Malaysia maintained strong double-digit export growth in March of 24.1% y-o-y, with exports reaching MYR82.6 billion. Import receipts were valued at MYR77.2 billion, leading to a trade surplus of MYR5.4 billion in March. The Republic of Korea’s exports surged 24.2% y-o-y to USD51.0 billion in April. The growth was driven by positive annual increases in exports of nine out of thirteen major products categories. Imports rose 16.6% y-o-y to USD37.8 billion, leading to a trade surplus of USD13.3 billion in April. The Re

To read the full report, data and graphs go to http://asianbondsonline.adb.org/newsletters/abowdh20170508.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 1 - 5 May 2017

The United States Federal Reserve last week held its key policy rate steady in a target range of 0.75% to 1.0%. In its decision, the Federal Reserve judged the current range of its policy rate as sufficiently accommodative to support the labor market and a 2% inflation target. The Federal Reserve noted a slowdown in domestic economic growth in the first quarter of 2017 but this is expected to be temporary, with the labor market continuing to strengthen and underlying trends in consumption remaining steady.  

*     Real gross domestic product growth in Indonesia climbed to 5.0% year-on-year (y-o-y) in the first quarter of 2017 from 4.9% y-o-y in the fourth quarter of 2016. Domestic consumption, which was up 4.9% y-o-y, continued to drive Indonesia’s economy as the largest contributor to real gross domestic product.

*     Consumer price inflation in Indonesia climbed to 4.2% y-o-y in April from 3.6% y-o-y in March as all major subindexes posted y-o-y increases. In the Republic of Korea, inflation eased to 1.9% y-o-y in April from 2.2% y-o-y in March, driven by slower annual increases in seven out of twelve subindexes. In Thailand, inflation eased to 0.4% y-o-y in April from 0.8% y-o-y in March, led by the contraction in prices of food and non-alcoholic beverages. The Philippines posted an inflation rate of 3.4% y-o-y in April, unchanged from the previous month.

*     Malaysia maintained strong double-digit export growth in March of 24.1% y-o-y, with exports reaching MYR82.6 billion. Import receipts were valued at MYR77.2 billion, leading to a trade surplus of MYR5.4 billion in March. The Republic of Korea’s exports surged 24.2% y-o-y to USD51.0 billion in April. The growth was driven by positive annual increases in exports of nine out of thirteen major products categories. Imports rose 16.6% y-o-y to USD37.8 billion, leading to a trade surplus of USD13.3 billion in April. The Republic of Korea’s current account surplus narrowed to USD5.9 billion in March from USD8.4 billion in February.

*     The People’s Republic of China’s manufacturing Purchasing Managers Index fell to 51.2 in April from 51.8 in March, indicating continued expansion, albeit at a slower pace than in the previous month. Singapore’s PMI remained above the 50-point threshold for the eight consecutive month in April at 51.1. However, this was down slightly from 51.2 in March.

*     Malaysia’s international reserves increased to USD96.1 billion at the end of April from USD95.4 billion at the end of March. The reserves have grown since January after dropping to USD94.6 billion in December 2016 as Bank Negara Malaysia acted to stabilize the Malaysian ringgit.

*     Last week, State Development and Investment Corporation, located in the People’s Republic of China, issued two USD-denominated bonds. The 5-year USD500 million bond was issued at a coupon rate of 2.875% and the 10-year USD500 million bond was issued at a coupon rate of 3.625%.

*     Local currency government bond yields rose for all tenors in the PRC; and for most tenors in Indonesia, the Republic of Korea, Singapore, and Viet Nam. Yields fell for all tenors in Malaysia; and for most tenors in the Philippines. Meanwhile, yield movements were mixed in Hong Kong, China and Thailand. Yield spreads between the 2-year and 10-year tenors widened in all markets except in the PRC, Malaysia, the Philippines, and Viet Nam. 

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