News Highlights - Week of 27 June - 1 July 2016

To read the full report, data and graphs go to http://asianbondsonline.adb.org/newsletters/abowdh20160704.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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Consumer price inflation in Indonesia rose to 3.5% year-on-year (y-o-y) in June from 3.3% y-o-y in May, buoyed by accelerating food price hikes. On a month-on-month (m-o-m) basis, Indonesia’s inflation rate climbed to 0.7% in June from 0.2% in May. In Japan, the Consumer Price Index (CPI) fell 0.4% y-o-y in May following a 0.3% y-o-y drop in April. Between April and May, Japan’s CPI inched up 0.1%. The Republic of Korea’s CPI climbed 0.8% y-o-y for the second month in a row in June. On a m-o-m basis, the CPI was unchanged. In Thailand, CPI inflation eased to 0.4% y-o-y in June from 0.5% y-o-y in May. Between April and May, Thailand’s CPI inched up 0.03%.

*     Viet Nam’s real gross domestic product (GDP) growth stood at 5.6% y-o-y in the second quarter of 2016 and 5.5% y-o-y in the first half of the year, buoyed by output growth in the industrial and construction sector and the services sector.

*     The People’s Republic of China’s (PRC) Purchasing Managers Index for manufacturing slipped to 50.0 in June from 50.1 in May. The PRC’s Purchasing Managers Index for nonmanufacturing climbed to 53.7 in June from 53.1 in May.

*     Industrial production in Japan contracted 2.3% m-o-m and 0.1% y-o-y in May. In the Republic of Korea, industrial production grew 2.5% m-o-m and 4.3% y-o-y in May. Manufacturing production growth in Thailand accelerated to 2.6% y-o-y in May from 0.9% y-o-y in April. In Viet Nam, industrial production growth decelerated to 7.4% y-o-y in June from 7.8% y-o-y in May.

*     Hong Kong, China’s merchandise exports and imports fell 0.1% y-o-y and 4.3% y-o-y, respectively, in May. The Republic of Korea’s merchandise exports and imports were down 2.7% y-o-y and 8.0% y-o-y, respectively, in June. Merchandise exports from Malaysia fell 0.9% y-o-y in May while imports of goods rose 3.1% y-o-y in the same month. Thailand’s merchandise exports and imports declined 3.7% y-o-y and 0.2% y-o-y, respectively, in May. Viet Nam’s merchandise exports climbed 5.9% y-o-y in the first 6 months of 2016 while imports of goods were down 0.5% y-o-y, according to the General Statistics Office.

*     The Republic of Korea’s current account surplus widened to USD10.4 billion in May from USD3.4 billion in April amid a m-o-m rise in the merchandise trade surplus, monthly declines in the deficit levels of the services account and secondary income account, and a shift in the primary income account from a deficit to a surplus position. Thailand’s current account surplus fell to USD2.2 billion in May from USD3.2 billion in April mainly due to the net services, primary income, and secondary income account shifting from a surplus to a deficit position, which more than offset the monthly increase in the merchandise trade surplus.

*     Local currency government bond yields fell for all tenors in Indonesia, the Republic of Korea, and Malaysia, and for most tenors in the Philippines, Singapore, and Thailand. Yields were mixed in the PRC and Hong Kong, China while yields rose for most tenors in Viet Nam. The spread between the 2- and 10-year yields narrowed for all emerging East Asian markets.

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