China’s economic numbers for the third quarter are the highlight of the week, as they are expected to indicate the region’s economic health.
On Monday, the world’s second-largest economy will release its 3Q GDP figures, along with data for September industrial production, retail sales, fixed asset investment and surveyed jobless rate.
Bloomberg’s consensus forecast is 5.5% year-on-year growth in 3Q, similar to pre-Covid-19 levels. China’s economy expanded 3.2% from April to June.
“A stronger rebound in China’s macroeconomic data in July and August as well as the firm trade data in September point to further growth acceleration in 3Q, with greater contributions from domestic demand,” UOB Global Economics & Markets Research said last Friday.
In 2Q, China’s manufacturing sector had recovered most of its momentum while services and retail started to show signs of a quickened pace of rebound.
Domestic tourism numbers for the just-ended Golden Week holiday (Oct 1 to 8) were encouraging, albeit still below par despite promotions/discounts.
Japan and Thailand will release trade figures for September on Monday and Thursday respectively. “We take a cue from firmer exports elsewhere in the region and look for the same in these two countries, although their export growth has yet to turn the corner into positive territory,” notes ING.
ING adds that Taiwan’s export orders — to be released on Tuesday — will be a key indicator of an electronics-led recovery coming into the final quarter of the year.
No monetary policy decision is due this week in Asia, but China will announce its October loan prime rate fixing on Tuesday. UOB Research expects the People’s Bank of China (PBOC) to continue holding rates going into 2021, as the pressure to further ease monetary policy has been greatly reduced by the speed of the economic recovery. Given the respite, PBOC can now pay attention to financial risk mitigation ahead, says UOB.
The Reserve Bank of Australia (RBA) will release its October policy meeting minutes on Tuesday. UOB says it will be interesting to see whether RBA is on the verge of another easing soon. “We now expect RBA to cut rates further by 15bps, to a record low of 0.1% by the next meeting.”
Other regional data includes Singapore’s September consumer price index (CPI) on Friday, which may see deflation improving to 0% y-o-y from -0.4% in August.
In the US, the 3Q earnings season remains in focus, with 88 Standard & Poor’s 500 companies reporting financial results.
The key economic data from developed economies will be the private sector October manufacturing and services PMI surveys on Friday. The US economic numbers will revolve around housing data for September.
Meanwhile, the US Treasury’s semi-annual “Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States” report to US lawmakers could be released soon.
The battle for the US presidential election on Nov 3 will be closely watched, as President Donald Trump is back on the campaign trail.
As new coronavirus infections continue unabated, the development of vaccines continues to come under the limelight, especially as Johnson & Johnson halted clinical trials of its Covid-19 vaccine last week after a participant fell ill. This is the second time that a front-runner developer has paused testing after AstraZeneca temporarily suspended its tests last month.
Thailand’s market will be closed on Friday to commemorate Chulalongkorn Memorial Day.
Back home, the Department of Statistics Malaysia is expected to release the September CPI on Wednesday. The CPI declined 1.4% y-o-y in August, led by the transport segment of the index. The economic indicators — leading, coincident and lagging indices — will be announced on Thursday.
At Bank Negara Malaysia, the release of international reserves data as at Oct 15 is scheduled for Oct 22. The country’s international reserves stood at US$105 billion (RM435.7 billion) as at Sept 30, up 0.19% from US$104.8 billion on Sept 15.
On the corporate front, Ancom Bhd, Ancom Logistics Bhd and Nylex (M) Bhd will hold their annual general meetings on Oct 21, and TAS Offshore Bhd and Komarkcorp Bhd the day after.
Aneka Jaringan Holdings Bhd will be listed on the ACE Market of Bursa Malaysia on Oct 20. The piling and foundation specialist aims to raise RM46.16 million from its initial public offering.
Its Malaysian public portion of 26.91 million shares saw an oversubscription rate of 12.68 times. PublicInvest Research has ascribed the stock a fair value of 35 sen a share, or two sen higher than the offer price of 33 sen.