9.5% year-over-year above-consensus outcome and the below-consensus import number produced a $59b trade surplus.
The onshore yuan last week extended its longest stretch of weekly increases in two years.
The nation will release August CPI and PPI numbers on Wednesday. Consumer price inflation may have cooled to around 2.4%. year-on-year, while factory-gate deflation probably continued to ease at a rate of about 1.9%.
China’s 10-year bond yields are above their July peak after rising 2 basis points last week. The nation’s high yields have helped attract the most significant bond inflows in two years in August, helping support the yuan along with the outsize trade surpluses.
Money supply and loans growth numbers are due from Thursday onwards.
Deep recession
South Africa’s economy contracted an annualised 47% in the three months through June from the previous quarter, data due on Tuesday are forecast to show.
That would be the deepest quarterly decline since at least 1990, with the economy in recession even before the impact of the global pandemic.
“South Africa’s lockdown was one of the most draconian in the world, resulting in a huge economic cost,” Bloomberg Economics said in a report. “While the government unveiled a stimulus package to help cushion the economy, it was too little too late, weakening the recovery from a near standstill in April”.
Africa’s most-industrialised economy will also publish data on reserves, consumer confidence, the current-account balance, mining production and manufacturing output.
Derivatives traders are the most bearish on the South African rand in emerging markets, after the Turkish lira, Colombian peso, Russian ruble and Brazilian real, according to one-month risk reversals.
Argentine debut
Argentina’s new bonds, which are yielding about 11% on the gray market, will start officially trading this week after the nation emerged from its ninth default.
Bondholders will keep tabs on negotiations between Argentina and the International Monetary Fund, looking for indications about the government’s plans to revive the economy.
Other data and events
Taiwan’s exports rose to a record in August, aided by suppliers rushing to ship as many components as possible to Huawei Technologies Co. before a US ban on sales to the company comes into effect next week.
August inflation figures are due on Tuesday, with headline CPI expected to come in at -0.4% year-on-year.
The Taiwanese dollar continued to show a pattern of intra-day appreciation followed by a late slump, while intraday swings have been greater in recent weeks.
The Philippines’ July trade figures are due on Thursday.
Malaysia’s July industrial production due on Friday is expected to turn positive for the first time since February.
The ringgit remained among the best-performing currencies in Asia last week.
India is expected to report another double-digit contraction for its July industrial production due on Friday.
The rupee was one of Asia’s best performers last week as the central bank remained less active in the foreign-exchange market.
Mexico will present its 2021 budget on Tuesday. Barclays analysts, led by Marco Oviedo, expect a primary deficit of 0.6% of GDP.
Mexico’s peso advanced more than 1% last week.
While Mexico is likely to report faster inflation in August on Wednesday, stoking concern about resilient pressure on prices despite weak domestic demand and economic slack, it will probably be in line with the central bank’s forecast, according to Bloomberg Economics.
Investors will also watch industrial production levels for July on Friday for signs of how the pandemic is impacting manufacturing. The peso is the best-performing currency in emerging markets this quarter.
Traders will watch for Brazil’s official inflation index release on Wednesday after wholesale price indexes rose more than expected, increasing demand for inflation-linked bonds.
July retail sales figures, expected on Thursday, will also be key in gauging the nation’s economic rebound.
Lawmakers in Congress will start debating tax and administrative reforms.
Bongani Ndlovu