Consumer price inflation in the People’s Republic of China (PRC) accelerated to 1.9% year-on-year (y-o-y) in September from 1.3% y-o-y in August. On a month-on-month (m-o-m) basis, consumer prices in the PRC rose 0.7% in September. The PRC’s Producer Price Index in

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News Highlights - Week of 10 - 14 October 2016

Consumer price inflation in the People’s Republic of China (PRC) accelerated to 1.9% year-on-year (y-o-y) in September from 1.3% y-o-y in August. On a month-on-month (m-o-m) basis, consumer prices in the PRC rose 0.7% in September. The PRC’s Producer Price Index inched up 0.1% y-o-y in September, the first month of a y-o-y increase following 54 consecutive months of decline. In Japan, the Producer Price Index fell 3.2% y-o-y in September after a 3.6% y-o-y drop in August.

*     The Bank of Korea’s Monetary Policy Board decided on 13 October to keep the Base Rate steady at 1.25%. The Monetary Authority of Singapore decided on 14 October to maintain its monetary policy stance, keeping unchanged the Singapore dollar nominal effective exchange rate policy band.

*     Singapore’s gross domestic product growth eased to 0.6% y-o-y in the third quarter of 2016 from 2.0% y-o-y in the second quarter of 2016. On a quarter-on-quarter and seasonally adjusted annualized basis, Singapore’s gross domestic product contracted 4.1% in the third quarter of 2016 following a 0.2% uptick in the previous quarter.

*     Japan’s current account surplus widened to JPY2.0 trillion in August from JPY1.9 trillion in July, mainly due to the rise in the primary income account surplus.

*     The PRC’s merchandise exports fell 5.6% y-o-y in September, a reversal from 5.9% y-o-y growth in August, while merchandise imports rose 2.2% y-o-y in September following 10.8% y-o-y growth in August. Indonesia’s goods exports fell 0.6% y-o-y in September following a 0.2% y-o-y increase in August, while merchandise imports dropped 2.3% y-o-y in September compared with a 0.1% y-o-y dip in August. Philippine merchandise exports decreased 4.4% y-o-y in August compared with a 13.0% y-o-y contraction in July, while merchandise imports rebounded on 12.2% y-o-y growth in August following a 1.7% y-o-y decline in July. Singapore’s non-oil domestic exports fell 4.8% y-o-y in September following flat growth in August.

*     Industrial production growth in Malaysia rose to 4.9% y-o-y in August from 4.1% y-o-y in July driven by higher annual output increase posted in the electricity and manufacturing sectors. In the Philippines, manufacturing production expanded in August as the Value of Production Index and the Volume of Production Index increased 8.4% y-o-y and 13.5% y-o-y, respectively.

*     In the Republic of Korea’s local currency bond market, foreign investors sold a net KRW663 billion worth of listed bonds in September following August’s net bond sales of KRW917 billion. The Philippines’ net foreign portfolio investment inflows climbed to USD687 million in the third quarter of 2016 from USD170 million in the previous quarter.

*     RAM Ratings in Malaysia announced last week that it upgraded the Association of Southeast Asian Nations-scale rating of the Philippines to seaA1(pi)/Stable from seaA2(pi)/Positive. 

*     Last week, local currency government bond yields fell for most tenors in the PRC, Indonesia, and Viet Nam, while yields rose for most tenors in Hong Kong, China; the Republic of Korea; Malaysia; the Philippines; Singapore; and Thailand. Yield spreads between the 2-year and 10-year tenors widened in the PRC; Hong Kong, China; the Republic of Korea; Malaysia; the Philippines; Singapore; Thailand; and Viet Nam; while spreads narrowed in Indonesia.

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